Even relatively modest investments can lead to enormous gains. And those colossal gains can set you up for life. Consider how a $10,000 investment in Netflix made 10 years ago would have grown to more than $280,000 today. At the stock's peak, that initial $10,000 would have soared to more than $858,000. Needless to say, that sort of money can be life-changing.
Let's have a look at other two companies I think can deliver life-changing returns: Alphabet (GOOG -0.79%) (GOOGL -0.86%) and Snowflake (SNOW 0.54%).
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Expect Alphabet to maintain its strength in the long run
Alphabet, the parent company of both Google and YouTube, is a technological juggernaut. The business's crown jewel is its Google Search platform, which holds a staggering 83% market share of online searches.
With a near-monopoly on search, Alphabet racks up an astonishing amount of revenue from placing ads in its search results. In its most recent quarter (the three months ending June 30, 2022), the company generated $40.7 billion in revenue from its Google Search and Other division, up from $35.9 billion a year ago.
But Alphabet's advertising prowess isn't limited to search. Its YouTube segment is a force in its own right. Just consider what it's doing for the music industry alone. Alphabet announced that between July 2021 and June 2022, YouTube paid more than $6 billion to the music industry through royalties. Along with the rise of audio streaming, YouTube is helping the industry reach revenue levels not seen since before the turn of the century. Best of all, it's a win-win-win for everyone involved: Artists and record companies receive royalties, YouTube viewers benefit from a wide variety of ad-supported music content on demand, and YouTube rakes in ad revenue.
However, like many stocks this year, Alphabet's fundamentals have been overshadowed by a bear market that won't quit. Shares are down 32% year to date. But on both a relative and absolute basis, that decline presents an opportunity. Investors can now buy Alphabet shares for less than $100 after the company's recent stock split.
GOOG PE Ratio data by YCharts
What's more, Alphabet's current price-to-earnings ratio is now at a 10-year low of 18.25, far below its 10-year average of 30.7. Smart long-term investors will be eager to pounce on Alphabet stock now, snapping up shares today so that they can reap the benefits of owning this fantastic company for years to come.
Snowflake continues to grow its customer base
The second game-changing stock that could help set you up for life is Snowflake.
Snowflake is riding the wave of a major secular trend: The Cloud. In particular, Snowflake specializes in cloud-based data analytics, which helps organizations "see" all of their cloud-based data, which, in turn, helps those organizations run more efficiently.
Cloud-based data analytics is becoming ever-more important as cloud spending continues to soar. Organizations are eager to shift their applications, security, and data to a centralized location where it is easier -- and cheaper -- to manage their digital assets. Worldwide end-user spending on the cloud has surged from $145 billion in 2017 to $411 billion in 2021. By 2023, total spending should approach $600 billion.
What helps Snowflake stand out from the other cloud players is its business model. Rather than directly competing with the giants of cloud computing, such as Amazon, Microsoft, and Alphabet, Snowflake provides a service that allows organizations to break down the silos that often form when an organization employs multiple cloud vendors. As such, the endless competition between the cloud giants is a benefit for Snowflake that should continue to pay off as organizations switch vendors.
The company's CEO is Frank Slootman, who previously served as chairman of ServiceNow. Slootman has led the data specialist since its initial public offering back in 2019. Under his leadership, Snowflake is growing its customer base and recording exceptional revenue growth.
The business now has clients across many different sectors:
- Tech companies like Adobe and Okta
- Healthcare providers like Elevance Health and Novartis
- Financial companies like Capital One and Pacific Life
In fact, Snowflake has over 245 customers who have spent more than $1 million on its products over the last 12 months -- an increase of 112% year over year. As for revenue, Snowflake generated $1.64 billion during the previous 12 months. Quarterly revenue grew 83% year over year.
What's more, analysts expect Snowflake to earn $0.16 per share this year, up significantly from $0.01 per share last year. In 2024, Wall Street sees the company growing its profits to $0.43 per share. Long-term investors love to see increasing EPS projections years out into the future, and Snowflake appears poised to deliver on exactly that. It's just another reason to own this game-changing stock today -- and for many years to come.
