Turning $1,000 into $4,000 in a decade by investing in stocks (or anything else) is no small feat. It requires a compound annual growth rate (CAGR) of almost 15%. For reference, the S&P 500's CAGR in the past decade is 13.1%, and that's very high by historical standards. So, this task demands that an investor beat the market by some margin.
Though equities that can pull that off aren't easy to find, they exist. Let's consider two stocks that might have what it takes: Intuitive Surgical(NASDAQ: ISRG) and Veeva Systems(NYSE: VEEV).
1. Intuitive Surgical
Intuitive Surgical is the world's leading robotic-assisted surgery (RAS) company, thanks to its da Vinci system. The company's crown jewel allows physicians to perform various procedures, from bariatric surgeries to prostate cancer surgeries. Intuitive Surgical's minimally invasive procedures lead to less cutting of the skin, less bleeding, less scarring, faster recovery times, and shorter hospital stays.
Increased adoption of the company's innovative technology has been a significant tailwind. The company's revenue, earnings, and stock price have been on a tear in the past decade.
ISRG Revenue (Quarterly) data by YCharts
Of course, that doesn't guarantee things will continue the same way, but there are excellent reasons to be optimistic. First, Intuitive Surgical doesn't have a whole lot of competition in the RAS market. It held an 80% share in 2020, and it's unlikely to have changed substantially since.
Will there be more competition in the years to come? Yes. Medtronic is testing a competing RAS system. However, as Medtronic pointed out, only about 5% of surgeries that could be performed robotically currently are, and that's despite the advantages they confer. In other words, there is massive room for growth. Even increased competition will do little to hinder Intuitive Surgical's prospects.
Some investors may note the rise of weight loss medicines like Wegovy and Zepbound, which has already led to a decline in bariatric surgeries. But there are more than enough opportunities elsewhere for Intuitive Surgical to make up the difference. That's especially true since bariatric surgeries represented between 4% and 5% of the company's procedures. This issue won't substantially affect the company's prospects.
Lastly, as Intuitive Surgical's installed base increases, so will the number of procedures it performs and the number of instruments and accessories it sells, a business that carries higher margins than the sale of da Vinci systems. So, expect Intuitive Surgical's financial results to remain highly competitive in the next decade. The company has what it takes to deliver a CAGR of 15% in this period.
2. Veeva Systems
Though the vast cloud computing market features many large corporations, Veeva Systems is one of the leaders in its relatively small corner of this field.
The company offers solutions tailor-made to cater to the needs of life sciences companies. These needs include a grueling regulatory landscape, a large amount of data to handle and to make accessible to many different individuals and teams, and a long time horizon between initial investment in and the launch of a product.
Many life sciences companies, including pharmaceutical companies, would rather opt for Veeva's platform since it explicitly targets their demands. That's why Veeva Systems has many clients among the largest drugmakers in the world. It has also delivered excellent results over the years.
VEEV Revenue (Quarterly) data by YCharts
Can Veeva Systems maintain this momentum? Though the company's business slowed over the past few years (along with much of the cloud industry), Veeva Systems has a long runway for growth. The company estimates a total addressable market (TAM) of more than $13 billion. Veeva's revenue over the trailing-12-month period is about $2.5 billion, less than 20% of its TAM. Further, the cloud specialist benefits from a solid competitive advantage, namely switching costs.
Life science companies that rely on Veeva's cloud solutions for critical day-to-day activities won't want to jump ship without an excellent reason. Veeva Systems' brand name, which has become associated with life science-specific cloud solutions, is also a strength that should allow it to perform well, even with increased competition. The company is branching into other highly regulated industries, including consumer packaged goods, cosmetics, and chemicals.
There is plenty of room here for Veeva Systems to deliver more market-beating returns in the next decade -- the stock is well-positioned to quadruple by the end of 2034.
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Prosper Junior Bakiny has positions in Intuitive Surgical. The Motley Fool has positions in and recommends Intuitive Surgical and Veeva Systems. The Motley Fool recommends Medtronic and recommends the following options: long January 2026 $75 calls on Medtronic and short January 2026 $85 calls on Medtronic. The Motley Fool has a disclosure policy.
