- There are opportunities for great investment returns based on long-term growth trends.
- Streaming, connectivity, cybersecurity, paperless documents, and 3D tech could all experience increased demand in the years to come.
- These five stocks hold leadership positions in each of these areas, making them great investment opportunities.
Investors who can identify “big picture” trends and have the patience to wait for those trends to take hold can be rewarded with great long-term returns. We often get caught up in the day-to-day headlines we see on the news, but it’s often a yearslong view that benefits investors the most.
These trends are happening right before us, and there are still years of growth ahead for the companies that drive these changes. Here are five investing themes and the growth stocks well-equipped to benefit from them.
1. Continued strength in streaming
Consumers are steadily moving away from traditional cable television and adopting streaming services such as Netflix, Hulu, and HBO Max. Technology platform Roku (NASDAQ:ROKU) is a leader in providing the “operating system” many streaming services run on, whether through streaming sticks or the software television makers use to power their products.
Roku’s business has shifted from depending on hardware sales to a platform business that generates revenue from ads and subscriptions from viewers using their Roku TVs. The company’s user base has expanded from 22 million active accounts in Q2 2018 to 55 million in its most recent quarter, Q2 2021.
As Roku gains more customers, it has more leverage with streaming partners and advertisers; its platform becomes the “gateway” to the streaming audience. Roku doesn’t care whether you watch Netflix, or Hulu, only that you do it on a Roku TV. The company has had disputes with streaming companies such as Comcast, Alphabet‘s Google, and AT&T, but these have largely been settled (all but Google) with services resuming on Roku; the audience on Roku TVs has become too large to pass up.
Roku is actively pursuing expansion in Brazil and the UK. Moving into the years ahead, investors will want to monitor the company’s international growth efforts as it works to pick up more global users.
2. Connecting the world
The last decade’s improvements in connective technology such as 4G and 5G have led to an ability for companies to better communicate with their customers. Twilio (NYSE:TWLO) operates a cloud-based customer engagement platform that gives developers the ability to custom build user-experiences for their business including customer chat, reminders, text alerts, and more.
3. The battle of cybersecurity
The increasingly digital nature of the world has also resulted in increased cybercrime, marked by several high-profile breaches of large companies like Alibaba, Facebook, and many more over the past decade.
Crowdstrike Holdings (NASDAQ:CRWD) is a cloud-based cybersecurity company that connects all of its customers to an artificial intelligence-powered network. When a threat emerges, the network collectively defends against the threat and learns from it.
4. Going paperless
Communications have steadily become digital over the years, and DocuSign (NASDAQ:DOCU) provides a secure way to digitally sign and transfer paperwork.
5. Creating the virtual world
Entertainment is becoming increasingly interactive, and gaming and the metaverse have become hot topics in the investing community. Unity Software (NYSE:U) is a technology engine that powers 3D environments.
These five companies are showing a strong ability to grow revenue thanks to leading positions in growing markets. Investors will need to monitor each business for continued revenue growth, but the long-term opportunities ahead could make each of these stocks a fantastic part of a long-term investment strategy.