Now is the time to look for growth stocks to buy and hold for the next 10 years. Why? Because the novel coronavirus pandemic, while serious and scary, is also temporary. It will pass, like every other epidemic and pandemic before it. So will this economic recession, like every other slowdown before it. And so will this market panic, like every other crash before it.
When all those do pass, stocks will rebound, just as they have every other time in history.
You have to remember: this isn’t the first time the world has faced a pandemic. It’s also not the first time the economy has tumbled into a recession. Or the first time stocks have crashed. Yes, the coronavirus pandemic is characteristically unique from previous “Black Swan” events. But the housing crisis was also characteristically unique in 2008/09. The September 11 attacks were characteristically unique in 2001. The dot-com bubble was characteristically unique in 2000.
And through all those characteristically unique crises, we survived. The stock market survived. Over the past 200 years, stocks have climbed an average of 6.5% (after inflation) … through crashes, pandemics, world wars and recessions.
This time won’t be different. The coronavirus pandemic will pass within the next few months. Economies will re-open. Consumer and enterprise behavior will normalize. Stocks will rebound.
Big picture: now is the time to go shopping for stocks to buy over the next decade. With that in mind, here are the 10 best growth stocks to buy and hold for the next 10 years:
Best Growth Stocks to Buy for the Next 10 Years: Shopify (SHOP)
At the top of this list of the best growth stocks to buy and hold for the next 10 years is e-commerce solutions provider Shopify (NYSE:SHOP).
The bull thesis here is surprisingly simple. Consumers are pivoting from offline shopping, to online shopping. As they do, physical storefronts are becoming antiquated, and websites are becoming hyper-relevant. Shopify makes those websites — and they do a better job at doing so than anyone else in the world.
Over the next decade, as consumers continue to pivot towards more offline shopping, retailers and merchants will continue to invest less heavily in their physical selling presence, and invest more heavily in their online selling presence. That means retailers and merchants will spend more money on Shopify’s suite of online selling tools, and that the volume of sales flowing through Shopify websites will rise dramatically.
As all that happens, Shopify’s revenues will charge higher. So will profits, since this is a ~60% gross margin business. And so will SHOP stock, because big profit growth almost always leads to big share price growth.
Next up on this list of the best growth stocks to buy and hold for the next 10 years is social media and digital advertising giant Facebook (NASDAQ:FB).
Facebook is the backbone of online social interactions. The company’s core app, Facebook, is an online utility, and equivalent to the internet’s version of someone’s ID (think about how many platforms have “Log In with Facebook”). Meanwhile, Instagram is the world’s most popular photo- and video-sharing app at a time when consumers are obsessed with filming themselves. Even further, Messenger and WhatsApp are the world’s two most popular non-SMS messaging platforms.
All of those platforms have over a billion users. All of them attract hours of engagement per user every single day. Yet, only two of them — Facebook and Instagram — are fully loaded with ads, and none of them have cracked the e-commerce code.
Over the next decade, Facebook will roll-out ads on Messenger and WhatsApp (thereby strengthening its dominance in the secular growth digital ad market) and turn its nascent e-commerce projects into full-blown e-commerce businesses (thereby introducing an entirely new and large e-commerce revenue stream). The combination of these actions will sustain 20%-plus revenue and profit growth at Facebook for a lot longer.
That big growth will power equally big gains in FB stock.
The Trade Desk (TTD)
Staying in the digital advertising world, another top growth stock to buy for the next decade is programmatic advertising leader The Trade Desk. (NASDAQ:TTD).
Long story short, programmatic advertising is the future of advertising. Advertising used to be a clunky, inconsistent, and human-driven process with a bunch of guessing and checking. Programmatic advertising improves the entire process, by leveraging product and consumer traffic and interest data to inform dynamic algorithms which, in real-time, place the right ads in front of the right consumers, thereby increasing the relevance and effectiveness of each and every ad.
It’s a breakthrough in digital advertising which simply makes the whole process better. As this breakthrough sweeps across the digital ad industry over the next decade, more and more marketers will turn towards The Trade Desk — who is widely considered to be the leading demand-side programmatic ad platform — to programmatically manage their ad inventory.
