All investors would love to get rich overnight. As anyone who's been in the market for a while can attest, however, that's just not how things work. Growing wealth takes time. And, the more time you're willing and able to give your picks, the better your returns tend to be.
With that as the backdrop, here's a closer look at three stocks that are not only solid long-term prospects. Granted, they will require lengthy holding periods to reach their full potential and pay off in full. This, of course, means taking the risk of stepping into a name with a future that's still a bit fuzzy and far from guaranteed. If things pan out the way they appear to, though, this risk will be well worth it.
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1. CRISPR Therapeutics
The premise of repairing damaged or faulty DNA has long been on the healthcare industry's mind. It didn't become a commercial reality, however, until late 2023, when CRISPR Therapeutics' (CRSP 2.49%) Casgevy became the first-ever FDA-approved gene therapy. Although it's only approved to treat sickle cell disease, it's a tacit but important validation of the underlying science.
NASDAQ: CRSP
Key Data Points
That science is the use of the clustered regularly interspaced short palindromic repeats -- or CRISPR -- found in human DNA to cut out damaged genetic code and then replace it with the correct one. Or, more specifically, removing a segment of faulty DNA forces the body to use its own self-repair process to create a permanent, healthy fix.
The idea has near-term promise as the basis for treating diabetes and autoimmune diseases, as well as for cardiovascular diseases -- all of which CRISPR Therapeutics is working on in clinical trials now underway. Further down the road, though, this approach could conceivably be refined to treat cancer, Alzheimer's, muscular dystrophy, and more. That's why Precedence Research believes the global CRISPR therapy market is poised to grow at an average annualized pace of nearly 17% through 2034.
Given that one of the company's co-founders (Emmanuelle Charpentier, Ph.D.) won a Nobel Prize in 2020 for her discovery and creation of this CRISPR-based approach to gene editing, it's not a stretch to suggest CRISPR Therapeutics itself is very well positioned to capture at least its fair share of the medical science's future growth.
Just understand that medical science moves incredibly slowly, requiring a long-term mindset from investors.
This might put things in perspective, as well as help you stick with it in the meantime: Although Casgevy was approved as a treatment for sickle cell a little over two years ago, its revenue isn't expected to truly explode until next year, ramping up from this year's projection of just a few million dollars to a little over $100 million next year to nearly $300 million after that. By then, progress on fronts other than sickle cell disease should start driving the stock on a more consistent basis.
2. Astera Labs
To date, Broadcom has been one of the big names other than Nvidia to soar thanks to the advent of artificial intelligence (AI). Nvidia makes the computing processors used in most AI data centers. Broadcom then provides the technology that connects them to turn them into a true neural network.
As is so often the case, though, smaller and newer competitors watched what Broadcom did to become the dominant name in this sliver of the AI business, and then figured out a way to do it better.
Astera Labs (ALAB 2.20%) is one of those smaller and newer competitors. It makes a range of interconnectivity solutions purpose-built for artificial intelligence data centers. For instance, its Aries line of PCIe Smart Gearboxes allows data center owners/operators to connect next-generation processors with previous-generation motherboards, extending the useful life of the latter while allowing the utilization of the former.
At the same time, Astera's Leo CXL Smart Memory Controllers are "the industry's first purpose-built solution that supports both memory expansion and memory pooling," according to the company's website, offering access to memory in a way that gets the most out of an artificial intelligence platform, and inference platforms in particular.
Priced at nearly 90 times this year's projected profits of $1.78 per share, Astera Labs stock isn't cheap. That's the chief reason the stock's peeled back so much from its September peak, outpacing the overall market's weakness for this time frame.
NASDAQ: ALAB
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Just take a step back and see the bigger picture. After more than doubling this year, analysts are calling for revenue growth of more than 40% next year, driving per-share profits up from $1.78 to $2.37 as a result. This is likely just a glimpse of the kind of demand we're going to see for specialized AI interconnectivity solutions for a long, long while.
3. Alibaba
Finally, add Alibaba Group (BABA +0.18%) to your list of brilliant growth stocks to buy and hold for the long haul.
It's an addition that might surprise some investors who have kept loose tabs on the company. Although no one denies it dominates China's e-commerce market, it's a market that's as saturated as it is mature. It's also running into an economic headwind.
For perspective, the country's retail sales only grew 1.3% in November, slowing from October's pace of 2.9%, as well as falling short of estimates for growth of 2.8%. Concern isn't entirely unmerited.
NYSE: BABA
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Except that e-commerce isn't going to be Alibaba's big growth engine for the foreseeable future. It's going to be artificial intelligence. In August, the company unveiled an AI processor chip that's surprisingly competitive with Nvidia's powerful H2O processors designed for overseas customers. Less than a month later, it had already lined up its first customer: telecom giant China Unicom. More are sure to be in the works, too.
It's not just powerful AI processors, though. Unlike many of the Western Hemisphere's hardware makers and software companies, Alibaba jointly brings both to the table, with a deep lineup of open-source software offerings that work well with its conventional cloud computing service and its home-grown artificial intelligence model called Qwen. Indeed, just last month, the company introduced its consumer-oriented chat-based AI assistant Qwen App. It's yet another way Alibaba is widening its digital ecosystem's net, even if it doesn't yet know exactly how it's going to monetize every aspect of this deep reach.
It matters simply because China's artificial intelligence industry is apt to grow there, like other AI platforms are growing elsewhere. Morgan Stanley expects the country's AI industry will be worth $140 billion by 2030, while Goldman Sachs believes more than 30% of China's corporations will be utilizing some sort of artificial intelligence tech by the end of the same time frame. Alibaba is readier than any other to help make that happen.
