The tech sector is known for its volatile market action and tendency to deliver strong long-term returns. There are also many failed growth stories and burned-out trends along the way, but the big winners have more than made up for those disappointments. Industry giants like Microsoft (MSFT +0.53%) and Apple (AAPL 0.80%) have made lots of millionaires over the last four decades, and now investors are looking for the next game-changing champion in the same mold.
I'm here to show you a couple of tech stocks that could fill that promise in the long run. A modest investment in MicroStrategy (MSTR 1.58%) or Roku (ROKU +0.43%) could make you millions over the next couple of decades.
Neither one of these companies will have an easy path to that wealth-building future, of course. There are economic challenges and hungry rivals everywhere, and many things can go wrong. But if they play their cards right, these stocks are poised for market-beating returns and decades of shareholder-friendly success.
So the two names mentioned above are some of my favorite tech stocks to buy today and hold for the long haul. Here's how.
NASDAQ: MSTR
Key Data Points
MicroStrategy's massive Bitcoin bet could fuel a future software empire
It's no secret that an investment in MicroStrategy is a pretty direct bet on Bitcoin (BTC +0.78%).
The company owns more of the largest digital currency than almost any other company, according to BitcoinTreasuries.net. The only exception is the iShares Bitcoin Trust ETF (IBIT +1.19%), which is the largest spot Bitcoin ETF on the market. MicroStrategy has bought 252,220 Bitcoins so far, and keeps adding to that total every time chairman Michael Saylor can get his hands on some more cash.
That may not sound like much of a tech stock at first blush. However, Saylor and MicroStrategy have been around for decades, building a respectable suite of enterprise-class data analytics tools. Right now, the aggressive Bitcoin strategy could lay the foundation for epic long-term growth in the software business.
If Saylor's rosy analysis of Bitcoin's future pricing prospects turns out to be correct -- or at least in the right ballpark -- MicroStrategy would soon have a cash reserve rivaling that of Apple or Microsoft. Saylor's lofty price target of $13 million per coin by 2045 would make the company's current Bitcoin reserves worth nearly $3.3 trillion, not counting any additional Bitcoin buys. Not even Apple can compete with that financial platform today.
In the tech sector, deep pockets can buy you top-notch engineers and expensive innovation projects. So MicroStrategy is a Bitcoin play today, potentially evolving into a software giant in the long run.
NASDAQ: ROKU
Key Data Points
Roku's rock-bottom valuation spells opportunity
Cord-cutting isn't a new trend, but it's here to stay. Media-streaming services are taking over the entertainment industry from the old cable, satellite, and broadcast platforms.
Roku was one of the first players on the hardware and software side of this compelling growth story, and remains a leader today. A recent Pixalate report shows that Roku-powered devices hold a 48% share of the connected devices market in North America.
And if you think Roku will run out of growth prospects as the U.S. and Canada media markets become saturated with digital streaming platforms -- think again. It's a big world out there and Roku has barely started to explore the foreign business prospects.
Checking up on Roku's financial filings, you'll find that international markets have never produced more than 10% of Roku's total revenues in any given year. In other words, the greenfield growth opportunity is massive.
The lessons learned in North America should help Roku conquer the digital media world at large. That has turned out to be a plan of game-changing effectivity in the past. If you invested $4,000 in Netflix (NFLX 0.38%) 20 years ago, you'd have more than $1.1 million today. Roku is exploring a similar international growth avenue, and is only getting started.
At the same time, bears are focused on weak digital advertising sales in recent years, and Roku's stock is trading at the bargain-bin valuation ratio of 2.9 times sales. The low price makes it easier to build a Roku position of game-changing proportions.
I'm not saying that $4,000 invested in Roku today will make you a million dollars by 2044, but any reasonable combination of a solid starting investment and many years of stoic patience should do the job. Long story short, Roku is my favorite stock to buy in the fall of 2024.
