Think about how much your life has changed in a decade. It's a long time, and a mind-blowing amount of things can happen or change in that span. The world changes too. A decade ago, smartphones and electric cars were barely a thing.
Now, if you bought Apple or Tesla (TSLA +2.45%) stock a decade ago, it's worked out very well for you. So what is going on today that investors can benefit from over the next decade?
Here are five growth trends to watch and stocks that could benefit.
Image source: Getty Images.
1. Cybersecurity: Crowdstrike Holdings
Old antivirus programs are no longer good enough to protect your computing devices from hackers; there have been countless breaches at companies where consumer data was compromised. A recent study showed that 78% of IT workers were worried about cybersecurity, and 91% of companies planned to increase cybersecurity spending in 2021.
Crowdstrike Holdings (CRWD +2.19%) uses its proprietary "Falcon" platform to link all its customers together on a cloud-based network. If a threat is detected somewhere, the entire network immediately learns from it and better seals itself off from the threat, creating network effects that improve the technology the larger it grows.
Analysts are calling for 64% revenue growth for Crowdstrike in the current fiscal 2022 year (2021 calendar year), and the business is profitable despite still being in its growth phase. Tech research firm Gartner has repeatedly ranked Crowdstrike as a leader in cybersecurity, so Crowdstrike could continue picking up business over the years to come.
2. Solar energy: Tesla
Solar panels have been around since the 1950s, but production costs have dramatically fallen over the past decade, and solar energy is now cheaper than coal-fired power.
Tesla Motors has come a long way since unveiling its first Model S in 2012. Today, it's one of the world's largest companies, and its vehicle business is quickly growing. However, Tesla is also one of the leading battery technology companies worldwide and also has a solar energy business under its roof.
Tesla's Gigafactory 2 is located in New York and builds solar cells and components for energy storage and superchargers at the facility. After years of losing money, Tesla's business is now profitable, and analysts are calling for an average of 37% earnings-per-share growth each year over the next three to five years. Tesla could continue to be an outstanding energy stock for its EV and solar businesses, both of which have room to grow.
3. Metaverse: Meta Platforms
The world is becoming increasingly digital, and the next step in this progression might be the Metaverse, where the physical and digital worlds come together. The Metaverse is in its earliest stages but could mature to become a digital economy of sorts.
Mark Zuckerberg is a huge supporter of the Metaverse and recently renamed his company from Facebook to Meta Platforms (FB 0.55%) to signal the company's focus on building this digital world.
Building the Metaverse will be a vast undertaking, and Meta is investing at least $10 billion this year alone and expects to invest billions more over the years to come. The company has the deep pockets to do this, with $58 billion in cash on its balance sheet. Meta has 2.8 billion monthly active users and has made $29 billion in profits alone over the past three quarters.
4. Cryptocurrency: Coinbase Global
The global market cap of all cryptocurrencies is now more than $2 trillion, so what started as a "fad" has become a very serious asset class. A recent report said that 40% of all U.S. dollars currently in existence were printed in the past year. That ramp-up in government spending is pushing investors to consider non-dollar-based methods to store monetary value as a means of fighting inflation.
Cryptocurrency could still be in its early stages, where both established cryptos like Bitcoin and Ethereum trade alongside speculative cryptos like Dogecoin. Coinbase Global (COIN +1.90%) is a leading cryptocurrency exchange and crypto technology company that could significantly influence the industry as a whole.
Coinbase's reputation as a leading exchange is essential because crypto is often difficult/impossible to trace, so security is critical. Coinbase can expand in many different ways; it can branch from facilitating crypto trades to basic banking features like spending, saving, and investing. If crypto continues to go mainstream, Coinbase will likely be there for it.
5. Artificial intelligence: Upstart Holdings
Like solar power, artificial intelligence is a technology that has been around but is becoming increasingly practical by getting better over time. At some point, these improvements allow companies to use AI to turn industries on their head. The FICO score-based system for qualifying loan applicants is a recent example.
Upstart Holdings (UPST +3.67%) uses proprietary AI to make lending decisions without needing a FICO score. Many people may pay back a loan but either don't get qualified or pay a higher interest rate than they need to because of a low FICO score. Upstart has what appears to be a better alternative.
In just one year since going public, Upstart has expanded its base of banking partners from 10 to 31, and some of them have stopped using FICO scores entirely, relying on Upstart's models. The company is expanding from personal loans to auto and mortgages, so Upstart's story could just be getting started.
