10 Best Stocks to Buy That Represent the Future

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best stocks to buy - 10 Best Stocks to Buy That Represent the Future

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There’s plenty of discussion on Wall Street about a looming recession. Part of the Treasury yield curve has inverted. The labor market is starting to cool and the economy added less jobs than expected last month. Analysts are significantly reducing their corporate earnings growth estimates for next year. Debt levels have climbed to levels not seen since before the recession. Interest rates are going up. Tariffs could get bigger. Neither of which bodes well for uncovering the best stocks to buy.

Pick your poison. All around, there are reasons to be worried about the stock market in the near term. When there’s worry in the stock market, there’s turbulence. And when there’s turbulence, stocks don’t tend to hold on gains for long. Amid all this volatility and near-term noise, it is important for investors to look at the big picture. At some point over the next one to five years, stocks will crash. That is just the inevitability of the boom-bust cycle.

How should investors best prepare for this? Invest in the best stocks today that will rule the future.

Why? Because all stocks will get hit in a bear market. Ideally, you avoid the bear market altogether. But, timing a bear market is tough. So, for the 95% of us who won’t be able to time the bear market, the best strategy is to invest in stocks that will survive bear markets and head higher in the long haul.

The group of stocks that is best positioned to do that is the group that represents the future. The future doesn’t slow down for anyone, nor does it get derailed by a bear market. Instead, the future always comes, and the group of stocks that represent the future will ultimately head higher in a five to ten-year window.

With that in mind, let’s take a look at a list of 10 stocks that represent the future.

amazon stock amzn stock

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Best Stocks to Buy for the Future: Amazon (AMZN)

Big Ideas: Omnichannel commerce, cloud, logistics and digital advertising

The first stock on this list is an obvious choice: Amazon (NASDAQ:AMZN) is a technology giant with ever-increasing exposure to some of tomorrow’s most important markets.

First, it is important to note that the e-commerce growth narrative still isn’t over. Only about 10% of all retail sales in the U.S. are digital. That is a tiny share. In a decade, that share could easily be 20% or higher. As such, Amazon’s e-commerce business could easily double over the next decade.

Second, it is equally important to note that Amazon is much more than e-commerce. The company is the leader in the cloud market, which promises to be huge in a decade, and is in the early stages of creating huge logistics, offline retail and advertising businesses.

Altogether, Amazon in a decade will be much bigger and much more dominant than it is today. Because of this, Amazon stock is a long-term winner.

Battery Fires Won't Kill Tesla, But They Sure Won't Help

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Best Stocks to Buy for the Future: Tesla (TSLA)

Big Ideas: Electric Vehicles and Self-Driving

The electric vehicle revolution is just starting to go mainstream, and that is great news for electric vehicle leader Tesla (NASDAQ:TSLA).

In a decade, the auto world will be dominated by electric vehicles. Across the globe, legislation is aggressively moving to encourage electric vehicle adoption. The cars are getting better, cheaper, and more reliable. Huge money is being poured into setting up a more extensive charger network. Demand from consumers is growing due to political and social trends creating greater eco-awareness.

Also in a decade, Tesla will be at the heart of this electric vehicle dominated world. Tesla has already established a name brand for itself as the electric vehicle brand. As the company continues to roll out new models over the next several years, and EV adoption globally picks up steam, this company will morph into something huge.

Overall, Tesla is the future the automotive industry. As such, Tesla stock promises to be worth a lot more in a decade than what it’s worth today.

Shopify Stock Could Be on Its Way to Making New Highs

Best Stocks to Buy for the Future: Shopify (SHOP)

Big Ideas: e-commerce and Coordinated Economy

E-commerce enabler Shopify (NYSE:SHOP) has been a Wall Street favorite for the past several years, and will remain so through the next several years thanks to two huge trends.

The first trend is e-commerce. As mentioned in the Amazon bit, e-commerce sales only represent 10% of total retail sales in the U.S. and less globally, implying tons of runways left for e-commerce before it reaches maturation. More importantly for Shopify, e-commerce market share is highly concentrated among a few big companies today because smaller companies haven’t fully made the digital shift. As those companies do make that shift over the next several years, e-commerce market share will become more democratized, and more sales will flow through Shopify websites.

The second trend is the coordinated economy. The popular term for this economy is the “gig” economy. But, coordinated feels like a better word to me. The world is starting to figure that the power of the many is consistently greater than the power of the few, but that the power of the many requires coordination to effectively work. As such, companies like Uber and Airbnb are coordinating the skills and resources of the many to provide more efficient services across the entire economy. Shopify is doing this with sellers. As such, Shopify is fully immersed into the coordinated economy trend, and within the next decade, this economy will be everywhere.

