Can a $10,000 investment turn you into a millionaire? Sure, given enough time, this seemingly small investment can set you up for life. In fact, I cover one such example below -- and I guarantee it's a company you know.
At any rate, I think many stocks could turn today's investors into tomorrow's millionaires -- if you're willing to play the long game. So let's dive in. Here are my three top stocks to invest $10,000 in right now.
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Nvidia
There are a few things that immediately get the attention of Wall Street analysts. One of them is when a company CEO starts making comparisons to the introduction of the Apple iPhone. Bear in mind, if you had invested $25,000 in Apple on the day it introduced the iPhone in 2007, you'd have $1.328 million today.
So when Nvidia (NVDA 0.76%) CEO Jensen Huang said that the recent mania over ChatGPT represents an "iPhone moment" for artificial intelligence, Wall Street took notice. Shares of Nvidia jumped 14% after the company reported a revenue and earnings beat for its fiscal fourth quarter of 2023.
Increasingly, two things are clear: 1) AI is making enormous strides in capability, technique, and convenience, and 2) Nvidia will be a massive beneficiary of the rise of AI. AI is increasingly capable of performing any number of tasks. And all that AI will require computing power -- much of it supplied by the high-powered processors Nvidia designs and sells.
Indeed, Nvidia's revenue grew to $6.05 billion in its most recent quarter, while its data center unit grew sales by 14%. It's this data center unit, which designs and sells graphics processing units, that stands ready to power the next iteration of AI, which is why Nvidia is worth owning for the long term.
RH
When it comes to stocks, you want companies that have a clear business model. Oftentimes, that means targeting not an entire market, but a certain segment within the market.
RH (RH 0.64%), a maker of luxury home furnishings, does just that. The company focuses on providing customers with distinctive and refined home accessories. Like Lululemon Athletica's market, RH customers are affluent and their spending may be less constrained by macroeconomic factors.
RH operates 81 properties throughout the United States, Canada, and the United Kingdom. These showrooms are located in well-off areas. In fact, 13 boast restaurants or wine bars.Thus, RH is somewhat insulated from economic downturns. Granted, a severe recession would still impact the company, but inflation is less of a concern than with a typical retailer.
At any rate, RH has navigated the twists and turns of the last three years remarkably well. Overall, the shares are up 27% despite being more than 58% off their all-time high. And with a price-to-earnings multiple of 11.5, RH remains affordable. I think the company is well-positioned to capitalize on its high-end customer base, now and for years to come.
McDonald's
They say slow and steady wins the race. And when it comes to my third pick, McDonald's (MCD 0.38%), that certainly seems true. If you had bought $10,000 of McDonald's stock in 1973, and reinvested your dividends, you'd have about $7.5 million today.
MCD Total Return Level data by YCharts
That's a lot of dough for a company that just delivers affordable food quickly. But there are good reasons for its success. The company operates over 40,000 restaurants in 119 countries, providing it with a massive worldwide scale. Moreover, McDonald's has consistently adapted to the times. It has adjusted its menu as tastes change and adopted mobile ordering and delivery to meet customer needs.
Of course, owning a marquee brand like McDonald's also has its downsides. With its price-to-earnings ratio of about 31, that means you'll pay for quality. Moreover, persistently high inflation could squeeze McDonald's profits. However, thus far the company has managed to avoid declining margins, even as food and labor costs have risen. That's perhaps owing to customers trading down as food costs have gone up.
What's more, McDonald's offers investors a solid 2.26% dividend yield, backed by more than $7.40 per share of free cash flow. That's one more reason to own this American corporate icon for decades into the future.