As this happens, this relatively small $12 billion company, will become an increasingly large and important player in the $1 trillion global advertising market. Revenues, profits, and the stock price will all soar.
The largest company on this list of growth stocks to buy for the next 10 years, Amazon (NASDAQ:AMZN) is as attractively positioned for big growth over the next decade as many of the smaller companies on this list.
That’s because everywhere consumers and businesses are pivoting, Amazon is there to greet them with a best-in-breed service.
Over the next decade, consumers will continue to migrate their shopping online. Amazon.com is the world’s largest and most capable e-commerce platform.
Over the next decade, consumers will also spend more time watching streaming content, like movies and games. Amazon owns the world’s second largest streaming movie service, with Amazon Video, and the world’s largest game streaming service, with Twitch.
Meanwhile, enterprises over the next decade will increasingly shift their advertising budgets to the digital channel, and migrate their workflows, processes, and data into the cloud. Amazon has a rapidly scaling and very big digital advertising business, and owns the world’s largest cloud infrastructure business in Amazon Web Services.
It doesn’t take a rocket scientist to connect the dots. Amazon is a leader in all of tomorrow’s most important industries. That positions the company to generate huge revenue, profit, and share price growth over the next 10 years.
Another one of the best growth stocks to buy over the next decade is Roku (NASDAQ:ROKU), and that’s because this company is a pure-play on the 2020s streaming TV boom.
In the 2010s, consumers bundled together a handful of streaming services with cable TV packages, mostly because cable TV still offered content which was missing in the streaming TV world (like live shows, sports, and news). But, because every major media company is now pivoting into the streaming TV world, all of that content is now available in the streaming channel, too, leaving consumers little reason to stick with expensive and bulky cable TV in the 2020s.
Over the next decade, then, the true cord-cutting will happen. Hundreds of millions of households across the globe will cut the cord, and package together multiple streaming services to satisfy their at-home media needs. As that happens, the hundreds of billions of dollars sitting in the linear TV world, will chase engagement into the streaming TV channel.
That’s great news for Roku. The company has established dominance as the de facto software ecosystem from which consumers can seamlessly access all of their favorite streaming services. It’s the top of the funnel in streaming content discovery. And because it’s the top of the funnel, Roku will win over the lion’s share of ad dollars that migrate into the streaming channel over the next decade.
Revenues will consequently roar higher. So will profits, because ads are high-margin. And so will ROKU stock.
Arguably the most interesting stock on this list is Pinterest (NYSE:PINS).
When thinking of the best growth stocks to buy for the next 10 years, Pinterest probably won’t come to mind for most investors. But this overlooked nature of the Pinterest growth narrative is what gives PINS stock such explosive upside potential.
Pinterest is a big social media platform with over 300 million monthly active users. Those users aren’t going anywhere time soon. If anything, the user base will grow — by a lot — over the next 10 years because Pinterest has crafted a niche for itself as an inspiration and visual discovery platform at at time when consumers are increasingly looking for things to do.
Concurrently, Pinterest isn’t an “attention” play like other social media platforms, which compete for users’ time. Instead, Pinterest is an “intention” play. Consumers don’t use Pinterest that often. But when they do, they use it with the intent of finding something to do. This intent-driven usage should allow Pinterest to rapidly scale its nascent digital ad business through high conversion rates, since intent-driven users are more likely to interact with a targeted ad than a user who is just aimlessly scrolling on Facebook.
Connecting the dots, Pinterest over the next decade will be defined by sustained big user growth, enormous ad revenue growth, and even more enormous profit growth (because digital advertising is a high-margin business at scale, and Pinterest is a low-margin business today due to lack of scale).
All of that growth will drive big gains in PINS stock.
A pure-play on the cashless revolution, payments technology company Square (NYSE:SQ) is one of the best growth stocks to buy over the next decade as cash increasingly becomes a thing of the past.
The bull thesis here is really simple.
Consumers still use cash quite frequently. But there has been a noticeable shift towards card and digital payments over the past few years as payment technology has improved. Over the next decade, this shift will only accelerate, as payment technology improvements underscore the inconvenience and shortcomings of cash payments. Thus, by the end of the decade, you could be looking at a world in which cash payments no longer exist.
