For investors looking to build life-changing wealth, the best way to do so is often through a simple buy-and-hold strategy. For example, if you invested $10,000 in Microsoft 10 years ago you would now have over $97,000 – almost a 10x return on your money. If you can find high-quality businesses and hold them relentlessly, even through tough times and recessions, you have the potential to build immense wealth.
You could employ this strategy today, launching a potentially fruitful journey. Nvidia (NASDAQ: NVDA), Doximity (NYSE: DOCS)and fuboTV (NYSE: FUBO) have extremely large addressable markets and strong competitive advantages over their competitors, and I believe these businesses could thrive over the next 13 years.
As the market leader in high-performance graphics processing units (GPUs), Nvidia’s chips are used in almost everything, including games, fully autonomous vehicles, data centers, and even building the Metaverse. This broad option and its leadership in the space helped the company generate $7.1 billion in third-quarter revenue, net income of $2.5 billion, and free cash flow. of $1.3 billion.
Chips are in huge demand right now, and that demand will only increase over the next decade as more and more artificial intelligence, data and other new technologies are entering the world. The majority of these systems need hundreds of chips to operate, and Nvidia leads the pack in producing these chips, rapidly gaining market share. In fiscal year 2019 (calendar year 2018), the company had revenue of $11.7 billion, but this fiscal year the company expects to generate $26.7 billion, which is a 128% growth over this period.
This growth, however, comes at a high price. Nvidia shares are trading at 69 times earnings and 78 times free cash flow, which are extremely high multiples. Nvidia’s market capitalization is currently over $600 billion, so 10Xing over the next 13 years is no easy task. However, given the company’s dominance in the past and how Nvidia’s chips are likely to play a major role in the future, the company has the potential to deliver incredible returns over the next decade.
The data center market is expected to be worth $65 billion by 2026 and the gaming GPU market is expected to be worth $54 billion by 2025. Since Nvidia has a dominant market share in these two sectors, I don’t wouldn’t be surprised if Nvidia could continue to dominate these sectors. industries over the next few years, because it becomes a staple of technology.
Doximity has become the primary social network and work platform for medical professionals, giving them the ability to provide telehealth services, talk with patients as well as other physicians, and learn about new drugs and practices in their field. This has made Doximity the all-in-one app medical professionals need for their working lives. As a result, more than 80% of physicians and 90% of medical students are on Doximity.
Like Nvidia, Doximity is trading at a high multiple of 31 times sales – even after the company fell 58% from its all-time high. However, this extremely high multiple could be justified. Doximity has a dominant market share in the space, but the company is growing fast and profitable. In its most recent quarter, the company grew revenue 76% year-over-year to $79 million, and 45% of that turned into net profit for the quarter. .
Doximity has little room for future growth in terms of adding users to its platform, but growing the number of advertisers on the platform – where Doximity derives its revenue – has a lot of potential. for the future. Drugmakers and healthcare companies looking to hire healthcare professionals advertise on Doximity, and the company estimates it has a $7.3 billion market opportunity by increasing simply the number of advertisers on the platform. With a total market worth $18.5 billion, the company has plenty of room to thrive over the next decade given that he expects just $327 million in full-year revenue.
One of the biggest reasons consumers still have their cable television is the inability to stream live sports or news on popular services like netflix, but fubo is trying to change that. It’s becoming a pure gaming service that specifically focuses on streaming live sports of all kinds, and it’s seeing rapid adoption because of that. In Q3 2021, the company had 945,000 subscribers, representing 108% year-over-year growth.
It’s small, especially compared to others continuous actions like Netflix, which has nearly 222 million subscribers worldwide. Despite this great opportunity, the company is not appreciated for its future success. Fubo trades at just 2.4 times sales – a multiple low, especially for a company that is enjoying triple-digit growth. That’s little compared to streaming services like Netflix, which trades at 5.6x sales despite slower growth.
In a Pew Research poll, 56% of Americans said they have cable TV, so the cord-cutting trend is still in full swing. If fubo can become the primary streaming service these Americans turn to for their live TV, then fubo has an incredible opportunity to expand their customer base. With less than a million users today, fubo is trying to attract around 100 million consumers, which makes its market opportunity huge, to say the least. This huge growth potential could see fubo more than 10x if it successfully enters this market, and as one of the only providers to focus on live TV, fubo looks poised to do it, that’s why I think it can be multiplied by 10 by 2035.
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Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a board member of The Motley Fool. Jamie Louko owns fuboTV, Inc. The Motley Fool owns and recommends Doximity, Inc., Microsoft, Netflix, Nvidia and fuboTV, Inc. The Motley Fool owns a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.