Every investor wants to catch lightning in a bottle. However, in truth, the best way to invest is by employing a buy-and-hold strategy. Rather than trying to find quick wins, it's better to look for long-term trends, and then invest in companies that can benefit from those trends for years to come.
With that in mind, here are two stocks that are currently breaking out, but are also likely to enjoy lengthy bull runs in the coming years: Intel (INTC 0.46%) and Alphabet (GOOG 1.75%).
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1. Intel
When it comes to Intel, investors must understand that the company is in the middle of a turnaround. True, its revenue has plunged from $79 billion in 2021 to $54 billion over the last 12 months. Nevertheless, shares of the chipmaker have soared this year, with the stock logging a total return of 37%.
Yet, what has the market excited -- and what makes Intel worth owning for the long term -- is the company's roadmap for the future. In short, Intel is investing in new production facilities and focusing on the lucrative artificial intelligence (AI) chip market. While its plans will take time -- and a good deal of capital investment -- to come to fruition, they hold immense potential.
At any rate, investors shouldn't write off Intel's ability to compete with artificial intelligence giants like Nvidia and AMD. With the market for AI chips expected to grow by leaps and bounds, there should be more than enough room for Intel to win a lucrative slice of the business.
From a valuation perspective, Intel has already bounced off its long-term lows, so the stock is no longer a historic bargain. Shares trade at a price-to-earnings multiple of 16, slightly above their 10-year average of 14, and well off last year's 10-year low of 6. However, investors willing to hold on through Intel's lengthy turnaround project stand to benefit.
2. Alphabet
Alphabet is no small fish. It's already the third-largest U.S. company, with a staggering market cap of $1.7 trillion.
Yet there remains ample room for Alphabet to grow. The company is a digital advertising giant that has generated close to $290 billion in revenue over the last 12 months alone. It boasts iconic digital brands like Google Search, YouTube, and Google Chrome, among others. What's more, Alphabet's cloud services segment is a growing powerhouse in its own right, having generated $8 billion in revenue in the second quarter. In addition, that segment grew at an eye-popping rate of 28% year over year.
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Moreover, the consensus forecast among analysts is that Alphabet will grow its sales by 11% next year and its earnings by 18%. As for its valuation, Alphabet trades at a price-to-earnings ratio of 28 -- right around its 10-year average of 30. That means that investors -- historically speaking -- are paying a typical price for Alphabet shares today. However, given the company's legendary brands and sales projections, I think growth investors would be wise to consider Alphabet worth owning for many years to come.
