The last three years have gone from being a market where valuation of growth stocks didn’t matter to a market where investors are hesitant to buy growth stocks with exceptional valuations.So, I want to clearly explain my methodology for finding the stocks for this list. I wanted to find one stock in a sector that is expected to be one of the most significant for investors in the next decade. The thinking is that when market conditions change, these stocks will stand to benefit the most over the next 10 years.
Not surprisingly, I looked at cybersecurity, artificial intelligence, and healthcare. But I also looked at some other intriguing areas like nanotechnology and the demand for electric vehicles. In the process, I found seven stocks that all look good choices to help make patient investors rich in the next 10 years.
Apple | $141.11 | |
Palo Alto | $149.34 | |
Applied Materials | $114.16 | |
Intuitive Surgical | $255.98 | |
Welltower | $74.28 | |
ChargePoint | $11.87 | |
Marathon Digital | $9.00 |
Apple (AAPL)
Source: Eric Broder Van Dyke / Shutterstock.com
Apple (NASDAQ:AAPL) is the first stock on this list of growth stocks that will make you rich in 10 years. And to be fair, it was probably on similar lists in 2012. The stock is up 625% in the last decade. That’s a credit to a company that keeps evolving and innovating.
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As a technology company, Apple operates in several high-demand sectors of the economy including the consumer discretionary space. The company is also making moves into the AI/virtual reality space. Plans for its Apple Glasses are delayed, but a VR/AR headsetlaunch is the first step in this vital stage of Apple’s long-term strategy.And investors are still likely to be buying the iPhones and Apple watches that will keep revenue and earnings strong. In fact, one of the catalysts for earnings growth is likely to come as the company begins to extend its supply chain away from China and into areas like India and the United States.
Palo Alto Networks (PANW)
Source: Shutterstock
The next sector to look for growth stocks that will make you rich in 10 years is cybersecurity. There are many names to choose from, but I’ll choose Palo Alto Networks (NASDAQ:PANW). As the unquestioned leader in the sector,Palo Alto is well-positioned to take advantage of the continued demand for cybersecurity.
Even before the Covid-19 pandemic, demand for cybersecurity solutions was on the rise. And the reality of the ongoing threat means that spending in this sector will remain strong in the next decade. In Dec., I cited a forecast from Cybersecurity Ventures that predicted “cumulative global spending on cybersecurity products and services will climb to $1.75 trillion between 2021 and 2025.”
Palo Alto was recently named the top global cybersecurity vendor. This distinction supports the company’s premium valuation. And analysts seem to agree. The consensus rating is a Moderate Buy, and the stock has a price target of $216.11 which is a 46% gain from the stock’s current level. Analysts also expect the company to grow earnings at a pace of over 19% in the next five years.
Applied Materials (AMAT)
Source: 3rdtimeluckystudio / Shutterstock
Applied Materials (NASDAQ:AMAT) makes this list of growth stocks that will make you rich in 10 years because of its focus on nanotechnology. This is a sector that is concerned with building materials on the scale of atoms and molecules.
By itself, that’s intriguing. Now you add into it the fact that nanotechnology is expected to play a key role in the growth of several key sectors such as pharmaceuticals, aerospace, solar panels, and even food. Grand View Research forecasts the global nanomaterials market will more than double from $21 billion in 2021 to $23 billion in 2027.
That growth may not be forecast by analysts who are projecting single-digit revenue and earnings per share (EPS) growth in the next five years. Applied Materials is a fundamentally strong company that has one of the highest profit margins in the sector and is correctly valued at the moment.
Intuitive Surgical (ISRG)
Source: Khakimullin Aleksandr / Shutterstock
Intuitive Surgical (NASDAQ:ISRG) makes this list because demand for robotic surgery is likely to increase in the next decade. That will be good news for the company’s daVinci Surgical System which is already showing strong growth. In the company’s most recent quarter it saw 12.9% year-over-year (YOY) growth in the daVinci system’s installed base.
The company’s revenue has grown sharply since being severely curtailed due to the Covid-19 pandemic. But the company is dealing with the effects of inflation, which has negatively influenced earnings and the company’s stock price, which is down over 4% in the last 12 months. That being said, analysts are expecting to see double-digit growth in earnings in the next five years. Growth like that is one reasonISRG stock easily makes the list of growth stocks that can make you rich in the next decade.
Welltower (WELL)
Source: Shutterstock
Real estate investment trusts (REITs) are not the first group of stocks that come to mind when you think of growth stocks to buy for the long haul. But the next 10 years are going to be critical in the expansion of senior living facilities that can also help the transition into long-term care.
With a market cap of over $35 billion, Welltower (NYSE:WELL) is among the largest healthcare REITs. EPS is expected to grow at an average pace of over 38% in the next five years. That makes the 10% growth in share price currently expected by analysts feel on the light side.Even if it doesn’t hit those lofty earnings projections, investors benefit from the business model of a REIT which requires it to return a substantial amount of the company’s profits to shareholders in the form of a dividend.
Currently that means an annual dividend of $2.44 per share with a dividend yield of 3.35%.
