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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As a seasoned expert in the field of finance and investing, I've closely monitored the dynamics of the stock market over the years. My expertise is grounded in a comprehensive understanding of various sectors, valuation methodologies, and market trends. I've successfully navigated through changing market conditions, demonstrating a keen ability to identify stocks with substantial growth potential.
The article you've presented discusses the shift in the market sentiment toward growth stocks and introduces a list of seven stocks expected to yield significant returns over the next decade. Let's delve into the concepts and information related to each stock mentioned:
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AAPL (Apple Inc.)
- Apple has shown exceptional growth, up 625% in the last decade, owing to its continuous evolution and innovation.
- Operating in high-demand sectors, including consumer discretionary and AI/virtual reality, positions Apple as a long-term player.
- Plans for Apple Glasses and diversification of the supply chain are indicative of Apple's strategic moves for sustained growth.
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PANW (Palo Alto Networks)
- Palo Alto Networks is a leader in the cybersecurity sector, benefiting from the increased demand for cybersecurity solutions.
- The company is well-positioned to capitalize on the projected cumulative global spending on cybersecurity products and services, reaching $1.75 trillion between 2021 and 2025.
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AMAT (Applied Materials)
- Applied Materials focuses on nanotechnology, a sector expected to play a vital role in various industries such as pharmaceuticals, aerospace, solar panels, and food.
- The global nanomaterials market is forecasted to more than double from $21 billion in 2021 to $23 billion in 2027.
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ISRG (Intuitive Surgical)
- Intuitive Surgical is included for its involvement in robotic surgery, with the daVinci Surgical System experiencing strong growth.
- Despite challenges like the impact of inflation, the company is expected to achieve double-digit growth in earnings in the next five years.
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WELL (Welltower)
- Welltower, a real estate investment trust (REIT), is positioned for growth in the senior living facilities sector.
- The expansion of senior living facilities is crucial in the next decade, with Welltower expected to achieve over 38% EPS growth in the next five years.
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CHPT (ChargePoint)
- ChargePoint is a leading provider of electric mobility charging solutions, benefiting from the increasing investment in the electric vehicle (EV) market.
- Sales of passenger EVs are expected to grow at a compound annual rate of 51% between 2020 and 2026.
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MARA (Marathon Digital Holdings)
- Marathon Digital Holdings, a Bitcoin miner, is mentioned for its role in the expansion of blockchain technology.
- The company's output increased by 29% during the crypto winter of 2022, and with the expected continued demand for bitcoin, MARA stock is considered promising for the next decade.
In conclusion, these stocks are selected based on their strategic positions in sectors anticipated to experience significant growth over the next 10 years, aligning with the evolving dynamics of the market.
