Not all great growth stocks come with a sky-high price tag. In fact, some of the most promising companies in today’s market are trading for less than $50 per share, demonstrating that investors don’t have to break the bank to accumulate long-term wealth. The two stocks on this list have strong fundamentals, attractive valuations, and compelling growth prospects, making them ideal for a buy-and-hold strategy.
Let’s take a look at two standout picks that provide significant upside potential without a hefty price.
Valued at a market capitalization of $3.5 billion, Semtech (SMTC) is a chipmaker and connectivity innovator specializing in analog/mixed-signal semiconductors and IoT systems, particularly its LoRa technology.
Semtech reported strong first-quarter fiscal year 2026 results, signaling a turning point in the company’s post-pandemic transformation. However, SMTC stock is down 32% year-to-date, indicating that now may be a good time to buy shares on the dip.
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During the Q1 earnings call, CEO Hong Hou emphasized the company’s adaptability and resilience in the face of geopolitical uncertainties such as U.S.-China trade tensions and supply-chain volatility. Total revenue for the quarter increased 22% year on year to $251.1 million. Adjusted earnings per share increased to $0.38 as well, up from $0.06 in the prior year quarter. Semtech’s infrastructure business outperformed expectations with record revenue of $51.6 million, up 143% year on year. This growth was driven by rising demand for artificial intelligence (AI) workloads and next-generation compute clusters. Notably, CopperEdge, a disruptive active copper cable (ACC) technology designed for AI data centers, contributed to this expansion.
Management stated that CopperEdge’s production ramp is expected to begin in the latter half of fiscal 2026, positioning it as a significant revenue contributor by year-end. In the firm’s Industrial segment, IoT hardware and LoRa drove revenue growth of 24%. LoRa-enabled revenue reached $38.9 million (up 81% year on year), reflecting strong demand from new verticals such as healthcare, wearables, and robotics.
The company generated $26.2 million in free cash flow, allowing it to pay down debt by $10 million in the first quarter and an additional $15 million in the second quarter to date. Semtech is developing a multi-pronged growth engine with a strengthened infrastructure pipeline, IoT platforms designed for scale, and an increasing presence in AI-enabling technologies. Analysts predict that Semtech’s earnings will rise by 88.6% in fiscal 2026, followed by an additional 29.5% the following fiscal year. Semtech, trading at 24x forward earnings, is a reasonable AI-led growth stock to buy right now.
On Wall Street, Semtech stock remains a “Strong Buy.” Out of the 14 analysts who cover SMTC stock, 10 rate it a “Strong Buy,” one calls it a “Moderate Buy,” and three suggest a “Hold” rating. Based on the mean price target of $56.33, Semtech stock has upside potential of 34% from current levels. Plus, the high target price of $68 suggests that shares could rally as much as 62% over the next 12 months.
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The second stock on this list is Toast (TOST), a cloud-focused tech company that offers an end-to-end platform combining software, hardware, and financial services to help restaurants run more efficiently. Toast stock, valued at $21.1 billion, is up 16.8% year to date, outperforming the 1.9% gain in the broader market. However, the stock is trading 6.5% below its 52-week high, making it an excellent time to buy on a dip.
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Currently, Toast has 140,000 locations on the platform (up 25% year on year), with an additional 6,000 added in the first quarter of 2025. Annual recurring revenue increased 31% YOY to $1.7 billion. Recurring revenue and rapid customer acquisition lay a solid foundation for long-term growth. Toast is transitioning from investment-driven growth to consistent profitability, which is an ideal scenario for long-term investors. In Q1, GAAP net income stood at $56 million versus a GAAP net loss of $83 million in the year-ago quarter.
Adjusted EBITDA climbed from $57 million in the prior-year quarter to $133 million. Free cash flow improved dramatically as well, from -$33 million to $69 million. The company ended the quarter with a healthy balance sheet, sporting no debt and a cash balance of $1 million.
Analysts predict that revenue will grow by 20% to 21% per year over the next two years. Earnings could increase by 70% in 2025, then by 31% the following year. TOST stock appears to be overpriced at 46x forward earnings, but this reflects investors’ confidence in the company’s future growth prospects.
Toast integrates seamlessly with restaurant operations, including point-of-sale (POS) and kitchen management, payroll, inventory, loyalty, and analytics. In the POS systems market alone, the company has a 24.4% market share. Priced under $50 per share and combining accelerating recurring revenue, profitability, solid fundamentals, and a long-term business moat, TOST stock is a strong candidate for a buy-and-hold investment strategy.
Overall, Wall Street rates Toast stock as a “Moderate Buy.” Out of the 29 analysts who cover the stock, 13 have given it a “Strong Buy” rating while one analysts says it is a “Moderate Buy” and 15 suggest a “Hold” rating. Based on the mean target price of $44.04, Toast stock has upside potential of 3.6% from current levels. However, the high target price of $52 suggests that the stock could rise more than 22% over the next 12 months.
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On the date of publication, Sushree Mohanty did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
