3 tech stocks you can buy and hold for the next decade
Land let’s be honest. A lot of people say their positions in flashy tech companies are meant to be long-term holdings, but it’s really just an effort to make a quick buck. And that’s OK. Any profitable trade is technically a good trade. If you can get in and out at the right time, so be it.
The point is, there are many names of tech that are more than just flash-in-the-pan perspectives and are more suited to holding periods measured in years rather than weeks.
Here’s a closer look at three of these tech companies. Not only will they be as impressive 10 years from now as they are today, but their stocks are expected to trade at much higher prices.
It’s hard to imagine a world without Microsoft (NASDAQ: MSFT). Its Windows operating system is installed on three quarters of desktops and laptops around the world, according to GlobalStats, and its Office productivity software remains the gold standard in the category. SonyPlayStation game console enjoys more global market share than Microsoft’s Xbox, but Xbox bridges the gap and remains the most popular game console in the United States
And these are things that consumers can easily see. There is a whole new line of products made by Microsoft that work just as well. For example, Canalys reports that Microsoft’s cloud computing business accounted for the second-best 19% of global cloud infrastructure spending in the first quarter, and the company continues to close the gap with the market leader. Amazon.
Image source: Getty Images.
Now take a step back and ask a thoughtful, critical question: Is there any chance the world will need less computers, cloud computing, productivity software, or game consoles 10 years from now?
Any reasonable and realistic answer should be “no”. Indeed, it would be surprising if the demand for these products and services were not considerably larger in a decade. As a market leader in several categories, Microsoft can direct the continued growth of the market in any way that works best for it. For example, the Windows operating system comes with trial versions of Office software preinstalled.
The changing business model of the company reinforces the bullish argument for long-term ownership of Microsoft. Access to Azure, Office and even video games can now be used on a monthly subscription basis, accessible through the cloud. This change not only makes the company’s products more affordable to start with, but also gives Microsoft a better chance to retain those customers by making it easier to update and upgrade software.
Last year, the last time Microsoft disclosed such data, it had already recorded more than $ 100 billion in subscription cloud revenue that had not yet been reserved – a number that continues to climb.
Palo Alto Networks
Even after several high-profile cybersecurity blunders embarrassed organizations ranging from Target at Equifax at Yahoo !, some of the world’s biggest companies are still being hacked. More recently, Colonial Pipeline agreed to pay more than $ 4.4 million to a hacking group known as Darkside to regain control of its 5,500 miles of refined oil pipelines.
These things are preventable. They are just not prevented, because too many organizations are not using all the digital defenses at their disposal. Perhaps the Colonial Pipeline debacle will encourage the acquisition of this protection.
Enter Palo Alto Networks (NYSE: PANW). Simply put, Palo Alto offers software that prevents unauthorized access to a company’s network, internal applications, and data. It even has a ransomware protection solution in its lineup that could have saved Colonial Pipeline a few million dollars.
The opportunity is incredible, and should stay that way for a while. P&S Intelligence estimates that the cybersecurity market will grow at an average annual rate of 12.6%, from $ 120 billion in 2019 to $ 434 billion by 2030. That’s a lot, but it’s only ‘a fraction of the $ 10.5 trillion that Cybersecurity Ventures estimates cybercrime will cost the world by 2025 only if companies don’t step up their digital defense games.
Palo Alto is doing well, recording more than seven consecutive years of rising revenues as more and more equipment build their digital moats. Considering the outlook, others of the same kind of growth are in the cards for a while.
International Business Machines
Finally, add International Business Machines (NYSE: IBM) to your list of technological actions to buy and hold for the next decade.
Yes, this is the same IBM that has failed to respond to the advent of things like cloud computing, mobile devices and everything that goes with both. The company’s “strategic imperatives” plan unveiled in 2015 aimed to move the business away from a legacy mainframe business that was already dying and toward more contemporary opportunities like the aforementioned cloud and mobile security. Overall, however, it was too little too late.
The IBM of today, however, is not the IBM of just two years ago. He’s ready to compete where it counts.
Take the example of last month’s revelation of new technologies capable of making a 2-nanometer microchip. Microscopic measurement refers to the size of the transistors on a chip that can be manufactured and function properly. The smaller they are, the better, as small transistors consume less power, run faster, and require less space when space is a factor. From the perspective, the 7-nanometer chips are the best the market can offer today.
These aren’t just more functional chips that IBM is starting to develop. In recent weeks, the company unveiled a way for data centers to store and retrieve data more efficiently, and launched AutoSQL, which is capable of retrieving data eight times faster than previous approaches. Both technologies have a myriad of potential uses, including in the arena of artificial intelligence.
Read between the lines. It’s not the IBM of yesteryear.
It could still take years for the company to fully monetize these and other advancements, but they’re worth the wait.
10 stocks we prefer over Microsoft
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of the board of directors of The Motley Fool. Teresa Kersten, an employee of LinkedIn, a subsidiary of Microsoft, is a member of the board of directors of The Motley Fool. James brumley has no position in any of the stocks mentioned. The Motley Fool owns shares and recommends Amazon, Microsoft, and Palo Alto Networks. The Motley Fool recommends the following options: January 2022 long calls at $ 1,920 on Amazon and January 2022 short calls at $ 1,940 on Amazon. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.