In 5 Years, These 8 Stocks Will Be More Valuable Than Amazon
Amazon stock shares are up a whopping 76% in the past year, as of May 6. What’s more, the company reported strong first quarter earnings on April 30, with operating income of $15.3 billion, according to the earnings report — above analysts’ expectations.
“The company has a number of drivers for further margin expansion in place, including continued cost efficiencies within its fulfillment network as well as the ongoing mix shift towards higher-margin AWS and advertising revenue,” Wedbush Securities analysts wrote in a May 1 research note, adding that the company’s “emerging success in monetizing generative AI which is already on a multi-billion dollar revenue run rate and should contribute more meaningfully to AWS growth as the year progresses.”
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Amazon is part of the companies collectively referred to as “the Magnificent Seven” and which include — Alphabet, Apple, Meta, Microsoft, Nvidia and Tesla — and all have business models that are heavily dependent on technology and the current excitement around artificial intelligence (AI), as JPMorgan explained.
Against this backdrop, which other stocks could be more valuable than Amazon in the next five years?
Microsoft
Stock price: $406.66
Year-to-date: 9.65%
Past year: 31.75%
Past month: -4.22%
As Vijay Marolia, co-founder of The Cash Square said, Microsoft “is ridiculously profitable, which makes sense when you consider its ability to consistently generate and grow cash flows has turned it into one of the world’s largest companies.”
“Don’t forget, it owns half of OpenAI and has the balance sheet to make more strategic acquisitions,” Marolia said.
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Nvidia
Stock price: $887.83
Year-to-date: 84.32%
Past year: 204.56%
Past month: 1.89%
The company — set to release its next earnings on May 22 — reported blockbuster earnings on February 21, as well as a very optimistic financial forecast, which predicts revenue to be $24 billion for the first quarter of fiscal 2025.
In a February 21 call with analysts, CEO Jensen Huang thinks that generative AI has kicked off a whole new investment cycle to build the next trillion dollars of infrastructure of AI generation factories.
“NVIDIA has ballooned in market value already — but I don’t think the rally is done,” Marolia said. “Their business is growing so fast I wouldn’t be surprised if shares double from this level in less than five years.”
Blackstone
Stock price: $117.99
Year-to-date: -8.01%
Past year: 45.36%
Past month: -8.76%
Blackstone — an alternative investment management company with $1 trillion in assets under management — “owns extremely profitable businesses and generates a ton of fee revenue,” Marolia said.
“On top of that, they have top-tier talent and one of the best networks in the world of merger and acquisitions,” he said. “They’ve quietly been compounding equity at over 30% for the last five years and I don’t see that stopping anytime soon.”
Bank of America
Stock price: $37.25
Year-to-date: 9.88%
Past year: 34.53%
Past month: -0.67%
If you want to take a page from Warren Buffett’s playbook — Bank of America is one stock to own for the long-term. Buffett released Berkshire Hathaway’s first-quarter 2024 earnings on May 4, which showed that the conglomerate’s portfolio is focused on just five stocks- and Bank of America is one of them.
American Express
Stock price: $47.14
Year-to-date: 26.04%
Past year: 9.04%
Past month: 19.25%
This is another one of Berkshire Hathaway’s long-term holdings — with a $34.5 billion position in the company, according to the earnings reports.
Apple
Stock price: $183.38
Year-to-date: -1.22%
Past year: 5.69%
Past month: 8.86%
This is Berkshire Hathaway’s largest holding, with $135.4 billion in shares, according to the earnings report. While Buffett slashed his stake in the company in the quarter, he said — during the annual shareholder meeting on May 4 that Apple “is an even better business” than American Express and Coca-Cola, as The Wall Street Journal reported.
Apple also released its earnings on May 2, announcing its largest ever buyback of $110 billion.
Angelo Zino, senior equity analyst at CFRA Research, said he maintains a Buy rating on Apple shares, citing “a host of upcoming events/catalysts on the horizon that could improve investor sentiment and drive consensus estimates higher,” as explained in a May 2 note.
Tencent
Stock price: $47.14
Year-to-date: 26.04%
Past year: 9.04%
Past month: 19.25%
As Investor Place reported, shares of the company provide exposure to many segments of China’s tech sector, including social media, video streaming, fintech and telehealth, as well as generative AI.
Shopify
Stock price: $74.46
Year-to-date: 0.85%
Past year: 15.66%
Past month: 0.11%
It’s also worth noting that the stock is up 187.71% in the past five years.
“If you’re willing to be patient with the business as it continues to right-size operations and improve its bottom line, this can be another excellent stock to hold for the long term,” according to The Motley Fool.
*Each stock’s data above was collected on May 6, 2024.
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