High-quality companies with durable earnings growth can be wealth-building powerhouses that lift a portfolio over time. Most people who retire with high net worths have likely enjoyed stellar returns from their stock investments.
Importantly, investors shouldn’t bet too heavily on one horse — a diversified portfolio is critical to managing your risks. That said, there are some stocks that you can buy and hold for the next decade that could make a notable difference in the growth of your nest egg.
Here are two such names. Consider investing $10,000 into each of these stocks, and they could help you retire a millionaire.
Amazon will continue enjoying e-commerce and cloud tailwinds
What a business Amazon (NASDAQ: AMZN) is. The company started by selling books online in the mid-1990s and is today’s dominant e-commerce retailer, with a roughly 38% market share in the United States. Perhaps even more impressive is that Amazon followed up this whopper of an opening act with Amazon Web Services, which has become the world’s largest cloud infrastructure platform with a 31% global market share.
The company has been a very successful long-term investment. A $10,000 investment into Amazon stock in its early days would be worth over $18 million now. Of course, Amazon is now worth nearly $2 trillion, so there’s just no room in the global economy for it to increase in size and value by that magnitude again. However, the company does still have enough upside to justify a $10,000 investment today. Amazon’s bread-and-butter segments, e-commerce and cloud computing, have plenty of room to grow. E-commerce is still just 16% of retail in America. Meanwhile, the surge in artificial intelligence investments worldwide should mean big things for Amazon and other cloud platforms.
A massive company like Amazon must also be trading at the right valuation in order to have the potential to generate additional big returns. Let’s check that box off. If you value Amazon based on its operating cash flow — in other words, the cash it generates from its normal business activities before investing in itself in pursuit of future growth — shares are about as cheap as they’ve been in the past decade (as the chart above shows). This winner is poised to keep winning, so don’t shy away from including it in your long-term investment plans.
Netflix has proven itself in the growing streaming industry
It’s not easy breaking new ground or creating new industries. Companies that try to are often beset by a lot of doubters, and Netflix (NASDAQ: NFLX) has definitely had its share of them over the years. However, the streaming pioneer is the global king of streaming today, with over 270 million paid subscriptions as of the end of the first quarter. Memberships grew 16% year over year in Q1, which shows there is still plenty of room for it to grow as people worldwide steadily shift from cable television to streaming.
And when a company becomes as large as Netflix has, there are plenty of tricks it can use to squeeze earnings growth out of the business. In addition to simply growing its subscriber base, Netflix can raise prices, crack down on password sharing (which has been hugely successful), and branch out into new content and media formats. The company has steadily waded into live sports content and is testing out video games now that technology has advanced enough for it to stream games through the cloud.
Netflix shares have handily outperformed the broader market for the past decade. But the company seems poised to deliver more years of strong earnings growth. Shares trade at 35 times earnings today, but analysts believe that its profits will grow at an annualized rate of more than 28% for the next three to five years. That should make the stock attractive for investors.
Should you invest $1,000 in Amazon right now?
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Netflix. The Motley Fool has a disclosure policy.
Want $1 Million in Retirement? Investing $10,000 in Each of These 2 Stocks for the Long Term Could Help You on Your Way was originally published by The Motley Fool
Ex-Amazon execs Paul Kent, Andrew Hammond, and Blake Gorman have launched Deep Media, a specialist consultancy that aims to help Australian and New Zealand brands get more from advertising on Amazon.
Kent, Hammond, and Gorman were all involved with the launch of Amazon’s ad tech capabilities in Australia and have experience leading media and technology organisations, including Nine Entertainment, OMG, and InMobi.
Kent, managing director and co-founder of Deep Media, explained: “With Deep Media, we’re on a mission to unlock the exciting potential of Amazon’s advertising solutions by offering a fully managed service for both advertisers and agencies.
“Our service handles campaign setup, management and insights, ensuring businesses of any size and budget can tap into Amazon’s class-leading technology.
“We’re proud to join the Amazon partner network and bring Deep Media to the Australian and New Zealand markets. Our team’s unique expertise ensures that Amazon advertising can become a strategic asset for any business.”
Hammond, Deep Media’s chief commercial officer and co-founder, added: “Our primary goal is to empower independent agencies and advertisers in harnessing the power of Amazon solutions.
“With access to first-party data, exclusive inventory, and over 17 million unique customers visiting Amazon, IMDB and Twitch each month, the potential for any brand to expand its market share is undeniable.”
Gorman, part of the Deep Media leadership team, said: “With so many new privacy regulations and browser changes depreciating the value of third-party data, Amazon is uniquely positioned by allowing brands the unique opportunity to stay ahead of the curve through its ability to target and measure against first-party data.”
Recent research released by global eCommerce accelerator Pattern revealed Amazon is now the dominant marketplace retailer in Australia, with 75.2 million average monthly visits and 59% growth in product searches in 2023.
See also: Nick Thomas leaves EssenceMediacom for new role at Amazon Ads
![The Amazon announcement follows a multi-billion-dollar investment in Southeast Asia by Microsoft (MARCO BERTORELLO)](https://ukpropertyguides.com/wp-content/uploads/2024/05/Amazon-says-will-invest-9-billion-in-Singapore.jpeg)
Amazon said Tuesday it would invest US$9 billion in Singapore over the next four years to expand its cloud computing capabilities in the city.
The announcement comes after fellow tech titan Microsoft unveiled billions of dollars of investment in the same sectors in Southeast Asia last week as firms look to take advantage of growing demand in the region.
Amazon said the figure doubles its investment in the city-state and will help it meet growing demand for cloud services and adopt artificial intelligence.
“AWS (Amazon Web Services) is doubling down on its cloud infrastructure investments in Singapore from 2024 to 2028 to support customer demand, and help reinforce Singapore’s status as an attractive regional innovation launchpad…,” Priscilla Chong, Country Manager of Singapore for AWS, said.
Amazon said its investment will support some 12,000 jobs in Singaporean businesses each year.
It is also partnering with the Singapore government to help local businesses accelerate the adoption of AI.
The e-commerce titan last week said profit in the first three months of 2024 tripled as its cloud, ads, and retail businesses thrived.
The company founded by Jeff Bezos is also testing an AI chatbot named Rufus that provides shopping tips to US mobile app customers.
Meanwhile, generative AI features for sellers help them create product listings.
The company also plans to invest billions of dollars in AWS datacenters in Mexico, Saudi Arabia and the United States in coming years, according to the earnings release last week.
Tech giants such as Amazon and Microsoft have been investing more in Southeast Asia recently.
Microsoft pledged US$2.2 billion in artificial intelligence and cloud computing investment in Malaysia on Thursday.
That announcement came after tech chief Satya Nadella unveiled a US$1.7 bn investment in Indonesia, as well as Thailand’s first data centre region.
The tiny but wealthy and infrastructure-rich Singapore has become a business and technology centre in Southeast Asia, further solidifying its status after the pandemic.
skc/dan