These three tech stocks look like reliable winners over the long term.
$1 million may not be the amount it used to be, but it's still a worthy retirement goal. If you have supplemental income such as Social Security or a pension, $1 million could be enough money for a comfortable retirement.
Artificial intelligence (AI) stocks have been getting a lot of attention from investors lately, but there are plenty of opportunities beyond AI for investors looking to expand their portfolios. Some stocks look poised to turn $250,000 into $1 million.
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1. Trade Desk
trade desk (TTD 1.67%) is the leading independent demand-side platform (DSP) in the digital advertising industry. Advertising agencies and brands rely on The Trade Desk's cloud-based self-service platform to help manage and optimize their advertising campaigns. The business has been a huge success, with the stock price up more than 2,000% since its initial public offering (IPO) in 2016.
Unlike many growth stocks, The Trade Desk has been able to achieve both rapid revenue growth and solid profits. For example, fourth quarter revenue increased 23% to $606 million, and adjusted net income was reported to be $207 million.
Looking to the next few years, the company should continue to grow as the digital advertising market expands through channels such as connected TV, retail media, and new technologies. The company also appears poised to strengthen its leadership position. It uses Unified ID 2.0, a protocol that will replace third-party cookies when Google deprecates them in Chrome, and deep learning algorithms throughout the media buying process to provide visibility, insight, and information. Thanks to Kokai, a new AI platform that improves Advertiser return on investment (ROI).
The Trade Desk introduced Kokai last year, but CEO Jeff Green said the impact on the business and its customers will start to be felt this year. This could drive a significant growth cycle for The Trade Desk in the coming years. If the company can continue to grow more than 20% in sales and bottom line profits, it could easily quadruple over the next 10 years.
2. Roku
Like a trade desk Roku (Roku -10.29%) is a digital advertising stock with great growth potential. Roku has struggled since the pandemic as advertisers cut back on spending in anticipation of a recession that never came. Although the company's revenue growth has improved, spending from its core media and entertainment sector remains lagging.
However, this should change in the coming years as traditional media companies understand the streaming business and viewers continue to migrate from traditional pay TV channels to streaming. Although performance has been volatile, demand and consumption metrics remain strong, with active accounts and viewing time rapidly increasing.
Roku is fending off competition from much larger technology giants, continuing to innovate with its own TV sets, expanding into new countries, and beefing up its original content lineup. Meanwhile, the company will benefit from increased streaming ad subscriptions. Netflix and Amazon We recently started advertising space.
Roku stock is down more than 80% from its peak during the pandemic and nearly 50% from its high last November. At current levels, it shouldn't take long for the stock to deliver solid returns to investors, especially if the business model reaches an inflection point.
3. MercadoLibre
finally, mercadolibre (Meri 3.09%) It also looks like a great stock to help turn $250,000 into $1 million. This Latin American e-commerce company has built an impressive network with competitive advantages reminiscent of Amazon.
The company's e-commerce business includes both first-party direct sales operations and third-party marketplaces. The company also has a large fintech operation in Mercado Pago, further entrenching itself with both retailers and consumers. The company operates its own logistics operations in Mercado Envios, providing a new source of revenue from e-commerce.
MercadoLibre also leverages its core business into high-margin revenue streams such as advertising and credit.
What was also impressive about the company was its sharp revenue growth at a time when most e-commerce companies were suffering from a post-pandemic hangover. Revenues in the fourth quarter rose 83% on a currency-neutral basis due to strong growth in e-commerce and digital payments. On the other hand, the company's profit margin increased by shifting its focus to high-margin businesses.
If MercadoLibre continues to grow rapidly over the past decade, it shouldn't be difficult for the stock to quadruple and go from $250,000 to $1 million.
John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool's board of directors. Jeremy Bowman has held positions at Amazon, MercadoLibre, Netflix, Roku, and The Trade Desk. The Motley Fool has positions in and recommends Amazon, MercadoLibre, Netflix, Roku, and The Trade Desk. The Motley Fool has a disclosure policy.
