If you’re willing to give promising companies some time to prove their might, you don’t have to invest big sums in order to enjoy great returns. A $1,000 investment in Microsoft made 10 years ago would be worth roughly $14,000 based on today’s stock price and dividends paid across the period. That same $1,000 invested in Amazon 10 years ago would now be worth more than $16,000.
Not every stock that you put your money behind will go on to be a market-crushing success, but the good news is that it only takes a few big winners to push your portfolio to very strong gains. With that in mind, read on for a look at two market-leading technology companies that have what it takes to serve up incredible performance over the next decade.
Airbnb (NASDAQ:ABNB) was one of last year’s most-hyped IPOs. Despite surging in early trading, the tech company’s stock hasn’t moved much from the price it closed at on the day of its market debut. While pandemic-related developments suggest that Airbnb could see volatile trading in conjunction with associated political and economic conditions, the stock has great prospects over the long term.
The company offers property owners an easy way to monetize their space and a convenient way for travelers to book short- and long-term stays. Meanwhile, the service offers travelers options for finding local accommodations that offer greater degrees of personalization, comfort, and pricing flexibility. As more travelers join the platform, there are more incentives for new hosts to get on board and expand their offerings, and this cycle looks poised to help the company continue expanding at an impressive clip.
The vacation rental company is already squarely in large-cap territory, with a market capitalization of roughly $92 billion, and it’s managed to build a leadership position in the travel services industry. However, if the company’s current size raises concerns about whether Airbnb still has room left for big growth, you can probably set those concerns aside. The company is already well established, but it’s also still just scratching the surface of a huge addressable market.
The broader vacation rental space still has a very favorable long-term outlook, and work-from-home and digital-nomad trends are reshaping the broader rental and hospitality industries. Airbnb is also expanding into other service opportunities, including guided tours and local event ticket sales, and these new offerings are helping the company boost average spending per booking. Through it all, Airbnb is quickly becoming much more than just a travel company, and the stock offers an attractive risk-reward dynamic at current prices.
Zynga (NASDAQ:ZNGA) is a leading publisher in the mobile video games space, and it stands out as a top stock for investors looking to benefit from the ongoing growth of interactive entertainment. The video game industry has already seen incredible growth over the last couple of decades, but it’s likely that it will continue to expand at a rapid clip, and there’s a good chance that top publishers will deliver strong returns for shareholders.
Zynga started out with popular franchises including FarmVille, Mafia Wars, and Words With Friends, which players typically accessed through a gaming portal through Facebook‘s social network. However, the company moved away from Facebook’s ecosystem after it became clear that in-app downloads rather than browser-based distribution was the future of gaming on smartphones and tablets. It’s since reinvented itself through a successful pivot to mobile and an acquisition spree that has added a variety of new franchises and development teams to the company.
The gaming specialist has repeatedly demonstrated that it can deliver the content and gameplay experiences needed to keep players engaged and prolong the product lifecycles of core franchises, and it’s in a great position to take advantage of industry tailwinds through the next decade and beyond.
Increased adoption and availability for powerful mobile hardware and high-performance internet service connections will continue to help expand the worldwide audience for interactive entertainment, and the growth of the global middle class should create tailwinds that boost average spending per user.
Zynga’s share price is down roughly 18% after the company’s second-quarter results arrived with bookings that fell short of the market’s expectations and full-year guidance that also underwhelmed analysts and investors, but the recent pullback has made the stock even more attractive. The company is still primed to thrive over the long term, and investors should take advantage of the opportunity to build a position in the stock at a discount.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
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