There are many reasons why the buy-and-hold strategy works so well: It's simple, it's easy to understand, and it can deliver fantastic returns.
For example, if someone had invested $10,000 in Amazon stock 20 years ago, and simply let it grow, that investment would be worth about $986,000 now.
In other words, smart investments can truly set you up for life. With that in mind, let's have a look at two stocks that I believe are worth considering now.
Image source: Getty Images.
1. Spotify Technology
Firstup is audio streaming giant SpotifyTechnology(NYSE: SPOT).
To understand why Spotify is a buy now, let's take a trip back to late 2022.
Back then, Spotify stock was in the doldrums. Like many "stay-at-home" stocks, it had a terrible year in 2022. Spotify stock had fallen more than 80% from its all-time high.
Yet -- as I pointed out at the time-- there were promising signs. One of them was that CEO Daniel Ek was buying Spotify stock. Another was that Spotify's user growth wasn't collapsing -- it was accelerating.
On top of that, the company's stock was significantly undervalued based on its historical price-to-sales (P/S) ratio.
In any event, the last two years have seen Spotify's stock skyrocket. Shares have regained nearly all their losses from 2021/2022. All told, the stock has surged 384% and is once again within striking distance of setting a new all-time high.
The lesson? Sticking with fundamentals works.
Despite its poor stock performance following the pandemic's height, Spotify the company was still in good shape. Granted, changes needed to be made. In particular, management made the right decision to scale back unprofitable units and cut costs. Those decisions have paid off, as Spotify is once again profitable after a few years of posting losses.
2. Nvidia
The next unstoppable stock that could help set you up for life is Nvidia(NASDAQ: NVDA).
It may seem to some investors that Nvidia's rise is a story that has come and gone. After all, the company is already knocking on the door of becoming the world's most valuable company -- so how much upside could be left in the stock?
Well, plenty.
Don't believe me? Consider this example:
From 2007 to 2015, Apple stock surged by 811% thanks to innovations like the iPhone and iPad. Apple was the U.S.'s largest company, with a market cap of $725 billion. At that point, it might have seemed like the company's best days were behind it. However, since then, Apple stock is up a remarkable 739%. Its market cap is now more than $3.5 trillion.
I think that Nvidia can be like Apple. The company's management, led by CEO Jensen Huang, continues to trumpet that demand for its cutting-edge AI semiconductors remains through the roof.
The company's revenue has increased from $27 billion to nearly $100 billion in just two years. What's more, analysts expect revenue to almost double again to some $175 billion within another two years.
In short, business is booming, and there's no sign of letup anytime soon. That's a recipe that could lead to years of further stock price appreciation.
Granted, there are concerns that competitors are eager to steal some of Nvidia's market share, or that the overall appetite for AI hardware could fail to live up to the lofty expectations.
However, I remain unconvinced that either concern outweighs the bull case for Nvidia. Long-term investors should take note: Nvidia remains an unstoppable stock worth considering.
Don’t miss this second chance at a potentially lucrative opportunity
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
- Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $20,803!*
- Apple: if you invested $1,000 when we doubled down in 2008, you’d have $43,654!*
- Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $404,086!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.
*Stock Advisor returns as of October 21, 2024
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jake Lerch has positions in Amazon, Nvidia, and Spotify Technology. The Motley Fool has positions in and recommends Amazon, Apple, Nvidia, and Spotify Technology. The Motley Fool has a disclosure policy.
