A group of large technology companies considered the “Magnificent Seven” have largely defined investing success over the past decade. If you owned one of these stocks, you would probably be pleased with the return on your investment.
While many of the Magnificent Seven stocks are now worth over a trillion dollars and are unlikely to repeat their same growth over the next 10 years, some can still make you richer over time.
Here are my top three picks from this group to buy and hold indefinitely.
1. Amazon
Almost everyone knows about the e-commerce giant Amazon (NASDAQ:AMZN), which dominates online shopping and represents 38% of the American market. Many people may even know that Amazon operates the world’s first cloud platform, AWS, which today forms the virtual foundation of the Internet. Fewer people probably realize that Amazon has become a formidable advertising agency. Its advertising business grew 24% year-over-year in the first quarter and is expected to reach $45. billion This year.
No company in history can be as good as Amazon at finding ways to enter and dominate new markets. How does a company go from selling books online to selling everything to over 200 million Prime subscribers? How to start an online bookstore and beat technology-focused competitors to become the leading cloud platform? Now, investors are starting to understand just how big Amazon’s advertising business is growing. It’s truly remarkable.
This is all the more true as all these markets have years of growth ahead of them. E-commerce still only represents 22% of total retail commerce in the United States. Amazon Web Services continues to experience double-digit growth; it just increased 17% year-over-year in the first quarter, and this trend is unlikely to slow as artificial intelligence (AI) takes off. Amazon’s advertising business is now its fastest-growing segment, so it likely still has years of expansion ahead of it. Buy and keep Amazon. It’s boring but it still delivers what it promises.
2. Metaplatforms
Everyone seems to have social media, but Metaplatforms (NASDAQ:META) continues to grow its user base. Over the past three months, the company has accumulated an additional 50 million daily active users across its family of apps: Facebook, Instagram, WhatsApp and Threads. That now represents 3.24 billion people logging in every day. Meta makes money (a lot) by selling digital ads to businesses. It’s also remarkably lucrative; about $0.35 of every dollar of revenue constitutes free cash flow. Meta’s trailing 12 month revenue is $142 billion, which shows you how much money that is.
Meta I just started paying a dividend and bought back a ton of stock to help boost earnings per share even further. This financial engineering alone could make you richer in the long run. Investors believe the company’s earnings can grow an average of 19% annually over the next three to five years. A slowdown is therefore not to be expected.
Finally, Meta CEO Mark Zuckerberg is still only in his 40s, making him young enough to continue running the company for decades if he chooses. Zuckerberg pushed the…
