Want to Get Richer? 3 Best Stocks to Buy Now and Hold Forever

Want to Get Richer? 3 Best Stocks to Buy Now and Hold Forever

A group of large technology companies considered the “Magnificent Seven” have largely defined investing success over the past decade. If you owned one of these stocks, you would probably be pleased with the return on your investment.

While many of the Magnificent Seven stocks are now worth over a trillion dollars and are unlikely to repeat their same growth over the next 10 years, some can still make you richer over time.

Here are my top three picks from this group to buy and hold indefinitely.

1. Amazon

Almost everyone knows about the e-commerce giant Amazon (NASDAQ:AMZN), which dominates online shopping and represents 38% of the American market. Many people may even know that Amazon operates the world’s first cloud platform, AWS, which is now the virtual foundation of the Internet. Fewer people probably realize that Amazon has become a formidable advertising agency. Its advertising business grew 24% year-over-year in the first quarter and is expected to reach $45. billion This year.

No company in history could be as good as Amazon at finding ways to enter and dominate new markets. How does a company go from selling books online to selling everything to over 200 million Prime subscribers? How to start an online bookstore and beat technology-focused competitors to become the leading cloud platform? Now, investors are starting to understand just how big Amazon’s advertising business is growing. It’s truly remarkable.

This is all the more true as all these markets have years of growth ahead of them. E-commerce still only represents 22% of total retail commerce in the United States. Amazon Web Services continues to experience double-digit growth; it just increased 17% year-over-year in the first quarter, and this trend is unlikely to slow as artificial intelligence (AI) takes off. Amazon’s advertising business is now its fastest-growing segment, so it likely still has years of expansion ahead of it. Buy and keep Amazon. It’s boring but it still delivers what it promises.

2. Metaplatforms

Everyone seems to have social media, but Metaplatforms (NASDAQ:META) continues to grow its user base. Over the past three months, the company has accumulated an additional 50 million daily active users across its family of apps: Facebook, Instagram, WhatsApp and Threads. That now represents 3.24 billion people logging in every day. Meta makes money (a lot) by selling digital ads to businesses. It’s also remarkably lucrative; about $0.35 of every dollar of revenue constitutes free cash flow. Meta’s trailing 12 month revenue is $142 billion, which shows you how much money that is.

Meta I just started paying a dividend and bought back a ton of stock to help boost earnings per share even further. This financial engineering alone could make you richer in the long run. Investors believe the company’s earnings can grow an average of 19% annually over the next three to five years. A slowdown is therefore not to be expected.

Finally, Meta CEO Mark Zuckerberg is still only in his 40s, making him young enough to continue running the company for decades if he chooses. Zuckerberg pushed the company to invest billions in AI development, sometimes discouraging Wall Street. Nonetheless, if these investments prove successful, they could cement the growth of the next generation of Meta investors.

3.Microsoft

Microsoft (NASDAQ:MSFT), a well-known name and tech giant, is by far the oldest of this group. The company’s roots date back to the modern PC, and it is a testament to the company that its historic activities remain influential today. Over the years, management has pivoted the company into new markets, such as cloud computing, gaming and AI. It has successfully partnered with OpenAI, arguably the most innovative AI developer.

Analysts estimate that Microsoft’s profits will grow an average of “only” 16% annually over the next three to five years, still enough to do a great job for your wallet. Notably, Microsoft might be the safest stock you can own. It has an AAA credit rating, higher than that of the U.S. government, and is one of only two public companies with such a high rating.

Microsoft is also a well-known dividend growth stock with 22 consecutive increases. The stock’s dividend yield is 0.7% today, but it has increased by an average of 10% per year over the past five years. The payout is only 30% of cash flow, leaving plenty of room for future growth. Investors don’t need to think too much about the diversity of Microsoft’s business. Buy, hold and reinvest the dividends for years to come.

Should you invest $1,000 in Amazon right now?

Before buying stocks on Amazon, consider this:

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*Stock Advisor returns as of May 6, 2024

Randi Zuckerberg, former director of market development and spokesperson for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Justin Pope has no position in any of the stocks mentioned. The Motley Fool holds positions and recommends Amazon, Meta Platforms and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Do you want to become richer? 3 Best Stocks to Buy Now and Hold Forever was originally published by The Motley Fool

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