As history clearly suggests, the biggest gains in the stock market are made over the long term. The 3,600% rise in the S&P 500 index over the last 40 years is evidence that time in the market is more important than timing the market.
But some innovative companies have crushed the performance of the broader indexes. Take Amazon , for instance, which has soared 191,000% since its public listing in 1997. Given the rapid pace with which technology evolves, the next Amazon-like opportunity could be right around the corner.
These Motley Fool contributors think Nvidia ( NASDAQ:NVDA ), Snowflake ( NYSE:SNOW ), and Palantir ( NYSE:PLTR ) could be the next tech disruptors to beat the market this decade (and beyond). Image source: Getty Images. Graphics are the future of reality
Anthony Di Pizio (Nvidia): Semiconductors have become the most important component in modern manufacturing. They’re the advanced computer chips that power digital consumer goods like smartphones, gaming consoles, and even cars. As products trend further toward digitization, demand for these chips is soaring and Nvidia is a best-in-class producer.
The company is best known for its graphics cards, which make it a key player in futuristic technologies like virtual reality, augmented reality, and even self-driving vehicles. But in the present, Nvidia’s graphics products are a red-hot favorite among consumers for PC gaming applications, to the point where global supply is constantly running short. In fact, the company sold over $3 billion worth of gaming-related graphics cards alone in the most recent fiscal second quarter, 85% more than the same quarter last year.
On the whole, assuming Nvidia’s current price-to-sales ratio remains the same, it needs to grow its revenue by 20% per year until 2030 for its stock to increase fivefold from here, and therefore turn $200,000 into $1 million . Right now, it’s crushing that growth rate.
But Nvidia is also highly profitable. It delivered a record high $6.90 in earnings per share in fiscal 2021, which represented 53% growth compared to fiscal 2020, and led the company to pay $395 million in dividends throughout the year. It’s not often technology companies offer sound profitability to accompany their astronomical growth rates, so Nvidia’s investment case certainly stands out.
But it’s the company’s smallest segments — professional visualization and automotive — that could take over as the biggest drivers of growth over the long term. After all, the future of technology looks set to be dominated by augmented realities and autonomous vehicles. Image source: Getty Images. Snowflake: The epitome of neutrality
Jamie Louko (Snowflake): Finding disruptive companies that could provide immense returns over the next 10 years can be difficult, but Snowflake — a company that has been capitalizing on the enterprise’s shift to the cloud for data storage — could be the one. Snowflake is a data warehouse provider — meaning that when enterprises collect data from their business operations and want to store it for usage at a later time, they can go to Snowflake to store it.
Snowflake competes with Amazon’s AWS, Microsoft ‘s Azure, and Alphabet ‘s Google Cloud, but Snowflake has a major competitive edge: neutrality. If a company has data stored on both AWS and Azure the company would have to go through both systems individually to receive its data to use it — which is rather time-consuming — and with it stored in two different areas it can be difficult to analyze it effectively. With Snowflake, it would retrieve that data from either data warehouse for the customer, and transform the data into an easily understandable format so it can be analyzed.
The company owns storage space on AWS and Azure so that companies can choose where they want data stored for the future. While this poses a risk to Snowflake — by permanently giving money to its competition — this is how the company remains the neutral party. This aspect of the business seems to be important to customers — Snowflake has 116 customers spending over $1 million on the platform while it grew its second-quarter 2021 revenue by 103% year over year to $272 million. Its net retention rate sits high at 169%, meaning that customers spend 69% more today than they did during the year-ago period.
Despite the company’s operating loss of 58% of revenue, it is valued at 110 times sales. The company is executing on all fronts, however, and its total addressable market is massive and growing: Snowflake expects companies’ cloud spending to increase 235% to $356 billion annually by 2025. While its valuation is […]
source 3 Disruptive Stocks That Could Turn $200,000 Into $1 Million by 2030
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