History Says the S&P 500 Could Rise: 2 Monster Stocks to Buy Now

The bull market still has legs, like that S&P 500 They recently hit new highs after a recent decline. The stock market could continue to rise for at least another three years if history is any guide.

Previous bull markets have lasted about five years, but over the past 40 years, the stock market has tended to rise for about a decade before the next bear market hits. Investors who put their money into top growth stocks could see significant returns. Here are two you can buy now.

1. Shopify

Shopify (BUSINESS -1.91%) is building a best-in-class enterprise operating system that is well positioned for growth in the global e-commerce market. Quarterly sales growth was consistently above 20% year-on-year last year, indicating a profitable investment opportunity.

Starting and growing a business is complicated, which is why more and more merchants are turning to Shopify. Adjusted revenue increased 25% year-over-year in the second quarter, driven by a 27% increase in subscription solutions. Shopify has successfully expanded its offerings from online commerce tools to point-of-sale, business-to-business and cross-border services.

As Shopify evolves into an all-round services platform for merchants, the company continues to gain share in global e-commerce. In the second quarter alone, gross payment volume increased 61% year-over-year to $41 billion. That’s an annual sales rate of over $160 billion, which is a lot, but that’s peanuts in a global e-commerce market that’s expected to reach $8 trillion by 2027, according to eMarketer.

Of course, the overall trading market is much larger. The total value of consumer payments – online and in-store combined – in the global economy is estimated at $20 trillion. In line with this enormous opportunity, Shopify’s point-of-sale platform is growing rapidly, with offline gross merchandise volume increasing 27% year-over-year in the second quarter. Management sees significant growth potential for its payment service through international expansion and offline business-to-business opportunities.

The stock is a good buy as it recovers from the recent decline. The company’s dynamism and future opportunities for international expansion should provide investors with above-average returns in the coming years.

2. Salesforce

Salesforce (CRM 0.32%) is another subscription-based company that helps companies process sales leads more efficiently and improve customer service. It offers a range of software applications for managing sales, marketing, messaging and more. According to International Data Corp. Salesforce is the leader in customer relationship management, but with only 22% market share, Salesforce still has great growth potential.

Salesforce offers a great opportunity with its data cloud, which brings together all of a company’s data on one platform. Demand for this product has been strong, with the number of paid data cloud customers more than doubling compared to the same quarter last year. It’s critical to bring customers to the cloud so Salesforce can capitalize on the growing demand for artificial intelligence (AI) services.

The upcoming launch of the new Agentforce AI platform could be game-changing. This tool can analyze data, automate customer service requests, and qualify sales leads. According to Salesforce, bookings for new AI products more than doubled compared to the previous quarter, with 1,500 AI contracts signed in the last quarter alone.

Salesforce is no longer growing revenue by double digits like it was a few years ago, but the stock offers significant upside potential as margins improve. Free cash flow grew an impressive 20% year over year in the second quarter, putting the company on track to double free cash flow within five years, providing a catalyst for the share price.

The stock trades at a price-to-sales ratio of 7, which is very reasonable compared to other software companies that fetch around 10 times sales. Investors should expect the stock to rise in line with free cash flow growth, meaning they can double their money by 2030.

John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Salesforce and Shopify. The Motley Fool has a disclosure policy.