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3 Growth Stocks to Buy and Hold for the Next 10 Years
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Today’s episode of Full Court Finance at Zacks explores the stock market’s surge to fresh highs following the presidential election. The episode then dives into three growth-heavy Zacks Rank #1 (Strong Buy) stocks—Shopify, Nu Holdings, and Vertiv—to consider buying and holding for the next 10 years.
See the Zacks Earnings Calendar to stay ahead of market-making news.
The market roared to all-time highs on Wednesday following the presidential election. The Nasdaq and the S&P 500 added to their mid-week gains on Thursday as Wall Street celebrates the end of uncertainty and the likelihood of lower corporate taxes, less red tape, and economic growth-focused efforts during a second Trump term.
It is also worth remembering that partisan politics does not drive the stock market. For instance, average annual stock market returns during the Trump and Obama administrations—which included periods of unified and divided governments—were almost the same: 16.0% and 16.3%, respectively.
Plus, the bull market is only two years old (bull markets have lasted roughly five and a half years on average), and the November-January stretch is the best three-month period for Wall Street dating back to 1971.
Given this backdrop, investors likely want to add exposure to the stock market in November. So let’s explore the three growth-heavy Zacks Rank #1 (Strong Buy) stocks investors might want to buy and hold for the next decade.
Is Shopify a Must-Buy Growth Tech Stock Trading 50% Below Its Highs?
Shopify Inc. (SHOP - Free Report) shares have blown away Amazon and the Tech sector since its 2015 IPO and over the past two years. Yet SHOP trades 50% below its all-time highs heading into its Q3 2024 earnings report on November 12.
Shopify grew its revenue from $1 billion in 2018 to $7 billion in 2023 by expanding its offerings and its reach across entrepreneurs, small and mid-businesses, and larger enterprises.
Shopify helps its clients with everything from website creation and design to sales, marketing, payments, automation, inventory, shipping, and more across digital commerce and brick and mortar.
Shopify is thriving in an Amazon-dominated e-commerce industry by catering to sellers and businesses, while Amazon (AMZN - Free Report) is ruthlessly focused on consumers.
Shopify raised its prices in 2023 (by roughly 30% for its various plans) for the first time in over a decade to help make up for slowing sales growth. Shopify is also prioritizing streamlining efforts and profits.
Image Source: Zacks Investment Research
Shopify is projected to grow its sales by 22% in 2024 and 20% in 2025 to surge from $7 billion last year to over $10 billion next year. SHOP is expected to boost its adjusted earnings by 51% and 19%, respectively, and its upward EPS revisions help it land a Zacks Rank #1 (Strong Buy). SHOP also has a stellar balance sheet.
Shopify shares have climbed roughly 2,900% since its 2015 IPO, blowing away Amazon’s 900% and Tech’s 300%. Shopify trades roughly 50% below its 2021 peaks despite soaring 160% in the last two years.
Shopify retook its 21-day moving average this week SHOP stock is back above its 200-week moving average.
SHOP’s sky-high valuation is holding the stock back for now. But SHOP’s 2.3 PEG ratio, which factors in its long-term earnings growth outlook, marks an 84% discount to its recent highs and not too large of a premium compared to the Zacks Tech sector (1.6).
Buy NU as a Cheap Tech Stock Under $20 for Big Long-Term Upside
Nu Holdings Ltd. (NU - Free Report) stock has ripped 83% higher in 2024 to double its highly-ranked Technology Services industry as part of a 200% surge in the last two years. Yet, NU shares trade for around $15 per share. NU found support at its 21-day heading into its Q3 FY24 earnings release on November 13.
Nu is a digital financial services powerhouse, with a platform that reaches roughly 105 million customers across Brazil, Mexico, and Colombia. The fintech firm has shaken up the banking and financial services sector in large economies with huge populations.
Nu is the largest digital banking platform outside of Asia and the fourth-largest financial institution in Latin America by number of customers. Nu boasts that more than 1 in every 2 Brazilian adults is a customer.
Image Source: Zacks Investment Research
Nu grew its customer base by 25% YoY last quarter. The company is projected to grow its adjusted earnings by 71% in 2024 and 52% in 2025 after expanding its bottom line from $0.02 to $0.24 between 2022 and 2023.
