Let’s be honest: When many of us buy a growth stock these days, we’re interested in holding it only as long as the hype keeps it moving firmly higher. If the buzz fades, so does our interest. And, surprisingly often, that’s not a bad approach.
There are growth stocks out there, however, that are reliable to stick with for the long haul even if they lose some buzz. Here’s a closer look at four of the best. It’s no coincidence that all of them are technology stocks. Technology, after all, is now the backbone of nearly every aspect of our culture.
Alphabet (NASDAQ:GOOGL) (NASDAQ:GOOG) operates the planet’s two most important gateways to the world wide web. First, it’s the parent to search engine Google, which according to Statcounter handles more than 90% of the world’s internet searches. And second, Statcounter further says Alphabet’s Android operating system is installed on 70% of the world’s web-connected devices.
Both market share measures have held steady near those levels for years now, too. That’s the reason Alphabet has only seen its quarterly revenue fall twice on a year-over-year basis in the past 15 years, and why year-over-year operating profits almost never slip (and only barely, and always temporarily) during that same time frame. It somehow seems unlikely either is going to shrink anytime in the foreseeable future, as people would have to start using the web less and put down their smartphones for that to happen!
2. Palo Alto Networks
If cybercrime hasn’t personally impacted you yet, give it time — it’s coming sooner or later. The Identity Theft Resource Center reports there have been 1,291 data breaches this year through the third quarter of the year, exposing the personal information of 160 million people in the third quarter alone. That puts the planet on pace to break a dubious full-year record. These breaches aren’t cheap, either, with each one costing those victimized organizations several million dollars apiece.
And that’s just the direct cost. It’s much more difficult to measure less obvious but arguably steeper costs like damaged reputations and distrust. Indeed, the World Economic Forum’s 2020 report on worldwide risks to global commerce puts cybercrime and data theft right up there with global warming, water scarcity, and war.
Enter Palo Alto Networks (NASDAQ:PANW), which offers a suite of solutions that protect the world’s computer networks and the troves of digital data being stored on them. From firewalls to secure cloud connectivity to threat detection to ransomware defense, Palo Alto supplies complete, turn-key solutions to companies that simply want to delegate cybersecurity duties to better-equipped third parties. It’s the crux of the reason the company has been able to grow its top line every quarter since 2013, sequentially as well as on a year-over-year basis.
There’s no reason to expect that growth trend to reverse course, either. Market research outfit Cybersecurity Ventures estimates that spending on defense against hacking, data breaches, and other cybercrime will swell from $6 trillion this year to more than $10 trillion per year as soon as 2025.
You may know it as a video game hardware name. And Nvidia (NASDAQ:NVDA) is still that, to be sure. It’s not just a video gaming outfit anymore, however. In fact, its nongaming operation could soon be its biggest business by far.
That’s data centers, by the way, and artificial intelligence hardware in particular.
Of last quarter’s $7.1 billion revenue, more than $2.9 billion of it came from sales made to data center owners, up 55% year over year. That’s still a bit shy of gaming revenue of more than $3.2 billion for the same three-month stretch in question, but data center sales have been growing at a much faster clip. It will soon consistently be the bigger arm.
Its reach within the artificial intelligence hardware market has a lot to do with that. As it turns out, the same basic tech that makes graphics cards work is well suited for all the number-crunching involved in AI development. That’s why the company’s hardware accounts for 80% of the world’s investment in artificial intelligence processors, according to technology market research outfit Omdia. Current levels of AI spending only scratch the surface, however. IDC forecasts that this year’s likely $342 billion spend on artificial intelligence will swell to exceed $500 billion by 2024, accelerating en route.
4. Intuitive Surgical
Finally, add Intuitive Surgical (NASDAQ:ISRG) to your list of growth stocks to buy and hold forever.
Technically speaking, it’s a healthcare name, though just barely. Intuitive Surgical makes the robotic surgery device called the da Vinci, which has handled over 8.5 million operations since launching just a couple of decades ago.
The device hasn’t been without its controversy. The da Vinci surgery assistant has been implicated in some injuries, to be specific. Some surgeons — as well as patients — are also wary of change and still prefer the old way of handling procedures by hand.
The fact of the matter is, though, the surgical robot is gaining ground as more people learn about its potential. Last year’s pandemic-crimped revenue was the first time Intuitive Surgical’s quarterly revenue fell on a year-over-year basis since 2014, and that lull’s already been offset. Last quarter’s record-breaking top line of $5.5 billion was better than Q2’s sales of nearly $5.2 billion, which was also a record-breaker. Analysts expect more of the same sort of progress going forward, too, modeling revenue growth of 13% in the coming year to match the pace of growth in place ever since the da Vinci debuted.
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.