"Best" is in many cases a really subjective term. That's certainly true when it comes to stocks. The ones that one person considers the best could be completely different from another individual's picks.
In my view, the best stocks are those that have strong underlying businesses and exceptional growth prospects. They're the kinds of stocks that you can comfortably invest large amounts of money in with confidence that you'll likely receive market-beating returns over the long term.
There are several stocks that potentially meet that criteria. But here are my picks for the best stocks to invest $10,000 in right now.
1. Intuitive Surgical
I really like healthcare stocks, in general. My favorite of them all, though, is Intuitive Surgical (ISRG -2.38%). The company has two of the most critical attributes of a great stock -- a strong moat and tremendous growth prospects.
Intuitive Surgical created the robotic surgical systems market more than 20 years ago. It continues to dominate the field with a market share of close to 80%. More than 6,500 of its da Vinci systems are installed worldwide. More than 10 million procedures have been performed with its robotic systems.
The company faces more competitors now than in the past. However, I think that Intuitive's track record gives it an unparalleled advantage. No rival can provide the clinical evidence and economic validation for robotic surgery that Intuitive can.
Intuitive estimates that around 6 million procedures are performed each year for which it already has products and regulatory clearances. That's roughly four times greater than the current number of procedures for which the company's systems are used. Even better, Intuitive believes that its products in development and anticipated future regulatory clearances could increase its addressable market to 20 million procedures.
Sure, the stock trades at more than 60 times expected earnings. But with the kind of growth that Intuitive could realistically achieve, it deserves a premium valuation. The best stocks often do.
Find the strongest players in the fastest-growing areas. That's usually a great way to identify the best stocks to buy. There's no question Nvidia (NVDA 1.03%) belongs in this group.
One of those fastest-growing areas is gaming. Nvidia's graphics processing units (GPUs) are the gold standard for powering video games. The company seems likely to have a big winner with its RTX350 entry-level graphics card that will soon launch. Nvidia is also going to unveil a monster graphics card for the high-end market segment.
The company's GPUs are also ideally suited for artificial intelligence (AI) apps running on servers in data centers. This is actually an even faster-growing market for Nvidia than gaming.
Then there's the metaverse. Nvidia already launched Omniverse, its platform for 3D design and collaboration. CEO Jensen Huang thinks that Omniverse Avatars (which can be used to create AI avatars) has an addressable market of at least $40 billion. The opportunities for Nvidia's GPUs in the metaverse are even greater.
Those aren't Nvidia's only potential growth drivers, though. Its self-driving car technology could make the company a lot more money over the next decade and beyond.
Unlike Intuitive Surgical and Nvidia, MercadoLibre (MELI -2.77%) didn't deliver solid gains in 2021. Its shares fell nearly 20%. But that makes the stock's valuation much more attractive considering its tremendous growth prospects.
MercadoLibre's dismal performance last year wasn't due to underlying problems with its business. The company's net revenue soared 72.9% year over year on a constant-currency basis in the third quarter of 2021. Earnings jumped more than sixfold. And Q3 was an especially tough quarter for year-over-year comparisons.
The future appears to be bright for the company. MercadoLibre's e-commerce platform is attracting new buyers. Retention levels are increasing. The e-commerce penetration rate in Latin America could double by 2025, according to Morgan Stanley.
Don't just think of MercadoLibre as an e-commerce company, though. Its Mercado Pago fintech and Mercado Envios logistics businesses are rocking as well. The fintech opportunity should be especially attractive in light of the large number of individuals in Latin America with no or limited banking services.