No one knows whether the stock market's volatility and price drop are the beginning of a more severe decline or just a temporary dip. Either way, there are always companies positioning themselves for long-term growth, no matter what the broader economy or the broader market is doing.
If you have some cash to invest and don't mind some near-term volatility, here are two no-brainer stocks that could make you some money over the next 10 years. You shouldn't hesitate in considering them.
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1. Electronic Arts
The video game industry has been growing since the 1970s. Recent estimates place the total annual sales of games at $178 billion, expected to reach $268 billion by 2025.
Electronic Arts (EA -0.65%) is one of the best stocks to consider in this sector. The company is known for its EA Sports label, including annual best-sellers like Madden and FIFA, and it has 540 million unique player accounts. It also makes several other top franchises for console and PC, including The Sims and Battlefield.
A $10,000 investment a decade ago would be worth $75,000 today, but the company continues to pursue promising opportunities that could fuel more returns going forward. It acquired Glu Mobile last year for $2.1 billion, which puts a profitable and growing mobile game business under its wing. It also has a pipeline of new titles in the works, including the return of its college football franchise and six mobile experiences based on its popular FIFA soccer series.
Top video game companies that make best-selling games are good businesses to invest in. EA generates a healthy amount of recurring revenue from its annual sports titles that get updated every year with new features and content.
Making video games is very profitable, too. Over the last year, EA generated $1.6 billion in free cash flow on $6.5 billion in revenue. However, the stock's valuation is what seals the deal.
The stock currently trades at a forward price-to-earnings ratio of 17, which looks particularly attractive compared to the earnings multiple of 23 that Microsoft is paying to acquire Activision Blizzard. EA appears undervalued at these prices and is a no-brainer stock to buy in this growing industry.
2. Nvidia
Gamers who play their favorite titles on PC are likely familiar with Nvidia's (NVDA 3.71%) graphics processing units (GPUs). Nvidia has long been a popular hardware choice for gaming PCs, but over the last decade, the chipmaker has found new use cases for its core graphics processing technology in several markets.
Over the last five years, Nvidia's data center business has grown over five times in size to $4.4 billion in annual revenue. Combined, the data center and gaming segments made up 87% of Nvidia's total revenue in the fiscal fourth quarter, and the outlook for more growth looks favorable.
Gartner expects global IT spending on data center systems to grow 4.7% in 2022 to reach $226 billion. Nvidia reported that revenue from data center and public cloud providers more than doubled year over year in the last quarter.
Meanwhile, Nvidia's gaming business is going through a massive upgrade cycle, as video gamers adopt Nvidia's latest RTX graphics cards to play the latest games at the highest graphics fidelity. Gaming revenue grew 37% in the recent quarter, despite supply shortages making it difficult for most gamers to buy a new GPU at retail. Nvidia is likely leaving a lot more revenue on the table in its gaming segment.
The stock could fall further in the near term if the economy slows down, which would cause spending on data centers to also decelerate. But the world is going to need more data processing, and Nvidia is one of the top providers of chips and system hardware that helps companies process large data workloads in record time.
If you have more than 10 years to invest, I believe Nvidia is a no-brainer tech stock to buy and hold. It's only going to grow into a much larger business over the long term.