ChargePoint (CHPT)
Source: Freedom365day / Shutterstock.com
The only thing you need to know about the potential for the electric vehicle (EV) market is how much money governments are investing in this transition. But one key to mass adoption of EVs will be the elimination of range anxiety. That’s where ChargePoint (NYSE:CHPT) comes in.
ChargePoint is the world’s leading provider of electric mobility charging solutions (e.g., charging stations) and it also is the market leader in North America. Between 2020 and 2026, sales of passenger EVs are expected to have a compound annual growth rate of 51%. If you believe that ChargePoint’s growth can be proportional to that, CHPT stock looks compelling.
And the company recently entered into an agreement with Mercedes-Benz Group (OTCMKTS:MBGYY) and MNB Energy to significantly increase the number of EV fast chargers in the U.S. and Canada.
Investors have been souring on CHPT stock. And you should also be mindful of the fact that ChargePoint is not profitable and is not expected to be for several years despite dramatically increasing revenue. Still, if you’re trying to find growth stocks that will make you rich in 10 years, it’s okay to take some risks.
Marathon Digital Holdings (MARA)
Source: Shutterstock
Speaking of risks, let’s talk about the Bitcoin (BTC-USD) miner Marathon Digital Holdings (NASDAQ;MARA). Bitcoin had a dreadful year in 2022. In fact, the entire cryptocurrency industry has lost over $2 trillion in value. There are those that would argue that the sector has no intrinsic value to lose. That’s an argument for another article. But the argument forMarathon Digital Holdingsis about the continuing expansion of blockchain technology which will prop up demand for bitcoin.
MARA is one of the leading bitcoin miners, increasing its output by 29% in the crypto winter of 2022. The hash rate (which is a metric used to measure the market value of mining or computer power will only increase as the number of bitcoin to be mined dwindles. And with most analysts saying that it will take until approximately 2040 for the last of the current two million remaining bitcoin to be mined, MARA stock looks like a winner for the next decade.
On the date of publication, Chris Markoch had a LONG position in AAPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Chris Markoch is a freelance financial copywriter who has been covering the market for over five years. He has been writing for InvestorPlace since 2019.
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The post 7 Growth Stocks That Will Make You Rich in 10 Years appeared first on InvestorPlace.
As an enthusiast with a demonstrated understanding of the topics at hand, let me dive into the concepts covered in the article about growth stocks poised to make investors rich in the next 10 years. My expertise lies in financial markets, technology, and emerging trends, and I have a comprehensive grasp of the mentioned sectors.
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Apple Inc. (AAPL):
- Apple has shown exceptional performance over the past decade, with a remarkable 625% increase in stock value.
- The company's focus on innovation and evolution, especially in consumer discretionary and the AI/virtual reality space, positions it as a long-term player.
- Plans for Apple Glasses and a venture into the AI/virtual reality space contribute to its strategic positioning for future growth.
- Diversification of the supply chain into countries like India and the United States adds resilience and potential for increased revenue and earnings.
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Palo Alto Networks (PANW):
- Positioned as a leader in the cybersecurity sector, Palo Alto Networks is well-poised to benefit from the continued demand for cybersecurity solutions.
- The increasing need for cybersecurity, highlighted by forecasts predicting a cumulative global spending of $1.75 trillion between 2021 and 2025, bodes well for PANW.
- The company's premium valuation, coupled with its recognition as the top global cybersecurity vendor, strengthens its potential for growth.
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Applied Materials (AMAT):
- AMAT's focus on nanotechnology places it at the forefront of a sector expected to play a key role in various industries, including pharmaceuticals, aerospace, solar panels, and food.
- Despite single-digit revenue and earnings per share growth projections by some analysts, AMAT is considered fundamentally strong, with high profit margins.
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Intuitive Surgical (ISRG):
- ISRG is positioned to benefit from the increasing demand for robotic surgery in the next decade, particularly with its daVinci Surgical System.
- Strong growth in the daVinci system's installed base reflects the company's positive trajectory.
- While dealing with inflation effects, analysts anticipate double-digit growth in earnings for ISRG in the next five years.
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Welltower (WELL):
- Welltower, a real estate investment trust (REIT), stands out in the healthcare sector, particularly in senior living facilities.
- The expected expansion of senior living facilities aligns with the company's growth prospects, and its large market cap positions it as a significant player in the REIT space.
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ChargePoint (CHPT):
- ChargePoint's role as a leading provider of electric mobility charging solutions makes it crucial in the electric vehicle (EV) market.
- The potential for mass adoption of EVs is linked to addressing range anxiety, where ChargePoint plays a vital role.
- Partnerships, such as the one with Mercedes-Benz Group, indicate growth potential, although CHPT's current lack of profitability should be considered.
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Marathon Digital Holdings (MARA):
- As a Bitcoin miner, Marathon Digital Holdings is influenced by the expansion of blockchain technology and the ongoing demand for Bitcoin.
- Despite the cryptocurrency industry's challenges, MARA's increased output and position as a leading miner suggest potential for future growth.
- The long-term outlook, given the extended time frame for Bitcoin mining, makes MARA stock appealing for the next decade.
In conclusion, these growth stocks are selected based on thorough analysis and a forward-looking approach, considering the potential impact of market changes over the next 10 years. Investors should assess each stock's risk profile and align them with their long-term investment goals.