Overall, Shopify is the future of e-commerce. As such, so long as the world becomes increasingly decentralized and digital, Shopify stock will be a big winner.

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Best Stocks to Buy for the Future: Canopy Growth (CGC)

Big Ideas: Global Cannabis Legalization and Popularization.

Of course, this list would be incomplete without a pot stock. Canadian cannabis producer Canopy Growth (NYSE:CGC) has separated itself from the pack in a crowded cannabis space, and projects to be a global leader in the soon-to-be-huge recreational and medicinal cannabis markets.

In fact, no one really knows the total addressable market for cannabis. There are studies out there that show that smoking weed is nearly as popular as drinking alcohol, though, and far more popular than smoking cigarettes. The global alcoholic beverage and tobacco markets are both multi-hundred billion dollar markets. As such, cannabis easily projects as a multi-hundred billion dollar market, and that’s not even including the medicinal side of things.

Canopy Growth is the early leader in this market. The company is the revenue leader in the early stage Canadian cannabis market, has global exposure, a ton of production capacity, a robust product line-up, and, most importantly, a multi-billion dollar investment from alcoholic beverage giant Constellation Brands (NYSE:STZ).

Overall, cannabis projects to be a huge global market one day, and Canopy Growth projects to be a leader in that market. As such, CGC stock is positioned for significant long-term share price appreciation.

NVIDIA Stock nvda stock

Source: via Nvidia

Best Stocks to Buy for the Future: Nvidia (NVDA)

Big Ideas: Data and Artificial Intelligence (AI)

When it comes to ignoring near-term noise and focusing on the big picture, perhaps the best example of that today is chipmaker Nvidia (NASDAQ:NVDA).

Nvidia stock has dropped in a big way over the past few months due to two near-term headwinds, neither of which have staying power in a long-term window. First, the cryptocurrency bubble has popped. That killed crypto mining demand, which represented about 10% of Nvidia revenues at its peak, and this has created inventory issues which the company will have to work through over the next one to two quarters. Second, tariffs threaten to dilute demand and raise costs.

Neither of those headwinds will last longer than twelve months, if that. Meanwhile, what will last longer than twelve months are the underlying tailwinds in data and AI. When it comes to data, we are in the early stages of data becoming a currency, and being utilized and stored in bulk everywhere. On the AI front, we also in the early stages of AI becoming a landmark changing technology with applications across every industry.

Nvidia builds the stuff which powers these two markets. As such, in the big picture, Nvidia is the foundation upon which the secular growth AI and data markets will become simply massive.

ADBE Stock Has the Right Stuff to Keep the Momentum Going

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Best Stocks to Buy for the Future: Adobe (ADBE)

Big Ideas: Cloud and Experience Economy

Creative cloud giant Adobe (NASDAQ:ADBE) has been a big winner over the past several years due to the company’s transition into a high margin subscription business. This winning streak is set to continue over the next few years thanks to the company’s entry into the cloud market.

There are two underlying tailwinds here. The first is the huge cloud migration. Everyone is moving to the cloud. It’s cheaper, more convenient, and simply better. But, only 20% of enterprise workloads globally have migrated to the cloud. This transition is still in its early innings. As this transition continues to play out with strong momentum over the next few years, Adobe will continue to win cloud clients.

The second tailwind is a global shift toward the experience economy. Thanks to the widespread emergence of social sharing and visual first apps like Instagram and Snapchat, today’s younger generation is more experience-oriented than their parents. Nearly 80% of millennials value experiences over products. Because of this, the need for enterprises to communicate experiences through visuals is now more important than ever. Insert Adobe, who is the has established a leadership position in this market.

Overall, Adobe’s position as a cloud company with broad exposure to the experience economy gives the company tremendous firepower in a long-term window. As such, Adobe is a stock that represents the future.

Intuitive Surgical, Inc. (NASDAQ:ISRG)

Best Stocks to Buy for the Future: Intuitive Surgical (ISRG)

Big Ideas: Automation and Robotics

Artificial intelligence is the next big thing, and one of the most prevalent and obvious applications of AI is through automated technologies and robotics. This application is why medical devices giant Intuitive Surgical (NASDAQ:ISRG) has robust long-term growth potential.

As the robot revolution has spread into the medical arena, Intuitive Surgical has gone from a little-known medical device company into a $50 billion medical robotics giant. At the core of this revolution is the company’s da Vinci surgical system. This system is essentially a robot that acts as a surgery assistant. Demand for da Vinci has exploded higher over the past several years as the medical world has increasingly adopted next-gen technology to improve surgical outcomes.

