This article presents an overview of the 5 Stocks That Will Make You Rich in 5-10 Years. For a detailed overview of such stocks, read our article, 11 Stocks That Will Make You Rich in 5-10 Years.
5. Apple Inc (NASDAQ:AAPL)
Number of Hedge Fund Investors: 134
Apple Inc (NASDAQ:AAPL) is one of the notable stocks many analysts and finance experts believe has the potential to make on rich in the next few years. Keith Fitz-Gerald, principal at the Fitz-Gerald Group, recently said in a program on CNBC he doesn’t “get” the skepticism around Apple Inc (NASDAQ:AAPL). The analyst said there are about 240 million iPhones due for an upgrade, while Apple Inc (NASDAQ:AAPL) has a billion paid subscribers and several other long-term growth catalysts. He said he’d be “perfectly happy” buying more shares.
Jim Cramer has also time and again said in his programs that Apple Inc (NASDAQ:AAPL) is a stock to buy and hold.
In its fourth quarter 2023 investor letter, ClearBridge Dividend Strategy stated the following regarding Apple Inc. (NASDAQ:AAPL):
“We meaningfully reduced our exposure to Apple Inc. (NASDAQ:AAPL) in 2023. Apple is the largest company in the world and produces terrific products that engage users for hours each day. Despite the company’s size, ubiquity and relevance, however, Apple’s growth has slowed dramatically. Its fiscal 2023 earnings were flat with those of 2022. Apple trades at 30x earnings; sustaining that multiple will require a meaningful acceleration in revenues. While such an improvement is possible, we do not see any obvious catalysts for adding tens of billions of dollars to Apple’s topline. Consequently, the risk-reward skews negatively.”
4. NVIDIA Corp (NASDAQ:NVDA)
Number of Hedge Fund Investors: 180
The AI boom is just getting started and NVIDIA Corp (NASDAQ:NVDA) is a clear leader in the AI chips industry which makes the stock one of the suitable options to buy and hold. As AMD and some other companies begin to make AI chips, there are concerns NVIDIA Corp (NASDAQ:NVDA) might not be able to continue its momentum. But many analysts believe the demand for AI chips is so huge that a few new entrants in the market would not be able to dent NVIDIA Corp (NASDAQ:NVDA).
A latest analysis shows that despite a 236% increase in stock price over the past one year, NVIDIA Corp (NASDAQ:NVDA) is the cheapest of the big three semiconductor companies (Intel, AMD, NVIDIA).
In December, Stacy Rasgon, Bernstein senior chips analyst, said while talking to CNBC that NVIDIA Corp (NASDAQ:NVDA) remains in the driver’s seat in the chip sector.
Blue Tower Asset Management made the following comment about NVIDIA Corporation (NASDAQ:NVDA) in its Q3 2023 investor letter:
“In addition to the use of larger datasets, the training speed of AI models has increased dramatically. NVIDIA Corporation (NASDAQ:NVDA)’s stock almost tripled in the first 3 quarters of this year with a 197% gain, and a large reason for this is the huge role they have played in recent AI improvements. Nvidia’s single GPU AI training speed performance has increased by a dramatic 1000x in 10 years with only 2.5x coming from Moore’s Law3 driven increases in chip density. Besides better chip manufacturing, there were three other improvement factors at play: simplifications in number representation for the weights of the neural networks, more complex mathematical instructions for reducing the computational overhead involved in mathematical calculations, and increased neuron sparsity (in neural networks, some neurons are useless and can be pruned from the network without reducing performance significantly). In addition to these single GPU improvements, Nvidia also made improvements in data center scale architecture that allows groups of GPUs to work more efficiently together.
It is noteworthy that the vast majority of the improvement came from hardware architectural and software data improvements, rather than transition density. These improvements were likely the low-hanging fruit of training speed improvements as researchers will eventually converge on an ideal architecture. The simplification of going from 32-bit to 8-bit floating point numbers for measuring weights is a one-time gain that can’t be repeated again. I expect the rate of improvement to slow down over the next ten years and eventually approach the levels of Moore’s Law improvements in chip efficiency. The historical trend for computer hardware is for it to eventually be commoditized, and I believe this will eventually occur for Nvidia’s GPUs as well.”
3. Alphabet Inc Class A (NASDAQ:GOOGL)
Number of Hedge Fund Investors: 221
Digital advertising. Cloud. AI. Search. Futuristic projects. There are many reasons and catalysts that make Alphabet Inc Class A (NASDAQ:GOOGL) a noteworthy stock to buy and hold to get rich in the next 5 to 10 years.
Paul Meeks, veteran tech investor and professor at The Baker School of Business at The Citadel, said in a program on CNBC after Q3 earnings that the market’s reaction after Alphabet Inc Class A’s (NASDAQ:GOOGL) quarterly results was overdone as he believes a slight miss on Cloud growth estimates is not a big deal. The analyst said everything else on Alphabet Inc Class A’s (NASDAQ:GOOGL) report was impressive to him.
