Many investors often focus on a company's near-term growth when deciding to buy or sell its stock. But over the past few decades, many of the market's greatest tech stocks generated massive multibagger gains for their investors because they constantly looked ahead instead of jogging in place and fretting over Wall Street's expectations.
Those forward-looking companies tend to have strong core businesses, plenty of cash, and visionary leaders who think about the future in terms of decades instead of quarters. Let's take a closer look at three tech giants that check all three boxes: Apple (AAPL +2.66%), Meta Platforms (META 0.89%), and Alphabet (GOOG +1.24%) (GOOGL +1.36%).
Image source: Getty Images.
1. Apple
Apple didn't invent the smartphone, but it ushered in the current era of touchscreen-based phones with the iPhone 15 years ago. It also didn't invent tablet computers or smartwatches, but it turned those niche gadgets into mainstream ones with the iPad and Apple Watch, respectively.
NASDAQ: AAPL
Key Data Points
Apple's knack for reinventing products, its ability to lock users into its walled garden, its strong brand appeal, and its massive war chest of $179 billion in cash and marketable securities (as of the end of this June) should enable it to confidently launch new products and services over the next few decades.
Apple hasn't officially said much about its upcoming projects, but it's widely expected to launch augmented reality (AR) glasses and virtual reality (VR) headsets in the near future. It's also reportedly developing a dedicated App Store and operating system (rOS) for those devices, which could gradually reduce its dependence on the aging iPhone.
Apple has also been reportedly developing an electric vehicle. In a recent survey by Strategic Vision, 26% of new car owners said they would consider buying an "Apple Car" -- compared to just 20% who said they would consider buying a Tesla. That pent-up demand indicates Apple could eventually disrupt the EV market in the same way that it turned the smartphone, tablet, and smartwatch markets upside down.
2. Meta Platforms
Apple's expansion into the AR and VR market sets it on a collision course with Meta Platforms, the tech giant formerly known as Facebook, in the nascent metaverse market. Meta established a first-mover's advantage in that market by buying the VR headset maker Oculus in 2014, and then proceeding to launch the brand's first commercial headset in 2016.
NASDAQ: META
Key Data Points
Meta subsequently focused on the development of cheaper, smaller, and stand-alone VR headsets to eliminate its dependence on phones and PCs. Its current lineup of Quest headsets embodies that strategy. The Quest 2, which has shipped about 15 million units since its launch in October 2020, is now the best-selling stand-alone VR headset in the world.
Meta will reportedly launch its higher-end Quest Pro later this year for about $1,500. It's expected to launch the cheaper Quest 3, which will likely cost approximately $300 to $400 like its predecessors, sometime next year.
Meta is spending billions of dollars on these devices each year with little immediate return, but it believes they'll eventually tether more users to Horizon Worlds, its VR space for social activities. Horizon Worlds only hosted about 300,000 users earlier this year, but it could eventually evolve into a brand new (monetizable) social platform that could reduce Meta's dependence on Facebook and Instagram.
3. Alphabet
Alphabet still generates most of its revenue from Google's advertising business, which houses its core search engine, its sprawling advertising network, and YouTube. However, Google's sister companies within Alphabet -- the parent company it established in late 2015 -- house many of its more intriguing long-term projects.
NASDAQ: GOOGL
Key Data Points
Waymo, Alphabet's self-driving vehicle subsidiary, doesn't manufacture its own vehicles. Instead, it partners with other automakers to outfit their vehicles with its driverless technology. It's also been running road tests in various cities, testing out robotaxi services, and providing autonomous delivery services.
Verily, Alphabet's life sciences subsidiary, has been dabbling with nanoparticle-sensing wristbands, advanced surgical robots, glucose-monitoring contact lenses, and other "moonshot" gadgets that traditional medical device makers are unlikely to develop on their own. Another subsidiary, Calico, has been researching and developing treatments for age-related diseases with AbbVie.
None of these other subsidiaries will generate significant revenue or reduce Alphabet's dependence on Google anytime soon. But over the long term, they could spread Google's sprawling digital ecosystem well beyond PCs and mobile devices to reach cars and medical devices. They could also help Alphabet eventually evolve into a more diversified tech company.
