One of the simplest and most dependable ways to make money in the stock market is to buy and hold great companies for a long, long time. This strategy not only helps investors avoid sweating over their portfolios, but it also helps them take advantage of the power of compounding, which can lead to big gains in the long run.

Selecting the right companies with strong businesses and prospects is critical to the success of this investment strategy, which is why we'll take a closer look at Applied Materials (AMAT -0.36%) and Chewy (CHWY -1.77%). Let's see why these companies could be solid picks for investors looking to score big gains over the long run.

Finger pressing the buy button on a keyboard.

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1. Applied Materials

There's a shortage of semiconductors around the world, and Applied Materials is one of the companies that can help bring more supply into the market. Applied Materials supplies semiconductor manufacturing equipment to foundries, which then use it to fabricate chips and circuits.

Not surprisingly, Applied Materials has witnessed a sharp acceleration in demand for its equipment over the past year, reflected in its terrific results quarter after quarter. The company delivered record revenue and non-GAAP earnings for the first quarter of fiscal 2021. Revenue shot up 24% year over year to $5.16 billion, while adjusted earnings jumped 42% to $1.39 per share.

Applied Materials is on track to sustain such impressive growth for a long time to come as the company is witnessing a continued spike in demand for chips across different verticals. For 2021, Applied Materials sees higher capital spending in the memory market and increased investment in foundry capacity. A closer look at end-market developments also suggests the same.

Taiwan Semiconductor Manufacturing, one of Applied Materials' key customers, is planning to spend $100 billion to improve its chip-manufacturing capacity over the next three years. Taiwan Semiconductor's massive outlay will not only go toward alleviating the global chip-supply crunch but also prepare the company to make chips that'll go toward powering new technologies.

Meanwhile, Intel and Samsung are also going to spend big on foundry capacity improvements. Chipzilla will be spending $20 billion at two Arizona factories, while Samsung plans to spend $100 billion over the next decade to boost its semiconductor manufacturing business. Thanks to such investments, global semiconductor equipment sales are expected to exceed $200 billion a year in the early 2030s, per a third-party estimate, which would be a sizable increase over last-year's $69 billion of spending.

All of this supports the potential for Applied Materials to consistently grow its revenue and earnings long term. As such, the stock looks like an ideal candidate for those with an extended investment horizon, and now would be a great time to buy as shares trade at just 22 times forward earnings.

2. Chewy

The U.S. online pet products and supplies industry is in its early phases of growth, and Chewy is turning into one of the best bets to take advantage of this fast-growing market. The online pet products retailer finished fiscal 2020 with revenue up 47% to $7.15 billion as pet parents switched to online shopping amid the pandemic.

The good news is Chewy has kept up its high pace of growth even after the early phases of reopening. Revenue increased 51% year over year in the fiscal fourth quarter that ended on Jan. 31, 2021 -- this was the first time quarterly sales exceeded the $2 billion mark. The company took just two years to reach this milestone after taking over seven years to report its first $1 billion quarter.

This is proof of the huge uptick in the number of pet owners shopping online, and Chewy saw a 43% increase in its active customer base last year to 19.2 million. Additionally, its customers are spending more money as the net sales per active customer increased 3.3% year over year at the end of fiscal 2020 to $372. The company should witness a continuous expansion in both of these metrics over the long run.

As stated by CEO Sumit Singh on the latest earnings call:

Online penetration rates in the retail food and supplies category are estimated to have grown from 7% in 2015 to 30% in 2020 and are expected to reach 53% by 2025, which is in line with the current online penetration rate of categories like books and electronics. Further, as we are observing, healthcare and services have already begun to shift online, and we believe this trend will continue and accelerate.

More importantly, Chewy notes the shift toward online purchases in the pet products industry in the wake of the pandemic is "durable and largely permanent." The American Pet Products Association (APPA) estimates the pet industry in the U.S. will see nearly $110 billion in revenue this year, up from $104 billion last year. This indicates that Chewy is scratching the surface of a very large opportunity that will keep growing over the years.

Finally, the company has established a leadership position in the U.S. online pet products market. According to industry data provider Packaged Facts, online pet product sales were on track to jump $3.9 billion last year.

Chewy increased its total revenue by $2.3 billion in fiscal 2020, meaning it was able to claim approximately 60% of the additional sales. The company also increased its initial wallet share of new customers in 2020 by 12% over 2019 levels.

An increasingly dominant role in the online pet products retail space and the expansion of the market overall should fuel this growth stock's upside long term, making it an ideal choice for investors looking to employ a buy-and-hold strategy.