If you're like most investors, you're relying on stocks to build (or expand) a nest egg for later in life. That's no problem -- the market can definitely do that. But if you're looking for more than merely storing up savings and outpacing inflation, it's going to take certain kinds of stocks. Not only must these companies provide a service or product nobody else can, but they must also be able to hold that competitive lead for the indefinite future.
You've got to be very, very patient with them as well. Time is your best ally when it comes to the market.
With that as the backdrop, here's a rundown of three great stocks with not just the potential to dish out gains, but the potential to help make you outright rich.
1. Nvidia
You may know it as a maker of high-performance computer graphics cards loved by video gamers. And that will remain a key part of its business going forward. Where Nvidia (NVDA 0.69%) is really going to see unexpectedly strong growth in the near and distant future, however, is from its data center business that serves the artificial intelligence market. As it turns out, the same underlying technology needed to make powerful graphics processing units is ideally suited to handle the massive amount of number-crunching needed for AI applications.
The company's already showing major signs of this growth potential, too. Last quarter's AI-led data center sales of $3.75 billion not only eclipsed its video gaming-related revenue, but it's 83% better than its data center top line from the same quarter a year earlier.
And if you think that big growth is purely the result of a post-pandemic bounce, think again. The company's data center revenue for the entirety of pre-COVID 2019 (fiscal 2020) rolled in at just under $3 billion; it's on pace to quadruple that figure this year alone.
That's still just the beginning, though. Precedence Research estimates the artificial intelligence market will grow at an annualized clip of 38% between now and 2030, when it will be worth a whopping $1.6 trillion. Given that Nvidia already leads the AI hardware and software market and now offers the world's first purpose-built AI workstation -- called the DGX -- the company's poised to capture more than its fair share of that growth.
Granted, the stock hasn't reflected this potential of late. But 10 years from now, the recent weakness won't even be a faded memory.
2. Adobe
You'll probably recognize it as the name behind the readily printable "pdf" documents frequently found on the web. Some people will also recall its Photoshop software pioneered the digital image-management arena. The company still actively manages both business lines, too. Adobe (ADBE -0.28%) is so much more than that these days, though. It's just difficult for the average investor/consumer to see it.
Simply put, Adobe now helps enterprises with websites get more out of those websites -- although that description still doesn't do it justice. Adobe's cloud-based Creative Cloud platform allows clients to edit digital photographs, create graphics (including animations), design for printing, and of course, create and edit pdf files that can also be edited by that user-client's own customers. Its Experience Cloud platform allows users not just to design websites, but create entire web ecosystems that handle e-commerce, collect customer data, and manage online marketing campaigns. Experience Cloud can even customize a particular individual's view of a website.
These are impressive business-building tools, which is why Adobe has been able to grow its yearly top line from less than $7 billion in 2017 -- when it launched Experience Cloud -- to more than $16 billion now.
This figure still only scratches the surface, however. Many organizations with websites haven't yet figured out that merely managing a website isn't enough. Websites are not only a tool to draw customers in, but customers expect their experience with a website to offer something of a "wow" factor.
These enterprises are figuring it out now, though. Analysts are collective calling for sales growth of 12% this year, to be followed by top-line growth of 14% next year, in line with the growth pace that's been in place for nearly a decade.
Perhaps the most compelling bullish argument for Adobe, however, is the fact that cloud-based Experience Cloud and Creative Cloud are rented rather than outright bought. This translates into reliable recurring revenue. The company just needs to keep bringing new paying customers into the fold. In this vein, not once since 2014 (shortly after Creative Cloud debuted) has Adobe reported a year-over-year dip in its quarterly revenue. Earnings growth has been almost as consistent.
3. Synopsys
Finally, add Synopsys (SNPS -1.55%) to your list of investments you can't go wrong with if you're looking to potentially get rich by owning stocks.
It's a bit off the beaten path. In fact, there's a good chance you've never even heard of it, despite its $47 billion market cap. And even if you have heard of it, you may not know what it does. Don't let its obscurity or lack of familiarity fool you, however: This is a name with lots of long-term growth potential.
In the simplest terms, Synopsys provides the software needed to design and test microchips before they're attached to a circuit board en masse. Its platform isn't just a virtual multimeter, though. The company is able to assist in the development of artificial intelligence systems, test the digital security of a computer component, determine and tweak a microchip's power consumption, and gather a variety of design and testing data into useful insights, just to name a few of its capabilities.
Most of this stuff is over the average person's head, and that's OK; you don't have to understand the technology to appreciate the potential. You just have to understand that computerized circuitry is already wildly advanced but will only become more complex as the world increasingly relies on mobile devices to do their own "thinking" and self-manage their functions.
That's why the need for easier, faster, and cheaper chip design is never going to go away. That's also how the company mustered sales growth in a coronavirus-crimped 2020 as well as in 2021, when the fallout from the pandemic rattled semiconductor supply chains.
There's no end in sight, either. Look for top-line growth of nearly 20% this year and another 11% next year, paired with per-share earnings growth of 26% and 13%, respectively. This brisk pace is the recent (and likely foreseeable future) norm.
