5 stocks you may never sell again
Technology can be a challenging sector for long-term investment due to the constant innovation that threatens market leaders. These stocks are the best at what they do now and still offer potentially solid investment returns in the coming decades as technology continues to evolve and these leaders may be the ones to profit from it.
1. Nvidia $NVDA+3.5%
Artificial intelligence stocks are all the rage these days, and none have gained more recognition than Nvidia. The semiconductor company has built a business on gaming graphics processing units (GPUs), but has taken market share across industries that require dedicated GPUs for high-performance computing needs. That includes AI applications, where analysts estimate Nvidia has an 80% to 95% market share.
Nvidia
NVDAThat's a big opportunity, considering the global AI industry could be worth trillions over time. While the stock has gained a staggering 200% since January, it still trades at a forward price-to-earnings ratio of 55, comparable to last summer, despite a much better earnings growth outlook. Investors who hold for years, not months, could see the company grow further over the next decade.
2. Apple $AAPL+6.0%
Everyone knows consumer electronics giant Apple as more than just an iPhone maker. The recent unveiling of the Vision Pro at the WWDC developer conference put the company on the list of those that will be vying to be a leader in the VR market. The augmented/virtual reality headset marks a brand new product category for the company, which has traditionally scaled many products (iPhone, Apple Watch, AirPods) that have become multi-billion dollar businesses over time.
Apple
AAPLBut for now, the iPhone still dominates Apple's business. The company generates nearly $100 billion a year in free cash flow that Apple can use for dividends and stock buybacks. The iPhone has replaced countless everyday tools and devices, and people spend hours on their phones every day. Until that changes, Apple investors and can sleep well at night.
3. Tesla $TSLA+0.6%
Tesla, which makes electric cars, has stood the automotive industry on its head and pioneered electric cars, establishing electric technology as the future of transportation. Although Tesla's value has grown to nearly $800 billion, the company's story is far from over. EVs still represent a low single-digit percentage of active vehicles worldwide. Even though competition has diluted Tesla's market share over the years, the company is still poised to maintain and gradually expand its share.
Tesla
TSLAThis goes beyond Tesla'scurrent products like the Model 3 and Model Y. Tesla has several "other" products such as Cybertruck, Tesla Semi and expanding autonomous driving, as well as new advanced technologies (software) such as AI and Tesla. Bot. With so many irons in the fire, just a few successes can take Tesla and its shareholders' portfolios to new heights.
4. Taiwan Semiconductor $TSM+3.9%
If semiconductor chips are the building blocks of technology, Taiwan Semiconductor is a pick-and-shovel investment for the tech sector. The company is a leading global semiconductor manufacturer, responsible for making chips for many of the world's largest semiconductor manufacturers, including Nvidia and Apple. Taiwan Semiconductor manufactures nearly 60% of the world's semiconductor chip supply.
TSMC
TSMWith such massive manufacturing capacity , the company can produce chips better and for less money than most of its competitors. Moreover, global demand for semiconductors is expected to grow steadily over the next decade. The global semiconductor market is worth approximately $600 billion. It could exceed $1 trillion by the end of the decade, which could mean years of growth for the world's leading chipmaker.
5. Broadcom $AVGO+3.2%
Connectivity in personal devices, data centers, and industry has grown tremendously over the past decade, pushing Broadcom's business to new heights. The semiconductor and enterprise software company specializes in networks, connected devices, and just about anything that sends or receives data. This set trend could continue to grow stronger in the future as autonomous vehicles, 5G and the Internet of Things potentially bring new market opportunities in the coming years.
Broadcom
AVGOBroadcom is aggressively investing in building enterprise software so that it doesn't have to rely solely on its chip business. The company is awaiting its $61 billion acquisition of cloud services business VMware, which will expand its existing suite of enterprise software products. Broadcom's products are on the right side of the long-term trend of moving information securely around the world, so the future looks bright for the stock as well.
All of these companies are currently at or just below all-time highs. Perhaps the only exception is $TSM+3.9%, but they're not down extra much either. If you already hold these stocks, you don't need to worry, but now is not the best time to buy them. We'll have to wait for better prices though Looking ahead these stocks may not be that expensive...
This is not financial advice. I'm providing publicly available data and sharing my views on how I would handle the situation myself. Investing is risky and everyone is responsible for their decisions.
