Growth Stocks to Consider for Long-Term Investment

Investing for the long haul can be a great way to accumulate wealth. Growth stocks, in particular, capitalize on fast-growing companies, allowing investors to reap rewards as these firms expand. If you’re on the lookout for some promising growth stocks to enhance your portfolio, here’s a brief overview of three noteworthy options to keep in mind today.

1. Upstart Holdings

Upstart Holdings (UPST) uses artificial intelligence to refine the loan approval process. Their goal is to improve credit risk assessments and provide a more inclusive borrowing experience compared to traditional FICO scoring systems, which they argue might not always be fair.

However, Upstart’s lending model, while promising, is still relatively new. It hasn’t been rigorously tested through major economic downturns since it launched in 2020, and recent challenges have arisen as well.

In the current climate of rising interest rates throughout 2022 and 2023, demand for loans from consumers and startup lending partners has waned. This dip has resulted in decreased loan origination and revenue, prompting management to cut costs and streamline operations.

On a positive note, conditions have started to improve. Interest rates have stabilized, and investor confidence seems to be returning. Upstart has attracted significant interest from partners willing to finance billions in loans, including Fortress Investment Group and Blue Owl, with commitments up to $3.2 billion.

The company’s lending model continues to develop. Management recently highlighted their Model 18, which was introduced in the third quarter of last year, as a significant advancement in accuracy, leading to more approved loans, increased origination amounts, and stronger relationships with lenders. As their model evolves, investors might want to keep an eye on this startup.

2. SoFi Technologies

SoFi Technologies (SOFI) has undergone a remarkable transformation over the last decade. Originally focused on refinancing student loans, it’s now a comprehensive financial services platform, offering banking, investments, insurance, and loans to its clients.

One advantage that SoFi brings to the table is its banking-as-a-service model, which allows fintech firms to develop and operate digital financial products without needing a banking license. With investments in technologies like Galileo and Technisys, SoFi aims to be a “one-stop” financial services provider, processing millions of accounts and trillions in transactions annually.

From 2022 to 2025, SoFi’s deposit base grew dramatically, from $7.3 billion to over $27 billion in just a couple of years, which is quite impressive. This expansion allows SoFi to rely on deposits for funding loans, generally resulting in lower costs compared to other financing options. This shift is projected to save SoFi about $515 million annually.

In recent years, SoFi has made significant strides to diversify its revenue and establish itself as a major player in the financial services industry. The company seems to be maintaining a positive trajectory, with strong demand for personal loans.

3. Interactive Brokers

Interactive Brokers (NASDAQ: IBKR) is an electronic brokerage firm aimed at tech-savvy investors. They offer a diverse range of products on their platform, including stocks, options, futures, currencies, and even cryptocurrencies.

With a highly automated system, Interactive Brokers has positioned itself as one of the industry’s lowest-cost broker-dealers. This efficiency attracts more sophisticated, active investors looking for savings.

The company’s commitment to automation is reflected in its leadership, which largely consists of software engineers. This focus on technology allows them to provide exceptional execution speeds and low transaction costs.

Thanks to their automated processes, they’re boasting margins that outperform both traditional financial services and fintech competitors. In 2024, their adjusted pre-tax profit margin was a striking 72%. Given these advantages, Interactive Brokers presents itself as a valuable growth stock for potential investors.