Today, we’re looking into the future in order to determine which stocks to buy for long-term growth. Obviously, a lot can change in the next 25 years. Imagine back to 1995, if you were alive, and consider what 2020 was predicted to look like. The point is that it’s not easy to make accurate projections the farther out you go.
That said, given current trends, the companies discussed here have strong chances to grow rapidly over that period. They are all positioned to benefit from secular trends and represent current growth sectors. While they all look good today, they are positioned to become much, much more valuable in the coming decades.
MercadoLibre (MELI)
MercadoLibre (NASDAQ:MELI) has been compared to Amazon (NASDAQ:AMZN) many times. I’ve probably written the phrase “the Amazon of Latin America” to describe it and, if you’ve read about it before, you’ve likely heard the phrase too.
The firm is the eCommerce champion of Latin America, with a footprint that spans from Mexico to Argentina. MercadoLibre is growing quickly today and it has carved out a position that ensures it will continue to do so into the future.
In order to grow explosively for 25 years, any regional champion needs demographics in its favor. Fortunately, the Latin American and Caribbean population is expected to grow from 654 million in 2020 to 762 million by 2050, giving MercadoLibre a significant boost.
The company is doing a lot to improve digital payments throughout the region and has led to continually rapid growth.
Speaking of regional eCommerce champions, Jumia Technologies (NYSE:JMIA) is a leader in African eCommerce. While not as strong as MELI, has strong potential to be one of the stocks to buy for long-term growth.
Palantir (PLTR)
The next 25 years are going to be strong for Palantir (NYSE:PLTR). The company has tremendous opportunities ahead due to AI, U.S. defense and national security. It isn’t hyperbolic to suggest that sometime during that period that war could erupt between the U.S. and China.
Whether that happens or not, Palantir is going to grow rapidly. The firm has already begun to establish itself as one of the leading analytics firms with strong ties to the defense sector. It is investing in AI that is being trained to understand the geopolitical dynamics of the current world. I strongly suspect that Palantir is also using that software to create multiple scenarios and potential outcomes related to U.S.-China relations.
Earlier this year, Palantir reached profitability. All signs point to a bright future for the relatively young firm. In other words, it has a lot more runway with which to grow moving forward. Palantir was awarded a multi-year contract worth $463 million to deliver technology to the U.S. Special Operations Command in June. That’s yet another signal that Palantir has strong potential to become the go-to DoD analytics firm for the long term.
SolarEdge (SEDG)
SolarEdge (NASDAQ:SEDG) provides solar inverters, batteries and energy management systems. It’s a strong solar energy stock to consider for a long-term investment.
One of the primary reasons to consider SolarEdge over its competitors is that it has experienced rapid growth very recently. In 2018, SolarEdge didn’t eclipse $1 billion in sales. By 2021, it was nearing $2 billion. And just a year later, SolarEdge pushed past $3 billion in sales.
Another reason to consider SEDG over other solar stocks has to do with its use of capital. Its cost of invested capital is very close to its return on invested capital. It compares much more favorably in that regard to similarly well-known firms like First Solar (NASDAQ:FSLR). The comparison between capital cost and return is known as value creation and SolarEdge is very close to that threshold.
It’s one of the most prominent firms in the space and has established a first mover advantage that will help it as the sector continues to grow over the coming years and decades.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
