Wishing will not bring riches. -- Napolean Hill
This quote from self-help author Napolean Hill is (pardon the pun) right on the money. You have to do something other than wish for it in order to become rich. But what something should you do? One way to achieve wealth is by buying stocks.
Of course, the trick is that you have to pick stocks that will actually make you a lot of money. That's easier said than done. However, I think that NVIDIA (NASDAQ:NVDA), Welltower (NYSE:WELL), and Novavax (NASDAQ:NVAX) are three stocks that could make investors rich over the long run. Here's why.
There's nothing like being in the right place at the right time to be successful. NVIDIA is definitely in the right place at the right time -- and with the right products. The company's graphics processing units (GPUs) are key components to several high-growth markets.
NVIDIA's initial focus was on gaming. Its GPUs were and still are ideal for graphics-intensive computer games. The chipmaker continues to make over half of its total revenue from gaming. And the market keeps growing rapidly as newer games, especially those in the battle royale genre, such as Fortnite, demand even more processing power.
But NVIDIA's GPUs are also great for artificial intelligence (AI) processing. This presents even greater growth opportunities for the company. NVIDIA's chips are used to power data centers that host AI applications for many of the biggest companies in the world. As the use of AI increases, so will NVIDIA's revenue.
The company is also poised to profit from a specialized use of AI: self-driving cars. NVIDIA thinks that its total addressable market for self-driving cars could be $60 billion by 2035. Considering that the company made only $145 million from its automotive segment in the first quarter, it's easy to see why investors are excited about NVIDIA's prospects in the self-driving car market.
Roughly 10,000 baby boomers will reach the age of 65 every day through 2029. Many of them will choose to downsize and move into retirement communities. As baby boomers get even older, many could require care provided by assisted living facilities and long-term/post-acute care (LTPAC) facilities. Welltower ranks as the largest real estate investment trust (REIT) in the senior healthcare and housing markets.
The American Seniors Housing Association estimates that annual demand for senior housing, including assisted living and memory care and independent living, is growing by around 25,000 units right now. That figure is projected to nearly quadruple before 2030. Just about three-quarters of Welltower's current properties cater to this market.
Welltower isn't just focused on housing, though. Around 17% of the company's properties are outpatient medical clinics. Outpatient visits have been growing at a fast pace as healthcare providers and payers push to give care in the lowest-cost setting.
While Welltower's growth opportunities in senior housing and outpatient medical properties could make investors a lot of money over the next few years, there's also another way the stock can make you rich. Welltower's dividend currently yields nearly 6.5%. Reinvesting those dividends is a smart way to accumulate huge gains over time.
Some investors are content with getting rich slowly. Others want to get there fast. Novavax is a clinical-stage biotech stock that could be attractive to those in the latter category.
Novavax's lead pipeline candidate is its respiratory syncytial virus fusion protein (RSV F) vaccine. The company is evaluating the vaccine in a phase 3 clinical study for maternal immunization of infants. If all goes well with that study, Novavax could submit the RSV F vaccine for regulatory approval by early 2020 and perhaps even a little sooner.
The biotech also has other promising vaccines in its pipeline. Novavax expects to begin a phase 2 study of nanoparticle-based influenza vaccine NanoFlu later this year. It also hopes to advance a combination RSV/influenza vaccine into clinical testing for immunization of older adults.
Market research firm EvaluatePharma projects that Novavax could generate annual revenue topping $2.6 billion by 2024. The biotech's market cap currently stands at a little over $600 million. If Novavax is successful with its clinical development programs, some investors could make their fortunes relatively quickly.
Think and grow rich?
Are these stocks risky? Sure. That's especially the case for Novavax. There's no guarantee that clinical studies of its vaccines will go as hoped. NVIDIA's current dominance in GPUs could be weakened by competition. Rising interest rates could hurt Welltower, which relies on borrowing to fund expansion.
However, I think that buying NVIDIA, Welltower, and Novavax could generate huge returns for investors. But unlike the title of Napolean Hill's best-selling book might seem to imply, you can't simply think and grow rich. You have to take a risk.