Leading hedge funds worldwide are investing heavily in stocks poised to potentially triple in value over the next decade. Discover which companies are capturing their attention and why they may outperform Nvidia
These are companies that have long been riding the mega trends of cloud computing and global digitalization but still offer huge opportunities for structural growth.
For this reason, hedge funds around the world continue to accumulate these stocks.
With solid financial foundations, market leadership, and business strategies, they are well positioned to take advantage of these tailwinds and could guarantee superior performance to the company of chips and GPUs for artificial intelligence, whose valuation (equal to about 33 times sales in the last 12 months) incorporates a good part of future expectations.
This does not mean that Nvidia is a bad investment, but rather that its exponential growth could slow down compared to the past. In this scenario, therefore, it is necessary to select other companies with better growth prospects, ready to monetize more rapidly growing sectors such as cloud computing and global e-commerce.
Let’s find out which are these companies and why they could become the new protagonists of the stock market in the next ten years.
1) Amazon
Amazon is one of the stocks on the list to compete with Nvidia thanks to its leadership in two strategic sectors: e-commerce and cloud computing, both with enormous growth potential in the long term. With a market capitalization of over 2.3 trillion dollars, the technology giant boasts a market share in e-commerce that exceeds that of its ten main competitors combined. Despite this dominant position, the growth potential is enormous, considering that currently only 16% of retail sales in the United States are made online and that percentage is set to grow significantly in the coming years.
But the real driver of Amazon’s future growth is Amazon Web Services (AWS), its cloud computing division. Despite strong competition from Microsoft and Google, AWS continues to grow at a rapid pace, benefiting from a cloud market that could triple by 2032. AWS, the most profitable part of Amazon’s business, generates double-digit profits and is a key pillar of the company’s prospects. If Amazon continues to exploit these advantages, it could become the first company in the world with a market capitalization of $5 trillion.
Over the next 12 months, analysts at Evercore ISI expect a target price of $195 while those at BofA have indicated a target price of $230, not far from the current $222. However, some experts believe that Amazon’s price could reach $530 by 2035, with a potential upside of 138% from the current price.
2) Alphabet
Alphabet, the holding company that controls Google, has a market capitalization of almost 2.4 trillion dollars and is already among the most profitable companies in the world, with a net margin of 28%. Despite its impressive performance, Alphabet’s valuation is still relatively cheap: the stock trades at about 23 times forward earnings, making it the cheapest of the "Magnificent Seven" of US technology.
Google’s most profitable division, which includes Search, YouTube and Gmail, is benefiting from a recovery in advertising revenue and a favorable macroeconomic environment, capable of supporting further growth. In addition, Google competes directly with AWS in the cloud market and could benefit from the explosive growth of this technology. In the third quarter of 2024, $88.3 billion in revenue, 11.4 billion came from the cloud division.
Alphabet is also supported by strong financial flexibility. With more than $93 billion in cash and annual net profit of more than $100 billion, the company can easily reinvest to innovate or return capital to shareholders. This financial strength, combined with a growing market, makes Alphabet one of the most promising stocks of the next decade.
According to experts, Alphabet is the best stock to buy for the long term, with the potential for upside of more than 200% by 2035.
| DISCLAIMER The information and considerations contained in this article should not be used as the sole or primary basis for making investment decisions. The reader maintains full freedom in his investment choices and full responsibility in making them, since he alone knows his risk propensity and his time horizon. The information contained in the article is provided for information purposes only and its disclosure does not constitute and is not to be considered an offer or solicitation to the public savings. |
Original article published on Money.it Italy 2025-01-10 07:43:00. Original title: 2 azioni pronte a battere Nvidia con target a +207% e +138% entro il 2035
