Although the stock market offers few guarantees, history is pretty clear about one thing: Long-term investing is a winning proposition.
Since 1950, the widely followed S&P 500 has undergone 38 crashes or corrections of at least 10%. Despite these fairly common moves lower in the market, the benchmark index has eventually put every correction in the rearview mirror and blasted to new all-time highs. When you're invested in high-quality, innovative companies, patience pays off handsomely.
If you have a tidy sum of cash -- say $25,000 -- which is sitting on the sidelines waiting to be invested, the following five unstoppable stocks could be the perfect place to put it to work right now.
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Amazon.com
Even though it's one of the largest companies in the world, there may not be a stock I'm more confident will head higher over the long run than Amazon.com (AMZN -1.11%).
As many of you likely know, Amazon is the leading online retailer in the United States. Back in April, a report from eMarketer pegged its online market share at 40.4%, which is over 33 percentage points higher than the next-closest competitor, Walmart. Despite retail generally producing low margins, Amazon has leaned on its e-commerce popularity to sign up more than 200 million people worldwide to a Prime membership. The fees Amazon collects from these memberships help buoy its retail margins. Plus, it doesn't hurt that Prime members are incented to spend more on the platform to get the most out of their membership.
What you might not know is that Amazon is also the most dominant cloud infrastructure services player. Amazon Web Services (AWS) controls an estimated 32% of the global cloud infrastructure market, according to Canalys. Since AWS generates significantly higher margins than Amazon's other operations, AWS is typically responsible for generating 60% (or more) of the company's operating income despite accounting for only an eighth of its revenue.
With Amazon's operating cash flow set to explode higher in the coming years, a realistic pathway to $10,000 a share exists.
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PubMatic
Another unstoppable stock with an exceptionally bright future is cloud-based advertising technology company PubMatic (PUBM -0.74%).
PubMatic's goal is simple. It aims to optimize the real-time buying and selling of ad space. Unlike some of its peers, PubMatic operates as a sell-side platform (SSP), which is to say that it helps publishers sell their display space to advertisers. Being an SSP comes with a number of advantages that publishers will appreciate. For example, SSPs allow publishers to set price floors for what they're willing to accept for ad space. What's more, they use machine learning to ensure that the best ads, not necessarily the highest-priced ads, are selected for a user. This should help improve engagement and will ensure that publishers and advertisers are getting the best bang for their buck.
Cloud-based programmatic advertising is expected to maintain a double-digit annual growth rate through mid-decade, if not well beyond, as content shifts to mobile and online. As for PubMatic, it expects double-digit annual growth from mobile, digital video, and connected TV/over-the-top programmatic ad spend through 2024.
If you're wondering how a small-cap stock like PubMatic is holding up in a big advertising world, just know that existing publishers spent 30% more in the first quarter than they did in the year-ago period, as measured by the company's net dollar-based retention rate.
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Cresco Labs
The grass could definitely be greener for long-term investors if they put their money to work in high-growth U.S. marijuana stocks. In particular, U.S. multistate operator (MSO) Cresco Labs (CRLBF 6.83%) has all the tools necessary to make investors rich.
Like all publicly traded MSOs, Cresco has a rapidly growing retail presence. It recently opened its 33rd dispensary, and once its acquisition of Cultivate in Massachusetts closes, it'll hold enough licenses to eventually have closer to four dozen retail locations.
While Cresco is focused on a number of potential billion-dollar cannabis markets, the most noteworthy aspect of its retail expansion is its focus on limited-license states. By choosing to operate in markets where retail license issuances is capped (e.g., Illinois and Ohio), Cresco Labs is ensuing that it'll be able to effectively build up its brand and secure a healthy percentage of market share.
Not to be forgotten is the company's industry-leading wholesale operations. As a holder of a cannabis distribution license in California, Cresco is able to place proprietary and third-party pot products into more than 575 dispensaries throughout the Golden State. Wholesale is what gives this company such incredible potential in the U.S. pot industry.
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Redfin
Few things are as unstoppable lately as rising housing prices, which has been a big boon for technology-driven real estate company Redfin (RDFN -6.55%). But even when mortgage rates eventually bounce off of their historic lows, Redfin should continue to gobble up market share and increase its real estate relevance.
First and foremost, Redfin is making its mark on the cost front. Whereas traditional real estate companies charge up to 3% to represent a buyer or seller, Redfin charges between 1% and 1.5%, depending on how much business has been done with the company. A difference of 2 percentage points might not sound like much, but with a median home price for active listings of $385,000 in June 2021, according to Realtor.com, this implies savings of up to $7,700 for a buyer or seller using Redfin, as opposed to a traditional real estate company.
Redfin is also providing a level of personalization that buyers and sellers simply aren't used to. The company's Concierge service charges up to 2.5% of the eventual selling price to work with homeowners on upgrades and staging to maximize the value of their home. Meanwhile, the RedfinNow service in select cities allows the company to purchase properties from sellers in cash. That means no haggling and an incredibly simple selling process. During the pandemic, Redfin has leaned on 3D virtual tours, as well, to bring added personalization to the buy-side of the process.
With Redfin's share of existing homes sales nearly tripling since the end of 2015 (0.44% to 1.14%), investors should be sold on this growth stock's bright future.
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Last, but not least, Facebook (META -1.12%) is another dominant FAANG stock investors can't confidently sink some (or all) of their $25,000 in right now.
When the curtain closed on the first quarter, Facebook had 2.85 billion people frequenting its namesake site at least once monthly. What's more, it had another 600 million unique people heading to Instagram or WhatsApp, which the company also owns. Together, that's 44% of the global population (3.45 billion) visiting a Facebook-owned asset each month. There isn't a social media platform on the planet that remotely comes close to these figures, which is why advertisers will pay through the nose for placement on Facebook.
What some folks may not realize is that Facebook's ad revenue growth isn't even remotely closely to reaching its peak. That's because Facebook and Instagram are currently responsible for virtually all of the company's ad sales. Even though WhatsApp and Facebook Messenger are two of the most-visited social sites on the planet, neither is being meaningfully monetized as of yet. When that does happen, Facebook's sales, cash flow, and profitability will rocket higher.
As the icing on the cake, Facebook's ancillary operations (listed officially as "Other" in its quarterly operating results) are booming. Specifically, sales of the company's Oculus virtual reality devices look to be soaring. If Facebook can add a meaningful secondary sales channel beyond advertising, it could send this stock markedly higher.