Nu’s revenue is expected to jump 49% and 34%, respectively to double its revenue from $8 billion last year to $16 billion in FY25.
Image Source: Zacks Investment Research
NU’s upward earnings revisions earn it a Zacks Rank #1 (Strong Buy). The stock is also trading at a 55% discount to highs at 25.4X forward earnings, which marks 40% value compared to its industry.
Plus, its 0.5 PEG ratio (factoring in its earnings growth outlook) represents a 200% discount to its industry even though NU stock has crushed its industry during the last two years.
Why Vertiv is a Great Long-Term AI Stock to Buy
Vertiv Holdings Co (VRT - Free Report) is an artificial intelligence (AI) stock that’s soared 155% YTD and 1,100% in the past five years, blowing away the Tech sector during both stretches.
Vertiv operates in the background of big tech and AI, supporting the constant expansion and the day-to-day operations of data centers, communication networks, and beyond. Vertiv’s hardware, software, analytics, and ongoing services portfolio is focused on power, cooling, and IT infrastructure.
Vertiv helps the computing power needed to drive the modern economy (data centers, AI, cryptocurrencies, and beyond) run as smoothly as possible 24/7. VRT has partnered with Nvidia (NVDA - Free Report) to figure out the best ways to solve data center efficiency and cooling challenges.
Image Source: Zacks Investment Research
Vertiv posted another beat-and-raise quarter in late October to help it earn a Zacks Rank #1 (Strong Buy). VRT is projected to grow its adjusted EPS by 52% in FY24 and 30% in FY25 following a 230% expansion last year. Vertiv is projected to grow its revenue by 14% in 2024 and 16% next year.
VRT trades at a 10% discount to its highs at 35.6X forward 12-month earnings even though its stock price just ripped to records. Vertiv also offers 7% value compared to its highly-ranked Computers - IT Services industry despite its huge outperformance.
Vertiv has climbed 350% in the past three years to blow away its industry’s 1% decline. On to of all that, 12 out of 12 brokerage recommendations Zacks has are “Strong Buys.”
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3 Growth Stocks to Buy and Hold for the Next 10 Years
Today’s episode of Full Court Finance at Zacks explores the stock market’s surge to fresh highs following the presidential election. The episode then dives into three growth-heavy Zacks Rank #1 (Strong Buy) stocks—Shopify, Nu Holdings, and Vertiv—to consider buying and holding for the next 10 years.
See the Zacks Earnings Calendar to stay ahead of market-making news.
The market roared to all-time highs on Wednesday following the presidential election. The Nasdaq and the S&P 500 added to their mid-week gains on Thursday as Wall Street celebrates the end of uncertainty and the likelihood of lower corporate taxes, less red tape, and economic growth-focused efforts during a second Trump term.
It is also worth remembering that partisan politics does not drive the stock market. For instance, average annual stock market returns during the Trump and Obama administrations—which included periods of unified and divided governments—were almost the same: 16.0% and 16.3%, respectively.
Plus, the bull market is only two years old (bull markets have lasted roughly five and a half years on average), and the November-January stretch is the best three-month period for Wall Street dating back to 1971.
Given this backdrop, investors likely want to add exposure to the stock market in November. So let’s explore the three growth-heavy Zacks Rank #1 (Strong Buy) stocks investors might want to buy and hold for the next decade.
Is Shopify a Must-Buy Growth Tech Stock Trading 50% Below Its Highs?
Shopify Inc. (SHOP - Free Report) shares have blown away Amazon and the Tech sector since its 2015 IPO and over the past two years. Yet SHOP trades 50% below its all-time highs heading into its Q3 2024 earnings report on November 12.
Shopify grew its revenue from $1 billion in 2018 to $7 billion in 2023 by expanding its offerings and its reach across entrepreneurs, small and mid-businesses, and larger enterprises.
Shopify helps its clients with everything from website creation and design to sales, marketing, payments, automation, inventory, shipping, and more across digital commerce and brick and mortar.
Shopify is thriving in an Amazon-dominated e-commerce industry by catering to sellers and businesses, while Amazon (AMZN - Free Report) is ruthlessly focused on consumers.