That means every physical retailer, merchant, and restaurant needs to be able to accept card and digital payments. Insert Square. They provide the tools — such as card payment readers — which enable physical sellers to accept all forms of non-cash payments. Over the next decade, essentially every physical seller in the world will adopt these payment technology tools, and the volume of sales flowing through Square’s technology platform will grow dramatically.
That will power sustained huge revenue growth at Square. Such big growth will keep SQ stock on a winning path for the next several years.
Moving onto the cloud world, one of the best growth stocks to buy for the next 10 years to play the cloud boom is identity cloud solutions pioneer, Okta (NASDAQ:OKTA).
Every enterprise in the world is pivoting to the cloud. This pivot means every enterprise in the world has to find new cloud security solutions to protect all their workflows, processes, and data that are no longer on-premise. However, traditional cloud security solutions were limiting and somewhat defeated the purpose of migrating to the cloud, in that they created “castles” of security surrounding the company’s cloud operations which constrained workflow flexibility and employee mobility.
That’s why Okta came up with the Identity Cloud. The Identity Cloud is a novel breakthrough in cloud security which turns individuals into the defense perimeter. It essentially eliminates the “castle” of security, and instead outfits each individual with their own “body armor” of security. In so doing, Okta’s identity-based cloud security solutions optimize for workflow flexibility and employee mobility, without compromising on security.
It’s a win-win. And this win-win solution will gain significant traction in the enterprise IT landscape over the next decade, powering huge gains in Okta’s revenues, profits, and stock price.
Beyond Meat (BYND)
The plant-based meat megatrend will gain tremendous momentum in the 2020s, and as it does, the industry’s leader, Beyond Meat (NASDAQ:BYND), will turn into one of the market’s biggest winners.
Thanks to the widespread proliferation of social media, consumers today are more socially and environmentally aware than ever before. This has resulted in a shift in consumer behavior towards picking products and services which are socially and environmentally positive. Think electric cars, which save the environment. Or green energy, which also saves the environment.
Plant-based meat fits in perfectly with this consumption shift. Relative to animal-based meat, plant-based meat is socially positive (you don’t have to kill any animals) and environmentally positive (animals are a big contributor of carbon emissions). Consequently, as more consumers align themselves with socially and environmentally positive behavior over the next decade, consumption of plant-based meat will soar.
Beyond Meat is the leader in this market. They have market share advantages today, as well as branding advantages, technology advantages, and distribution and partnerships advantages. All of these advantages position the company to sustain dominance in the plant-based meat market over the next 10 years.
Ultimately, that means Beyond Meat is positioned for explosive growth over the next 10 years. That explosive growth will power sustained strength in BYND stock.
Last, but not least, on this list of growth stocks to buy for the next 10 years is digital education leader Chegg (NYSE:CHGG)
Chegg has created a new connected learning platform that will become commonplace across all U.S. high school and college classrooms over the next decade.
Breaking that down, Chegg has created a online platform through which students can access on-demand academic resources, like e-textbooks, step-by-step homework solutions, tutoring, test prep, writing help, so on and so forth. It is essentially a digitized and on-demand version of any college or high school’s Academic Resources department.
Over the next decade, the education process across America will become increasingly digitized for cost and convenience purposes. As it does, Chegg will go from a relatively niche, connected learning platform which only 3 million high school and college students use, to a standardized connected learning platform that all 36 million high school and college students use every single day.
Thus, over the next 10 years, Chegg is positioned for huge subscriber growth. Huge subscriber growth will power huge revenue growth, which will power huge profit growth, and in turn power huge share price gains.
To sum it up, the top 10 best growth stocks to buy over the next 10 years are as follows:
- The Trade Desk
- Beyond Meat
Luke Lango is a Markets Analyst for InvestorPlace. He has been professionally analyzing stocks for several years, previously working at various hedge funds and currently running his own investment fund in San Diego. A Caltech graduate, Luke has consistently been rated one of the world’s top stock pickers by various other analysts and platforms, and has developed a reputation for leveraging his technology background to identify growth stocks that deliver outstanding returns. Luke is also the founder of Fantastic, a social discovery company backed by an LA-based internet venture firm. As of this writing, he was long SHOP, FB, TTD, ROKU, PINS, OKTA, BYND, and CHGG.