Investing doesn't have to be complicated. Investors who hold shares of growing companies for many years will come out ahead, and some of the best investments are in companies that provide services that people use every day.
Here are two top stocks that could make you richer over the next 20 years.
1. Amazon
Amazon has dominated the e-commerce market over the last few decades, and it continues to get stronger. The company's burgeoning opportunities in enterprise cloud services, artificial intelligence (AI), and global e-commerce should continue to drive profitable growth for shareholders. The stock has already hit new all-time highs this year, and it has room to run.
NASDAQ: AMZN
Key Data Points
Many companies are scrambling to adopt AI to reduce costs and boost employee productivity -- and that presents a huge opportunity for Amazon Web Services (AWS), the world's leading cloud infrastructure provider.
AWS comprises just 18% of Amazon's total revenue, but it could grow into a much larger percentage of Amazon's business over time. That segment reported year-over-year revenue growth of 17% in the first quarter -- an acceleration over the previous quarter's 13% growth, which highlights the size of the opportunity.
Meanwhile, Amazon continues to squeeze more profit out of its online retail business and also pave the way for further international expansion. It is continuing to introduce more Prime benefits and fast-delivery options for international customers, including those in major cities like Tokyo, London, and Toronto. The global e-commerce market is a growing multitrillion-dollar opportunity that Amazon will be pursuing for decades. The opportunity is that massive.
Over the next few years, improving retail margins and cloud growth will be key drivers of the stock's performance. Wall Street analysts expect the company's earnings per share to roughly double within the next three years, which could send the shares significantly higher. Beyond that, the long runways of growth potential in e-commerce and cloud computing make Amazon a no-brainer stock to hold for decades.
2. MercadoLibre
Latin America has one of the largest and fastest-growing e-commerce markets in the world, but many people in the region lack access to bank accounts, which limits their ability to make digital payments and shop online. That's a huge opportunity for the region's leading fintech and e-commerce company: MercadoLibre (MELI +1.85%).
Over the last 10 years, its shares delivered a cumulative return of 1,600% as it worked to address its market's growing need for financial services, especially mobile payments. It primarily generates revenue from marketplace services and product sales, fees on fintech products such as credit card and debit transactions, and commissions from mobile payments.
NASDAQ: MELI
Key Data Points
In financial services, MercadoLibre is the Latin American counterpart to eBay and PayPal in the U.S., but it's growing much faster. It's estimated that about 70% of the population in Latin America lacks access to a bank account. That creates a huge opportunity for MercadoLibre in the fintech space, which in part explains how the company has delivered robust revenue growth and shareholder returns so far, and indicates why it should continue to do so for many years.
Revenue almost doubled year over year in the first quarter to $4.3 billion. MercadoLibre continues to see strong double-digit percentage growth in active users. Unique active buyers in its marketplace business grew by 16% year over year to 53.5 million, while the number of fintech monthly active users grew 37% to 49 million.
MercadoLibre has multiple levers to drive revenue growth and active users, such as expanding the number of financial services available and bringing new advertisers to the platform. It also recently took another page out of Amazon's playbook, rolling out a loyalty program that offers users free shipping and other benefits.
The stock is trading 20% below its peak from a few years ago, but the share price has risen 86% since bottoming out in 2022. The stock should move back toward its previous highs as the company improves its margins and grows earnings per share. The shares are trading at their lowest price-to-sales ratio in more than a decade, which indicates that they're a screaming buy.
