3 Game-Changing Stocks That Could Turn $100,000 to $1 Million by 2035

Many investors search for what may seem to be an elusive unicorn, the 10-bagger stock. But with enough patience and companies that have the tailwinds of long-term growth trends, a massive market, and excellent execution, you can improve your odds. 

We asked three Motley Fool contributors to highlight one stock that could make the leap to grab a 10-bagger crown by 2035 and they came up with Etsy (ETSY 0.49%), Roku (ROKU 1.58%), and The Trade Desk (TTD -0.54%). 

Image source: Getty Images.

Etsy: This marketplace for handcrafted items is special 

Brian Withers (Etsy): It would be an understatement to say that the coronavirus has been a tailwind for Etsy. In the past five quarters, this marketplace for artisans to sell handcrafted items has more than doubled its gross merchandise sales, revenue, and adjusted EBITDA. But to say that it is just a coronavirus play is short-sighted. This marketplace has crafted a special place for consumers and will continue to grow for years to come. Let's look at why this stock could be a 10-bagger by 2035 if you buy today.

The market wasn't overly excited about this quarter's results and sold off in the few days after earnings. This is not surprising as the company was comparing to the first quarter of the coronavirus when demand for face masks skyrocketed on the platform. You'd think a 13% gain in platform sales and 17% year-over-year revenue growth would have excited investors, but it's a far cry from the triple-digit growth the marketplace saw over its pandemic-fueled quarters. 

Data source: Etsy. QOQ = Quarter over quarter. YOY = Year over year.

The market may have experienced a bit of letdown from the most recent quarter, but there are some key metrics that highlight the long-term prospects of this platform. First, buyer metrics continue to head in the right direction. Ninety percent year-over-year growth for active buyers (those who have made a purchase in the last 12 months), a 61% increase in repeat buyers (those who have two or more purchase days in the past year), and a 115% gain in habitual buyers (those who have six or more purchase days in the last 12 months). Second, not only are more buyers coming to the platform, they are also spending more. Gross merchandise sales per active buyer hit a record $129, a 22% year-over-year gain this quarter.

Lastly, Etsy's recent acquisitions of Depop, the clothing reseller platform, and Elo7, the "Etsy of Latin America," give the company access to a $1.7 trillion total addressable market. With its loyal buyers, solid execution, and massive market, investors can buy this special stock today and expect impressive returns through 2035. 

Image source: Getty Images.

Roku: The stock that allows streaming to reach its full potential 

Will Healy (Roku): Roku did not invent streaming, and its player is a commodity that other high-tech manufacturers could easily copy. However, Roku has changed the streaming game in one way -- advertising.

Roku's ecosystem allows content providers to monetize programming through ads. This not only gives them an incentive to stream content through Roku, but it also allows Roku to derive revenue from advertising. So lucrative is this avenue that Roku later started its own ad-based streaming platform and later acquired Quibi to offer its own Roku Channel.

Roku has also headed off potential competition from the likes of Amazon, Apple, and Alphabet by not only offering low-cost streaming players but also contracting with manufacturers to produce smart TVs that come pre-installed with Roku's ecosystem.

As a result, Roku holds a 30% market share over the streaming market worldwide and a 37% share in North America, according to Conviva. However, Roku's moves into international markets have only just begun, and its strength in North America could serve as a segue into these markets. Moreover, the worldwide presence of major content providers like Disney and Netflix fosters the need for such an international push.

Despite this potential, its successes helped it earn revenue of more than $1.2 billion in the first half of 2021. This is an 80% increase compared to the first two quarters of 2020. Increases in both the cost of revenue and operating expenses lagged the rate of revenue growth, and this allowed Roku to boost net income to $150 million in the first two quarters of 2021, well above the loss of $98 million in the first half of 2020.

Due to fewer forecasted closures amid a lull in the pandemic, Roku predicts third-quarter revenue between $675 million and $685 million and income ranging from a $3 million loss to a profit of $7 million. This lags the second quarter's growth rates, and sequential growth concerns caused Roku to pull back by almost 30% since late July despite an increase of about 95% over the previous 12 months.

Still, volatility does not always equal risk, and considering the market potential of streaming, any potential slowdown is unlikely to persist. Given current conditions, a tenfold increase for Roku is not out of the question.

Image source: Getty Images.

The Trade Desk: On the cutting edge of programmatic advertising

Danny Vena (The Trade Desk): There's little question the advertising landscape is changing. No longer can marketers depend solely on broadcast and cable television or even just the top search engine or social media platforms to reach their target markets. The ability to reach consumers where they live is more fragmented than ever before and that's where The Trade Desk comes in.

The programmatic advertising space is The Trade Desk's bread and butter. The company's state-of-the-art platform can evaluate 12 million ad impressions and quadrillions of permutations each second, helping marketers better reach their target market. The Trade Desk works with the world's leading advertising agencies to help them navigate the complex and increasingly high-tech world of digital advertising.

The Trade Desk is also anticipating the demise of the third-party cookie and driving efforts to protect consumer privacy while still supporting targeted ads with the debut of its Unified ID 2.0. A growing list of companies and advertisers is adopting The Trade Desk's platform, which is able to provide consumers with relevant ads without using any personally identifiable information. 

Overall, the advertising industry is a lumbering giant and growing at a snail's pace. Advertising is expected to grow by about 6% this year to $619 billion. However, below the surface, some segments of the business are growing much more quickly.

Digital advertising is growing at twice the rate of the overall industry and is expected to climb 12% in 2021. Programmatic advertising, which uses high-speed computers and sophisticated algorithms to place ads in front of the right consumers, is the fastest-growing segment of the market, expected to climb 29% in 2021. Even considering the events of last year, The Trade Desk is growing even faster. 

Advertising was hit hard during the pandemic, as this was an area where companies could quickly rein in spending to shore up their financial position. As a result, The Trade Desk was hit hard, with revenue declining 13% year over year during the 2020 second quarter. Yet even with those headwinds, revenue grew 39% in 2020, as marketers turned to The Trade Desk to get the most bang for their advertising buck.

The company came roaring back this year, with revenue climbing 101% year over year in the second quarter, though the bar was set very low, as Q2 last year was at the height of the pandemic marketing slump. That said, The Trade Desk's revenue is up 67% for the first six months of this year. Perhaps more importantly, net income is up 43% for the first six months of 2021, even in the face of significant investment to expand its business.

The world of advertising is undergoing a paradigm shift as the result of recent technological advances and The Trade Desk is leading the way. The stock has been a monster of a growth stock, gaining 2,500% in the five years since its IPO. With a market cap of just $37 billion, it's easy to envision a scenario where The Trade Desk is a 10-bagger -- or more -- between now and 2035.