Most of the time, a stock that's worth owning for any length of time is worth owning forever. Every now and then, though, an opportunity with an expiration date comes along. That's not to say these companies won't be able to thrive after a wave of above-average growth has run its course. It's simply to say that once it has, it wouldn't be wrong to question whether or not that holding is the best continued use of your investment capital.
With that as the backdrop, here's a closer look at three growth stocks you might want to consider buying and then holding for the next 20 years. Oh, it shouldn't take nearly that long for these outfits to begin capitalizing on their respective growth opportunities -- a 20-year time frame simply gives them some time to thrive after their revenue engines are revving at full speed. After 20 years, though, their underlying industries are apt to evolve again, opening the door to other outfits.
Image source: Getty Images.
Shopify operates in a sector with significant growth potential
Amazon isn't just the name within the online shopping arena to beat. It arguably ushered e-commerce into its mainstream existence. As such, it has set the high bar for how it works and what consumers should expect from the industry's service providers.
Like any other business, though, time is driving change with this one. The appeal of an online mall that offers everything has become overwhelming as well as impersonal. Consumers now want to buy from authentic brands they can connect with, which a sprawling e-commerce platform just can't provide.
Enter Shopify (SHOP 2.33%).
NASDAQ: SHOP
Key Data Points
Even as far back as its launch in 2006, the e-commerce landscape was changing. Although Amazon would still maintain its dominating growth for the next couple of decades, the need for small businesses to establish and maintain their own online stores outside of Amazon's ecosystem was becoming clear. Now millions of merchants do so using Shopify's technology, custom-designing their consumer-facing experiences to tell their brand's story. During the third quarter of this year, Shopify's platform facilitated the sale of $92 billion worth of goods and services, up 32% year over year to extend a well-established growth streak.
This is still just the beginning, though. Market research outfit IMARC Group expects the global direct-to-consumer industry that Shopify serves to grow at an average annualized pace of more than 17% through 2033, led by the North American market, where Shopify is the top technological choice for establishing a homegrown e-commerce presence.
Nano Nuclear Energy is riding a revival wave
Five years ago, the idea of small-scale nuclear reactors generating power right where it's being consumed might have been laughable to most investors. Now it's only a matter of time before it happens.
To date, NuScale Power has been the odds-on favorite for being the first to complete a so-called small modular reactor (or SMR) and start it up, by virtue of being the only company with an SMR design that's been approved by the U.S. Nuclear Regulatory Commission. Others are waiting for their certifications, but it can be a lengthy, multiyear process.
Being first doesn't necessarily mean being the best, though, including for investors. Another company called Nano Nuclear Energy (NNE +1.95%) may be investors' better bet for plugging into the revival of nuclear power as an environmentally friendly source of electricity.
With nothing more than a passing glance, the two companies look similar to one another, not to mention similar to other players in the nascent small modular reactor business. If you dig deeper, however, you'll find Nano Nuclear Energy is thinking bigger, as well as more holistically. In addition to small-scale nuclear reactors, it's working on portable nuclear power plants, nuclear fuel development and transportation, and even space-based nuclear power solutions for when man colonizes the moon or even Mars.
The stumbling block with Nano Nuclear is its lack of revenue, and a lack of clarity as to when there will be any, never mind the lack of profits right now. That's why this name is easily the riskiest of the three 20-year picks in focus here.
Sometimes, though, a concept or premise is enough to at least put a stock on your radar if not a small stake in your portfolio.
Just keep in mind that it could take a full 20 years for this name to come to full fruition if that's what's in the cards. That's why you don't want to commit too much capital to it just yet, and also why you'll want to check in on the company's progress on a regular basis.
Astera Labs will benefit from the swelling need for AI
Finally, add Astera Labs (ALAB +1.63%) to your list of monster growth stocks to buy and hold for a couple of decades.
Getting straight to the point, artificial intelligence data centers are dealing with a somewhat unexpected bottleneck. That is, all the connections between hundreds -- if not thousands -- of AI accelerator chips made by the likes of Nvidia aren't keeping up with the digital work now being done by these processors. That's where Astera Labs is focusing its efforts, creating "rack-scale AI infrastructure through purpose-built connectivity solutions."
If it looks and sounds a lot like bigger Broadcom, that's because it is. The smaller company has a competitive advantage, though. That's its technology's ease of use and completeness of its offering. It makes a range of communication chips (including some that simply plug into the PCIe slot you'll find on most ordinary personal computer motherboards and data center boards), as well as the software that manages all of its hardware deployed within a data center's rack.
NASDAQ: ALAB
Key Data Points
This year's projected revenue growth pace of more than 100% isn't expected to be maintained, for the record. It does, however, underscore the swell of demand for next-generation connectivity solutions now that high-performance silicon is outrunning its interconnectivity technology. Moreover, Astera Labs is one of the few small companies in the artificial intelligence infrastructure space that's currently profitable.
Even though the stock's relatively expensive right now at a little more than 100 times this year's projected per-share profit of $1.78, look for its profit margins to widen as the company capitalizes on the average annual 18% growth that Global Market Insights sees for the AI hardware industry through 2034. The stock's small dip from its September peak may be all the discount you're going to see from Astera Labs shares for a while.
