Got a little money and a lot of time? Say, 10 years or more? That's perfect. Time is an investor's best friend, and of course, the more capital you've got to deploy, the bigger your potential net return gets. And if you've got at least a decade to work with, you've got time to take a shot on some relatively volatile but potentially revolutionary investment prospects.
With that as the backdrop, here's a rundown of three monster stocks to buy and hold for 10 years, if not longer. Notice that each of them isn't just in a whole new kind of business. They're largely driving the formation of their respective industries.
Uber Technologies
A decade ago, the idea of connecting a stranger who needed a ride with another stranger willing to give them one (using the driver's own vehicle, no less) didn't just seem unmarketable. It seemed outrageous. As it turns out, however, the ride-hailing business was a brilliant idea driven by a major sociocultural movement that wouldn't become clear until several years later.
In short, people are decreasingly interested in driving or even owning their own automobile. Figures from the Federal Highway Administration indicate that the number of 19-year-olds with a driver's license in the United States has fallen from over 87% in 1983 to under 69% as of 2022. And the difference is even starker the younger the teen. Fewer than 40% of eligible teenagers living in the United States hold a driver's license, for perspective, versus about two-thirds of this group three decades ago.
In a similar vein, a recent survey taken by Deloitte suggests that while only 11% of U.S. residents aged 55 and up would consider giving up their car, 44% of people under the age of 35 would at least be willing to entertain the idea, given their willingness to use other modes of transportation.
Connect the dots. Younger consumers are more comfortable with new ways of doing things. As they age, they'll further normalize this alternate mode of mobility.
Enter Uber Technologies (UBER +0.49%), which dominates the domestic ride-hailing business but has also set up shop overseas where the same growing disinterest in driving and vehicle ownership is evident. Last year's top-line growth of 18% to $44 billion extends a long-standing trend that's expected to persist at this pace for at least a few more years.
Data source: StockAnalysis.com. Chart by author.
However, this growth trend will likely last for longer than just a few more years. Market research outfit Coherent Market Insights believes the global ride-hailing market is set to grow at an annualized pace of 13.5% through 2032. As a market leader, Uber is well-positioned to capture its fair share of this long-term growth. That is why the stock's lethargic performance since early last year is a buying opportunity.
NYSE: UBER
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Recursion Pharmaceuticals
Given the strides made by artificial intelligence just within the past few years, most investors would likely agree that it's only a matter of time before AI is being used to create new drugs. What most people might not realize, however, is that it's already happening. A company called Recursion Pharmaceuticals (RXRX +3.80%) currently uses such a developmental tool as well as offers it to third-party pharmaceutical companies.
It's called Recursion OS. Like any other ordinary LLM (large language model) AI platform, this one can sift through a massive amount of digital data and then combine contextually relevant information. It can then determine how a new therapeutic molecule might be assembled and then test how it might work as a treatment for a particular disease.
This approach's chief advantages over more conventional forms of drug research are ones you might guess: speed and cost. Whereas traditional pharma R&D work might require several years and hundreds of millions of dollars just to complete a trial that ends in failure, AI-based testing can be virtually completed for a fraction of the cost in a matter of weeks, if not days. This means the pharmaceutical industry can afford to take more swings, even knowing that most of them might end in failure.
NASDAQ: RXRX
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Recursion's business is double-barreled, to be clear. Not only is it sharing revenue-bearing access to its platform with third-party drug companies that currently include Roche, Bayer, and Sanofi, but it's also working on some of its own stuff. All told, nearly a dozen drugs conceived and digitally tested within Recursion OS are now in actual, required clinical trials. Others were weeded out before wasting time and money on clinical testing.
That's still just the beginning, however. Global Market Insights expects the AI-powered drug discovery business to grow at an average annual rate of almost 30% between now and 2032. Recursion Pharmaceuticals is currently unprofitable. Given the industrywide tailwind, though, a swing to profitability could easily be in the cards within the next 10 years, catapulting this stock as a result.
IonQ
Finally, add IonQ (IONQ +0.09%) to your list of prospects that could dish out monster-sized returns over the course of the coming decade. You're probably familiar with how traditional computing devices -- like the one you're using right now -- work. A massive amount of digital information is racing around a computer chip, being translated into a form you can see and interact with comfortably.
As impressive as this technology may be, however, this tech's underlying binary code consisting of nothing but digital ones and zeros has actually become a bit limiting. There's a much more powerful option. By using subatomic particles as its basis, a so-called quantum computer can handle a massive amount of data. With quantum computing, in fact, calculations that might take a traditional computer decades to complete can now be done in a matter of minutes.
This speed, of course, has major implications for industries like artificial intelligence, cybersecurity, and even the aforementioned drug discovery, just to name a few.
NYSE: IONQ
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There is the not-so-small matter of practicality and cost. Such platforms are overkill for everyday web browsing, for instance, while purchasing one for heavy-duty number-crunching could easily cost hundreds of thousands of dollars, if not more. Even just renting cloud-based access to a quantum computer can cost $50 per minute.
For the right purpose, though, plenty of institutions can come up with that kind of money, like the U.S. Air Force, the city of Busan (Korea), and the Applied Research Laboratory for Intelligence and Security (or ARLIS). All three organizations -- along with several others -- are now test-driving IonQ's tech to figure out how to best leverage this powerful new computing option. The company did $43 million worth of business last year, in fact, up 95% from 2023's top line.
But this still only scratches the surface. Precedence Research predicts that the worldwide quantum computing industry will see compound annualized growth of 31% through 2034, making the next 10 years incredibly exciting for one of the (very) few "pure plays" in the business.
