The year 2030 seems like a long way away, but six years flies by in the world of investing. And investors who can think out until 2030 or further have a leg up on Wall Street's typical short-term focus of a few weeks or quarters.
Looking out to the next decade, there are three growth stocks that I think will be growth machines and they include Spotify Technology (SPOT +1.27%), MGM Resorts International (MGM +1.10%), and Peloton Interactive (PTON 1.46%).
NYSE: SPOT
Key Data Points
The audio platform and a growth machine
Spotify is becoming the go-to platform for audio content from music to podcasts. The company had an uphill battle against Apple and big tech giants like Amazon and Alphabet in building an audio business, but it's clear the focus on audio is paying off. Over the past five years, revenue more than doubled and the user base is now 574 million people, including 226 million who pay for Spotify Premium every month.
SPOT Revenue (Quarterly) data by YCharts
The advantage Spotify has over these competitors is its role as a horizontal services company. The focus on music means Spotify can be played on a variety of devices, which not all competitors are able to do as seamlessly. That's why Spotify has gained market share over big tech rivals.
In 2024, Spotify will benefit from a price increase, lower operating costs, and improved advertising revenue. I think Spotify could be the surprise winner of not only 2024, but this decade in tech.
Betting on entertainment destinations
The world has changed a lot in the last decade with the growth of working from home and more internet-enabled companies. That puts more emphasis on locations people can meet and mingle with one another, whether that's for business or fun.
I think the growth trend here will be in destinations like Las Vegas, Macao, and soon Osaka, Japan. These are all casino locations for MGM Resorts. The company owns about half of the Las Vegas Strip, has two resorts in Macao, and will open a massive casino in Osaka around 2030.
MGM Revenue (TTM) data by YCharts
MGM's financials are steady, too, because Las Vegas and Macao are now in a cash-generation cycle after decades of investing in new resorts. If the Japanese casino market is as big as MGM hopes, this could be a very successful stock in the long term.
A fitness revolution
Peloton could be a juggernaut in fitness by 2030. The company pivoted from being a premium bike company to a fitness-as-a-service model in 2023, offering lower-priced app subscriptions that can be used on any device and over a dozen types of workouts. It's the Netflix "content for everyone" model, but for fitness.
What's not clear is whether or not the fitness market is big enough to support a streaming-only company. By 2030, we'll have that answer.
NASDAQ: PTON
Key Data Points
I think Peloton could grow from about 3 million subscribers today to over 10 million by the end of the decade and if that's the case this could be a growth machine, leveraging the cost to film classes over and over again.
No other fitness company has built this scale in streaming content and Peloton could be the dominant fitness platform as a result.
Opportunities for 2030
Spotify, MGM, and Peloton all have massive markets to grow into over the next decade and I think their financials will continue to improve with more scale. That's what will make them great growth stocks to own through 2030 and beyond.