Shopify raised its prices in 2023 (by roughly 30% for its various plans) for the first time in over a decade to help make up for slowing sales growth. Shopify is also prioritizing streamlining efforts and profits.
Image Source: Zacks Investment Research
Shopify is projected to grow its sales by 22% in 2024 and 20% in 2025 to surge from $7 billion last year to over $10 billion next year. SHOP is expected to boost its adjusted earnings by 51% and 19%, respectively, and its upward EPS revisions help it land a Zacks Rank #1 (Strong Buy). SHOP also has a stellar balance sheet.
Shopify shares have climbed roughly 2,900% since its 2015 IPO, blowing away Amazon’s 900% and Tech’s 300%. Shopify trades roughly 50% below its 2021 peaks despite soaring 160% in the last two years.
Shopify retook its 21-day moving average this week SHOP stock is back above its 200-week moving average.
SHOP’s sky-high valuation is holding the stock back for now. But SHOP’s 2.3 PEG ratio, which factors in its long-term earnings growth outlook, marks an 84% discount to its recent highs and not too large of a premium compared to the Zacks Tech sector (1.6).
Buy NU as a Cheap Tech Stock Under $20 for Big Long-Term Upside
Nu Holdings Ltd. (NU - Free Report) stock has ripped 83% higher in 2024 to double its highly-ranked Technology Services industry as part of a 200% surge in the last two years. Yet, NU shares trade for around $15 per share. NU found support at its 21-day heading into its Q3 FY24 earnings release on November 13.
Nu is a digital financial services powerhouse, with a platform that reaches roughly 105 million customers across Brazil, Mexico, and Colombia. The fintech firm has shaken up the banking and financial services sector in large economies with huge populations.
Nu is the largest digital banking platform outside of Asia and the fourth-largest financial institution in Latin America by number of customers. Nu boasts that more than 1 in every 2 Brazilian adults is a customer.
Image Source: Zacks Investment Research
Nu grew its customer base by 25% YoY last quarter. The company is projected to grow its adjusted earnings by 71% in 2024 and 52% in 2025 after expanding its bottom line from $0.02 to $0.24 between 2022 and 2023.
Nu’s revenue is expected to jump 49% and 34%, respectively to double its revenue from $8 billion last year to $16 billion in FY25.
Image Source: Zacks Investment Research
NU’s upward earnings revisions earn it a Zacks Rank #1 (Strong Buy). The stock is also trading at a 55% discount to highs at 25.4X forward earnings, which marks 40% value compared to its industry.
Plus, its 0.5 PEG ratio (factoring in its earnings growth outlook) represents a 200% discount to its industry even though NU stock has crushed its industry during the last two years.
Why Vertiv is a Great Long-Term AI Stock to Buy
Vertiv Holdings Co (VRT - Free Report) is an artificial intelligence (AI) stock that’s soared 155% YTD and 1,100% in the past five years, blowing away the Tech sector during both stretches.
Vertiv operates in the background of big tech and AI, supporting the constant expansion and the day-to-day operations of data centers, communication networks, and beyond. Vertiv’s hardware, software, analytics, and ongoing services portfolio is focused on power, cooling, and IT infrastructure.
Vertiv helps the computing power needed to drive the modern economy (data centers, AI, cryptocurrencies, and beyond) run as smoothly as possible 24/7. VRT has partnered with Nvidia (NVDA - Free Report) to figure out the best ways to solve data center efficiency and cooling challenges.
Image Source: Zacks Investment Research
Vertiv posted another beat-and-raise quarter in late October to help it earn a Zacks Rank #1 (Strong Buy). VRT is projected to grow its adjusted EPS by 52% in FY24 and 30% in FY25 following a 230% expansion last year. Vertiv is projected to grow its revenue by 14% in 2024 and 16% next year.
VRT trades at a 10% discount to its highs at 35.6X forward 12-month earnings even though its stock price just ripped to records. Vertiv also offers 7% value compared to its highly-ranked Computers - IT Services industry despite its huge outperformance.
Vertiv has climbed 350% in the past three years to blow away its industry’s 1% decline. On to of all that, 12 out of 12 brokerage recommendations Zacks has are “Strong Buys.”