Over the past decade, the tech-heavy Nasdaq Composite has run circles around the two other major U.S. market indexes. That suggests that some of the best growth stocks to buy and hold, at least over the past 10 years, were in the tech sector. Indeed, tech leaders such as Meta Platforms (META 1.09%) and Netflix (NFLX +0.39%) delivered strong returns over this period. And the best part: Both stocks still have what it takes to beat the market through 2036. Here is why Meta Platforms and Netflix are still worth investing in.
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1. Meta Platforms
It's hard to find a company with an ecosystem of users as deep as that of Meta Platforms. The company boasts 3.58 billion daily active users across its social media platforms. Meta makes most of its money from advertising. And in the next decade, the company's business should remain centered around that. Meta Platforms' benefits from deep network effects across its social media empire, making it challenging for any competitor to steal most of its users. Meanwhile, the tech giant is still growing engagement on its apps, largely thanks to artificial intelligence (AI)-powered algorithms.
NASDAQ: META
Key Data Points
Meta Platforms is also helping advertisers with a host of AI tools that make it easier to create campaigns (from defining a target audience to generating images and measuring performance). A deeper, more engaged user base and better, more effective ad campaigns should lead to consistent revenue and earnings growth for Meta Platforms through the next decade. The company could also slowly ramp up other growth opportunities. Meta Platforms' significant investments in AI could pay off beyond its impact on its advertising business, perhaps through paid subscriptions, AI-powered commerce, and more. In short, the company is well-positioned to ride the AI tailwind and, once again, beat the market over the next 10 years.
2. Netflix
Although a lot has changed for Netflix over the past decade, at least one thing hasn't: The company's goal to replace cable television. It has made significant progress, but there is more work to be done. According to some data, streaming accounted for 47% of TV viewing time in the U.S. in January. The industry is less penetrated in many other countries. So, the global opportunities for Netflix remain massive, especially given that it now has an ad-supported tier with rapidly growing ad sales.
NASDAQ: NFLX
Key Data Points
Can Netflix still dominate streaming, even as the industry has become far more competitive? Yes, it can. The company's brand-name and time-tested strategy of creating outstanding content should help it attract more viewers while increasing engagement among its existing ones. Netflix will also benefit from entering new markets. The company is making a push into long-form video podcasts, which should cost less than original TV and movies while still delivering on engagement.
Netflix is also slowly entering the world of sports streaming, another niche that could attract plenty of new eyeballs to the company's ecosystem. For those reasons (and many more), my view is that Netflix hasn't peaked yet. The company's prospects through 2036 look bright.
Editor's note: An earlier version of this story listed an incorrect figure for daily active users of Meta Platforms social media sites. This version of the file is correct.
