There certainly are a large number of growth shares for investors to choose from on the Australian share market.
Two which I think are among the best on offer right now are named below. Here's why I would invest $2,000 into these fantastic growth shares:
NEXTDC Ltd (ASX: NXT)
The first ASX growth share to consider buying is this innovative data centre-as-a-service provider. I've been very impressed with the way NEXTDC has been growing in recent times. For example, over the last four years the company's customer numbers have grown at a compound annual growth rate (CAGR) of 21%. This has been driven by the seismic shift to the cloud, which is driving very strong demand for data centre capacity.
Pleasingly, the company isn't just growing its customer numbers, its customers are using more and more of its services. Over the same period, its interconnections have grown at a CAGR of 31%. The catalyst for this has been increasing use of hybrid cloud and connectivity inside and outside its data centres due to customers expanding their ecosystems. The good news is that the shift to the cloud is still only getting started. I believe this leaves NEXTDC well-positioned to deliver strong earnings growth over the next decade.
Xero Limited (ASX: XRO)
Another fantastic ASX growth share to consider buying is Xero. Although this cloud accounting and business software company had a sizeable 2.38 million subscribers at the last count, I still believe this figure can rise materially in the future. This is due to the relatively modest market share that cloud-based providers have at present. Despite the overwhelming benefits of cloud-based accounting software, the company estimates that less than 20% of the global English-speaking target market has made the shift.
I expect more and more businesses to make the switch in the coming years, which should underpin solid subscriber growth. Combined with price increases, its high retention rate, and the benefits of scale, I expect this to lead to above-average earnings growth over the 2020s.
