Investors can achieve solid returns by focusing on long-term investing in growth stocks with strong fundamentals. These potential millionaire-maker stocks have demonstrated top-and-bottom-line growth, operate in promising industries, and have a track record of rewarding long-term investors in recent decades.
Before we delve into the specifics of these three growth stocks, it’s important to understand the principles underlying their selection. The aim is to identify companies that not only have proven financial performance but also possess a promising outlook for the future. These stocks aren’t necessarily the most hyped or glamorous, but they are the ones with solid fundamentals and robust growth trajectories.
Thus, for those with a 10-year-plus investing time horizon, these are three growth stocks worth considering. Let’s dive into why these three companies ought to be looked at as the growth cornerstones of any long-term portfolio right now.
Alphabet (NASDAQ:GOOG) has provided yet another solid performance this year, with its stock price surging more than 34% year-to-date. Unfortunately, compared to its peers, Alphabet has lagged behind. That said, with a dominant market share in search and a strong position in AI research, Alphabet is well-positioned for growth in various emerging trends.
Alphabet is rapidly advancing its AI innovations, addressing previous safety concerns and integrating AI features into Google Workspace and Search. YouTube’s dominance in video streaming, with over 80 million music and premium subscribers, has led to significant advertising revenues. Additionally, Google Cloud’s expansion is driving substantial revenue growth, positioning it for future success in the competitive cloud market. McKinsey estimates a $3 trillion EBITDA opportunity in the cloud by 2030, highlighting the growth potential for Alphabet.
Despite Microsoft’s (NASDAQ:MSFT) efforts to gain search market share by integrating OpenAI into its Bing search engine, Google’s dominance in the search market appears to have remained unchallenged. Google’s market share in search has not only held steady but may have even widened between 2022 and 2023. Microsoft’s attempt to beat Google at its own game has yielded limited results, with no significant changes observed in Google’s market position.
Tesla’s (NASDAQ:TSLA) valuation has soared to potentially excessive levels, with a price-earnings ratio of 82.3 times, significantly higher than the market average. Despite delivering a record number of electric vehicles (EVs) in Q2, the company’s delivery growth has slowed, and lead times for Tesla models remain low. This suggests that demand for Tesla vehicles may not be as strong as expected.
That said, Tesla, as a leader in the battery electric vehicle market, has demonstrated its ability to excel in making EVs and achieve impressive profit margins. Despite a recent decline in profitability and gross profit margin, Tesla’s profitability still surpasses that of traditional automakers. The company’s high valuation is justified by its strong market position and potential for continued sales growth and profitability improvement. With its early-mover advantage and bright prospects, Tesla is poised to capitalize on the future of the EV industry. With these factors considered, it earns its title as one of those millionaire-maker stocks.
Moreover, Tesla’s expertise in lithium-ion batteries and relentless commitment to innovation in autonomous driving and cost efficiency set it apart in the EV market and beyond.
Alibaba (NYSE:BABA) remains a top long-term tech stock despite geopolitical risks. It boasts impressive fundamentals, including significant growth, profitability, and resources for expansion. With a remarkable surge in adjusted EBITA and exceeding earnings expectations, Alibaba presents an attractive opportunity for investors. However, its reliance on the Chinese commerce market exposes it to potential challenges in the recovery process.
Additionally, BABA strategically focuses on LLMs and the development of Tongyi Qianwen to compete with established players in the AI space. With plans to introduce real-time translation and expanded capabilities, Alibaba aims to revolutionize workflows through its AI chatbot. Alibaba Cloud’s AI features to drive innovation across various sectors, enabling businesses to leverage AI for streamlined operations and data-driven decision-making.
The company’s emphasis on AI ethics and responsible implementation is expected to build trust and contribute to its long-term growth in the cloud market. This makes it one of those millionaire-maker stocks to consider.
On the date of publication, Chris MacDonald has a position in BABA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.