2 Growth Stocks to Buy Before It's Too Late

Stocks can be hard to understand for some investors because their prices tend to bounce around in the short term, but successful growth investing tends to be fairly simple when taking a long-term, big-picture view. Companies that consistently grow their annual revenues at high double-digit percentage rates will ultimately earn shareholders great returns. You just have to get on board and maintain a long-term perspective.

Here are two relatively small and fast-growing companies with some short-term price volatility that also have excellent prospects to do well over the long term.

1. Palantir Technologies

Palantir Technologies (NYSE: PLTR) is one of the most talked about artificial intelligence (AI) companies. It develops AI-based software applications that can be used for a wide range of use cases. Palantir helps companies identify problem areas in their supply chains and improve efficiency, and it's seeing a lot of growth in contracts with corporate clients right now. But the company is probably most known for its work with the U.S. government, where Palantir's software can help the military and intelligence agencies make more informed decisions in field operations and resource management.

Macroeconomic headwinds are leading to mixed results across several industries right now, but demand for Palantir's AI platform is gaining momentum. Its revenue grew 27% year over year in the second quarter, driven by surging demand from U.S. companies. The government still drives most of Palantir's revenue, but its U.S. commercial segment sales are growing faster, up 55% over the year-ago quarter.

Palantir is well-positioned to drive more growth as more enterprises look to integrate AI into their operations while keeping data secure. This is why Palantir's work with the government is crucial to its growth strategy. Its relationship with the military illustrates that protecting customer data is a top priority.

Palantir's "boot camps," which allow companies to test out its products before committing to a contract, have proved instrumental in its growth. Boot camps have led to shorter deal cycles and allow major customers to get on board in a matter of days after trying the product, which gives Palantir a competitive advantage .

Over the last four years, its U.S. commercial customer count has increased from 14 to 295. Palantir shares have rocketed 124% over the past year, and with the AI market expected to grow exponentially in the coming years, the stock could deliver monster gains.

2. Monday.com

Monday.com (NASDAQ: MNDY) offers a cloud-based software platform that helps companies streamline their workflows between teams and projects. Revenue has increased by 280% to $844 million over the last three years.

The work management software market is competitive, but Monday.com is still seeing robust demand for its services even after raising prices. Revenue grew 34% year over year in the second quarter, and management forecasts further gains ahead, as only 40% of its customers have migrated to the new pricing.

Monday.com's future looks bright, as it continues to see strong customer adoption after adding more services to the platform. In addition to work management, it has expanded its software offerings into product development, customer relationship management, and services. On the second-quarter earnings call, management noted that its largest customer had increased its seat count 10-fold over the last few years, which points to the value companies are getting out of Monday.com's Work OS platform.

New AI implementation on the platform should make it even more appealing to customers. Monday.com announced new generative AI features in Q2 that help automate certain actions. This could capture more interest from organizations that want to improve worker productivity -- a big opportunity for Monday.com, given that about two-thirds of organizations are regularly using generative AI, according to McKinsey.

The stock is up 60% over the last 12 months. Monday.com is seeing robust revenue growth in a market that was worth $101 billion last year, according to IDC. The stock could be at the start of a great run over the next several years.

John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Monday.com and Palantir Technologies. The Motley Fool has a disclosure policy .