Prediction: 3 Stocks That Will Turn $200,000 Into $1 Million by 2033

Investors can be forgiven if they're feeling shaken up after 2022. The Nasdaq 100 index plunged 33% which was its worst performance since the 2008 global financial crisis. 

But think about that for a second -- the stock market basically had over a decade of clear sailing. Sure, there were a couple of minor bumps along the way, but it's proof that taking a longer-term view can smooth out the noise and increase the odds investors will generate a positive return. 

With that in mind, let's explore three stocks growing quickly enough right now to deliver a fivefold return over the next 10 years. That means any one of them alone -- or a combination of all three -- could turn a $200,000 investment into $1 million. 

1. Confluent: The company you didn't know you needed

Have you ever used a sports betting platform to place a bet during a live game? Or do you often walk into a Walmart store and find exactly what you're looking for, every time? Delivering those convenient experiences takes a monumental technological effort behind the scenes, and Confluent (CFLT -1.47%) is the company powering it. 

It's a leading provider of data streaming technology, an opportunity Confluent values at $60 billion today. By 2025, the International Data Corporation thinks 90% of the 1,000 largest companies in the world will be using it -- so it's worth paying attention. The technology allows businesses to draw real-time insights from the data they generate through their cloud-based operations.

For sportsbooks, data streaming is used to facilitate live betting; when an event occurs during a match, odds must be recalculated and pushed to the customer in a matter of seconds, several times per game. In Walmart's case, the technology is used for inventory management. It links every physical store and every online sales channel so whenever a product is sold, it's quickly replenished before it runs out of stock. At the end of 2022, Confluent had 4,530 customers, including 991 spending at least $100,000 on its platform every year.

Confluent stock trades at a price to sales (P/S) ratio of 11.7 right now, based on $585.9 million in 2022 revenue and the company's current valuation of $6.9 billion. Assuming that P/S ratio remains constant, Confluent will have to grow its revenue by 17.5% each year between now and 2033 for its stock to soar fivefold and help turn $200,000 into $1 million. 

Considering it has grown at a compound annual rate of 73% since 2018, when it generated $65.1 million in revenue, the company could slow down significantly and still meet the necessary growth rate. 

2. Bill.com: A best friend to small businesses

Small businesses have enough on their plate without having to worry about administrative work, especially when it comes to tracking incoming and outgoing invoices and ensuring payments are up to date on both ends. Alas, it's a critical part of managing any successful enterprise, and that's why small to midsize businesses are flocking to Bill.com (BILL 2.13%).

It streamlines the accounts payable and accounts receivable workflows through the use of cloud technology. For example, operators can receive invoices, or upload them, directly to a digital inbox, and thanks to integrations with third-party platforms, they can pay those bills with one click and have the transaction automatically logged in their bookkeeping system. No more messy paper trails; no more missed payments.

Bill.com earns most of its revenue by taking a small percentage of each transaction facilitated by its platforms, and it's currently processing payments at an annualized rate of $250 billion. But for perspective, it's targeting a market worth $125 trillion, so it has barely scratched the surface of its opportunity. 

Over the past four years, the company has grown its revenue at a remarkable compound annual rate of 77%, from $64 million in fiscal 2018 to $641 million in fiscal 2022, which ended last June 30. It's unlikely to keep growing at that blistering pace, but remember, it has to grow its revenue by only 17.5% per year between now and 2033 for its stock to achieve a fivefold return, assuming its current P/S ratio remains constant.

Moreover, Bill.com stock is down 75% from its all-time high amid the broader sell-off in the tech sector. If it simply recovers those losses, it will generate three-quarters of the gain it needs to turn $200,000 into $1 million.

3. DigitalOcean: A cloud provider walking with giants

According to an estimate by Grand View Research, the cloud computing industry could be worth upwards of $1.5 trillion per year by the end of the current decade. That's a big opportunity for one small provider of cloud services, DigitalOcean (DOCN -2.91%), which has a market capitalization of just $3.8 billion today. 

The company offers a portfolio of solutions targeting businesses with less than 500 employees, including startups, to help them host websites, develop software, store data, and even stream video. DigitalOcean is competing with giants in the cloud industry, such as Amazon Web Services (AWS) and Microsoft Azure, which have the support of their trillion-dollar parent companies. 

But AWS and Azure make most of their money from larger enterprise customers; it's not economical for them to offer the same level of personalized service, support, and affordable pricing structures to small businesses the way DigitalOcean can. DigitalOcean's customers, for example, spend an average of just $80.27 per month. Nonetheless, it's a lucrative segment of the cloud market because it's expected to be worth $98 billion this year, and it could double to $198 billion by 2026.

DigitalOcean generated $576 million in revenue in 2022, representing a compound annual growth rate of 29% since 2018, when it brought in $203 million. While it's not expanding quite as quickly as Confluent or Bill.com, it's still comfortably above the 17.5% annual growth rate necessary to turn $200,000 into $1 million by 2033, assuming its P/S ratio remains constant. 

Plus, it has barely captured a fraction of its addressable market, so there's scope for its growth to accelerate. There was evidence of that in 2022, when its revenue growth came in at 34%, which was above its four-year average.