King Lip of BakerAvenue Wealth Management in December said that he believes Alphabet Inc Class A (NASDAQ:GOOGL) will perform better than Microsoft in 2024 since he believes the market is not fully appreciating Alphabet Inc Class A’s (NASDAQ:GOOGL) AI capabilities. The analyst also said Alphabet Inc Class A (NASDAQ:GOOGL) is cheaper than Microsoft.
Diamond Hill Long-Short Fund made the following comment about Alphabet Inc. (NASDAQ:GOOG) in its Q3 2023 investor letter:
“On an individual holdings’ basis, top contributors to return in Q3 included long positions in KKR, Ciena Corporation and Alphabet. Shares of media and technology company Alphabet Inc. (NASDAQ:GOOG) rose in the quarter as its advertising and cloud businesses remain robust and the company delivered results ahead of market expectations. From a sector perspective, communication services also managed a positive Q3 (2%), riding the ongoing wave of positive mega-cap stocks’ performance, like Alphabet.”
2. Amazon.com Inc (NASDAQ:AMZN)
Number of Hedge Fund Investors: 286
Amazon.com Inc (NASDAQ:AMZN) is one of the stocks that have the potential to keep growing in the next five to ten years according to Wall Street analysts. Analysts like the stock because of Amazon.com Inc’s (NASDAQ:AMZN) ecommerce business and Cloud, which is set to grow due to AI features Amazon.com Inc (NASDAQ:AMZN) is offering.
Sylvia Jablonski, Defiance ETFs CEO and CIO, recently said that now is the right time to pile into the Magnificent Seven group of stocks on the dip. Amazon.com Inc (NASDAQ:AMZN) is a notable member of the Magnificent Seven group.
Doug Anmuth, head of JPMorgan’s internet research team, explained on CNBC why Amazon.com Inc (NASDAQ:AMZN) is on top of his favorite picks for 2024. The analyst said he saw strong improvement in Amazon.com Inc’s (NASDAQ:AMZN) ecommerce business and margins expansion in 2023 and he expects this to continue in 2024.
In its October 2023 investor letter, Lakehouse Capital stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN):
“The Fund’s largest position, Amazon.com, Inc. (NASDAQ:AMZN), reported an impressive quarterly result with strong execution and cost discipline driving significant operating leverage across the business. Net sales grew13% year-over-year (11% in constant currency terms) to $143 billion whilst operating income grew 348% to $11.2 billion, well ahead of guidance and analysts’ expectations. Growth within their core e-commerce business proved resilient again and management noted that they are continuing to see material productivity and operational benefits from the recent reorganisation of their US fulfilment network. This involved transitioning from one national network to a series of eight separate regions serving smaller geographic areas.
The companies second largest segment, Amazon Web Services (AWS), grew revenue at 12%, a rate consistent with what was achieved last quarter. This was pleasing to see as it signalled that growth is stabilising after several quarters of deceleration driven by customer optimisations. Whilst these customer optimisations are moderating, management noted that they still remain at elevated levels, and hence, they will likely provide a slight (albeit diminishing) headwind for the next few quarters. In any event, we are not concerned as we believe the current headwinds are more a factor of cyclical weakness, as opposed to any fundamental issues. Zooming out, AWS remains the leading cloud provider (in what is an increasingly two-horse race with Microsoft’s Azure) and with 90% of global IT spend still on-premise there is still plenty of runway for future growth.”
1. Microsoft Corp (NASDAQ:MSFT)
Number of Hedge Fund Investors: 306
Microsoft Corp’s (NASDAQ:MSFT) huge investments in AI, its plans to revive its search business, its Cloud computing business along with its huge penetration in the enterprise software space makes it a suitable buy and hold stock for the next 5 to 10 years. In May last year, Bernstein said that AI could help Microsoft Corp (NASDAQ:MSFT) double its Cloud revenue. Recently, Jim Cramer said in a program that Microsoft Corp (NASDAQ:MSFT) remains the “undisputed leader” in AI.
Wedbush’s Dan Ives recently said Microsoft Corp’s (NASDAQ:MSFT) “iPhone moment” has arrived, referring to Copilot. Ives increased his price target on MSFT stock to $450 from $425.
“Over the next 3 years, over 60% of its MSFT installed base will ultimately be on this AI functionality for the enterprise/ commercial which changes the landscape for Nadella & Co going forward,” Ives said.
The analyst thinks Copilot could add $25 billion to Microsoft Corp’s (NASDAQ:MSFT) top line by 2025.
In its fourth quarter 2023 investor letter, ClearBridge Dividend Strategy stated the following regarding Microsoft Corporation (NASDAQ:MSFT):
“Microsoft Corporation (NASDAQ:MSFT) is the largest holding in our portfolio. Given its partnership with OpenAI and leading position in the cloud, Microsoft is well-positioned to profit from the boom in AI. However, due to Microsoft’s tremendous scale and diversification, the company is not dependent upon AI for its success. Microsoft’s diverse portfolio of software and cloud offerings ensures the company will thrive even if the next hot thing, like AI, fizzles out. In this way, Microsoft is emblematic of our broader investing approach. We seek to benefit from powerful trends, but we do so with an eye toward managing risk and limiting downside in case the future turns out to be less rosy than hoped for.”
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