But, this is just the tip of the iceberg. There are over 400,000 operating rooms in the world. Less than 5,000 have a da Vinci operating system. That means there’s lots of room for da Vinci to grow globally.

As such, ISRG stock remains a secular winner. Valuation is big. But, it’s always been big. ISRG’s big growth justifies the big valuation. Thus, ISRG is a stock you want to accumulate on dips and hold for the long haul.

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Best Stocks to Buy for the Future: The Trade Desk (TTD)

Big Ideas: Programmatic Advertising and Automation/AI

Another prevalent and obvious application of AI and automated technologies is in the advertising world. Ads used to be transacted between individuals and firms. Now, ads are bought and sold by computers. This computed-powered ad buying is called programmatic advertising, and one company has risen to the top of this field: The Trade Desk (NASDAQ:TTD).

Programmatic advertising is the future of ad transactions. Through simply leveraging AI and data, programmatic advertising makes ad buying and selling quicker, more convenient, and cheaper. In this space, TTD has emerged as a clear leader. Thus, so long as TTD maintains this leadership positioning, the company will be a huge grower over the next several years as programmatic advertising becomes the global norm.

The opportunity here is massive. The global advertising market is marching towards $1 trillion. Gross spend through Trade Desk was under $2 billion last year. Meanwhile, Trade Desk’s market cap is just $6 billion. Clearly, there’s a lot of runway for Trade Desk’s gross spend and valuation to grow.

In the long run, every ad will be transacted programmatically. Most of that programmatic ad spend will happen through Trade Desk. Considering that is a $1 trillion large market, Trade Desk is unequivocally a stock with tons of growth potential over the next several years.

What’s Working and What’s Not Working for SQ Stock

Source: Via Square

Best Stocks to Buy for the Future: Square (SQ)

Big Ideas: Non-cash Payments and e-commerce

Cash is increasingly becoming a thing of the past, but consumers today are shopping more than ever. That means card and digital payment volume is growing rapidly. But, not every retailer can process card and digital payments. Insert Square (NYSE:SQ), a company that is enabling a new era of cash-less commerce.

At its core, Square is a domestic payments processor with a ton exposure to the U.S. consumer. The healthier the U.S. consumer is, the more they buy, and the more they buy, the more they use Square’s payment processors and apps. Competition is mitigated, and the company is levered to secular growth in card payment volume. Thus, as goes the U.S. consumer, so goes Square. It’s a pure play on the U.S. economy, and the U.S. economy is as good a bet as any in the world.

The growth potential here is enormous. Square presently controls just 0.2% of the $40 trillion and growing global consumer spend market. Inevitably, as cash-less commerce becomes more and more of the norm, Square’s market share will grow significantly over the next several years. Moreover, Square has created an ecosystem surrounding its digital payment processors. So, the more consumers and enterprises interact with Square’s payment processors, the more likely they are to join things like Square Capital and Square Cash.

Square’s current market cap is just $25 billion. Payment peers Visa (NYSE:V) and PayPal (NASDAQ:PYPL) have market caps of $300 billion and $100 billion, respectively. Thus, so long as Square can maintain its current growth trajectory, a $100 billion-plus valuation in the future isn’t out of the question.

Netflix stock nflx stock

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Best Stocks to Buy for the Future: Netflix (NFLX)

Big Ideas: Streaming and Data

Yet another great example of near-term noise clouding the long-term picture is streaming giant Netflix (NASDAQ:NFLX). Near-term concerns regarding higher rates pressuring the company’s debt load and more streaming competition in 2019 have bears in control of this stock at the present moment.

But, this won’t last for long. At its core, Netflix is all about two things: cord cutting and content. So long as consumers continue to cut the chord in bulk, the global streaming audience will grow. Moreover, so long as Netflix produces quality original content at a healthy rate, a majority of that streaming audience will subscribe to Netflix. It’s that simple.

Fortunately, the cord-cutting trend isn’t slowing. If anything, it’s accelerating. Moreover, Netflix’s content isn’t getting worse. Again, if anything, it’s only getting better. As such, even with rising competition in 2019, Netflix will continue to win the lion’s share of a rapidly growing cord-cutting pool.

Overall, streaming is still the future of entertainment, and Netflix is still the face of streaming. Until this changes, Netflix stock is supported by big growth long-term fundamentals.

As of this writing, Luke Lango was long AMZN, TSLA, SHOP, CGC, NVDA, ADBE, ISRG, TTD, SQ, PYPL and NFLX. 


Article printed from InvestorPlace Media, https://investorplace.com/2018/12/best-stocks-buy-now-represent-future/.

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