Whatever their investing style -- growth, value, income, or other -- everyone loves beating the market. However, doing so over a relatively long period is no easy feat. That's why hedge fund managers who consistently pull it off become big names on Wall Street.
The good news is that even average investors who aren't paid to pick stocks can still beat the market. To help you achieve that, let's discuss two corporations that might deliver above-average returns through 2031: Intuitive Surgical (ISRG +0.53%) and Meta Platforms (META 2.60%).
Image source: Getty Images.
1. Intuitive Surgical
In fairness, Intuitive Surgical hasn't had a great past 12 months. Increased tariffs are affecting its financial results, and competition in its robotic-assisted surgery (RAS) niche, which it dominates, is intensifying. However, several things could drive Intuitive Surgical's stock much higher in the next few years. One of them is the launch of the newest version of its da Vinci system, which is now in its fifth iteration. Each has been better than the last, and this time is no different.
One key new feature of the latest da Vinci system is Force Feedback Technology, which enables surgeons to have a better sense of the pressure they are exerting on patients' tissue during procedures, allowing them to make adjustments as needed to avoid damage and trauma.
This could lead to even better outcomes for patients, something that will help increase demand for the company's technology, both from healthcare providers and consumers. This da Vinci system is still new -- it was only launched last year and has been well-received. We're still in the early innings of this story, though.
Another important growth driver for Intuitive Surgical should be approvals across newer indications, which help boost its procedure volume, an important driver of revenue growth. Intuitive Surgical recently announced three new approvals for one of its da Vinci systems.
NASDAQ: ISRG
Key Data Points
That's all well and good, but can the company address its challenges? It can, and doing so may jolt its stock. Tariffs pose dangers, including increased costs, lower profits, and narrower margins. Intuitive Surgical could get around that problem in several ways, most notably by increasing its prices. The company benefits from pricing power due to its best-in-class devices, which have been proven to improve patient outcomes.
With a large installed base, relatively modest price hikes across the board could have a meaningful effect. If the threat of tariffs persists, my view is that Intuitive Surgical will eventually adopt a multipronged approach to addressing it, including leveraging its pricing power.
What about competition? Medtronic, a medical device leader, recently earned approval in the U.S. for its Hugo system in urologic procedures, but it will likely take years before it poses a significant challenge to Intuitive Surgical.
Besides, since the RAS market is underpenetrated, there is room for multiple winners. Therefore, Intuitive Surgical's outlook is robust and could enable it to outperform broader equities through 2031.
2. Meta Platforms
Meta Platforms' shares recently dropped after it released its third-quarter earnings. Its results were fairly strong, but the market is increasingly worried that Meta's huge investments in artificial intelligence (AI) -- where it is planning to pour even more funds -- may not pay off. However, the company's work in AI has made meaningful contributions so far. Between Meta Platforms' AI-powered algorithms boosting engagement across its websites and apps, and the company's AI-based efforts to automate much of the ad launch process, revenue and earnings have been growing rapidly.
Meta Platforms has even bigger ambitions. The company wants to completely automate ad campaigns by the end of 2026, for instance. Given the tech leader's large ecosystem of more than 3 billion daily active users, its efforts should continue paying off.
NASDAQ: META
Key Data Points
But what if they don't match the level of investments the company is making? It's worth noting that something like this has happened before. Meta Platforms got its current name partly due to its then-focus on building and monetizing the metaverse, an ambition that never quite materialized, at least not anywhere near the level management had hoped.
When faced with mounting expenses and declining revenue growth, partly due to its metaverse investments and broader economic challenges, Meta Platforms was able to rein in costs, refocus on its highly profitable advertising business, and ultimately emerge as a stronger company. In other words, the corporation has enough flexibility to handle the kind of challenging situation the market fears will happen in a few years.
Meanwhile, its financial results should remain robust, driving its stock price higher. These are all good reasons that Meta Platforms can beat the market through 2031.
