The stock market has experienced a lot of fluctuations in the last few years, with the COVID-19 pandemic bolstering many tech and e-commerce companies. Then, 2022's economic turbulence and rising interest rates caused a wide array of stocks to plunge. And so far, 2023 has been a year of recovery as easing inflation and technological advances have made Wall Street bullish again.
All of that market volatility has highlighted for investors the importance of buying solid growth stocks and holding them for the long term. Meanwhile, companies with significant market shares in high-growth industries can almost guarantee consistent gains over multiple decades. The tech industry is a particularly attractive area to find these types of stocks, thanks to its innovative nature.
Consequently, many tech stocks have massive growth potential over the long term. Here are two of the best stocks to buy and hold until you retire.
1. Apple
It shouldn't be surprising that Apple (AAPL 0.27%) is on this list. After years of strong stock growth, the tech giant became the first company to achieve a market cap of $3 trillion in 2023. Its share price has soared 886% in the last 10 years, more than many of its peers have achieved in the same period, including Alphabet, Microsoft, and Meta.
Apple's consistent growth has caught the eye of some of the most famous investors. For instance, it now accounts for 46% of the value of Berkshire Hathaway's equity portfolio. Comparatively, its second-largest holding is Bank of America, which accounts for 8%. Berkshire CEO Warren Buffett has long been a major proponent of Apple, speaking on how its immense brand loyalty is one of its biggest selling points. In April, the investing mogul said, "If someone offered you $10,000 to never buy an iPhone again, you wouldn't take it."
While surprising, the sentiment rings true for many consumers who would sooner give up countless other brands for other devices before straying from Apple. The company has strategically created an interconnected ecosystem for all its products, making its established customers unlikely to turn to the competition if Apple is an option. This allegiance from consumers has seen the company's annual revenue climb 409% since 2014, with operating income up 386%.
Meanwhile, Apple has achieved leading market shares in many of its product categories, including smartphones, tablets, headphones, and smartwatches. Its dominance in consumer tech makes it a powerful driver of growth for lucrative markets like artificial intelligence (AI) and virtual/augmented reality (VR/AR), as its products will likely be the ones that get VR/AR technology to mass adoption. With years of consistent stock growth and nearly unrivaled brand loyalty, Apple is an attractive stock to hold until retirement and beyond.
2. Amazon
As far as investing in companies with significant market shares in high-growth markets, Amazon (AMZN -0.93%) is one of the best options. The company dominates e-commerce and cloud computing, strengthening its long-term outlook.
According to a forecast from Statista, the e-commerce market is projected to hit nearly $4 trillion this year and expand at a compound annual rate of 11% through 2027. The figures align with the fact that online retail sales only made up about 15% of all purchases last year, indicating the market is nowhere near hitting its ceiling. Meanwhile, Amazon is easily the biggest name in the industry in multiple countries. The company holds a 38% market share in e-commerce in the U.S. alone, while Walmart holds the second-largest share at 6%. As a result, Amazon is best positioned to profit from the sector's long-term growth.
Moreover, its Amazon Web Services (AWS) cloud unit has diversified its business and given it a powerful position in one of the most lucrative industries of 2023. As the world's biggest cloud infrastructure provider, AWS has a massive advantage in the future of AI. The company may not have been the first in the industry, but it has the brand power and a long list of clients that give it massive potential in that high-growth market.
In the first six months of this year, the company bolstered its generative AI offerings by adding two new services on AWS, and announced it is developing its own AI chips. Alongside its e-commerce dominance, Amazon's stock is a no-brainer for those looking for a decades-long investment.
