Making money by investing in stocks isn’t all that complicated. There are basically three steps involved. First, identify major trends that will drive new markets. Second, find the leading companies linked to those trends. Third, buy the stocks and hold them over a long period.
The last part of that third step is usually the Achilles’ heel for many investors. Holding stocks for a long time can be more difficult than it seems. It can be tempting to sell when a stock sinks or to lock in profits when a stock soars.
However, the first two steps aren’t really difficult. Here are three stocks profiting from unstoppable trends that could make you rich.
1. NVIDIA (artificial intelligence)
Artificial intelligence (AI) is here to stay. Just ask Alexa or Siri. Billionaire Mark Cuban even predicts that world’s first trillionaire will make his or her fortune in AI. While there are plenty of companies that are likely to be big winners in AI, NVIDIA (NASDAQ:NVDA) looks like a sure-fire top pick.
NVIDIA originally developed its graphics chips to power video games. Along the way, though, the company found that those same chips were also ideally suited for use in datacenter servers that performed AI processing. The data center market over time became a huge business for NVIDIA.
My Motley Fool colleague Danny Vena recently pointed out that AI-focused data centers and other high-tech markets could really drive NVIDIA’s growth going forward. I totally agree. In particular, I’m optimistic about the prospects for the company’s chips in self-driving cars and in mobile devices (assuming NVIDIA’s pending acquisition of ARM closes).
NVIDIA’s market cap currently tops $330 billion. However, I wouldn’t be surprised for the company to join the $1 trillion club in the future with the growth of AI and gaming.
2. Brookfield Renewable (renewable energy)
Governments around the world have established ambitious goals to reduce carbon emissions. President-elect Biden has made addressing climate change a top priority for his administration. This is great news for renewable energy stocks. And Brookfield Renewable (NYSE:BEP) (NYSE:BEPC) ranks as arguably the best in the group.
Brookfield Renewable currently operates hydroelectric, wind, and solar facilities that generate over 19 gigawatts of electric power. These facilities are spread across North America, Latin America, Asia, and Europe. The company has increased its capacity sixfold since 2015.
That’s just a start. Brookfield Renewable’s development pipeline includes projects that will increase its capacity by over 18 gigawatts. And with the aforementioned push to reduce carbon emissions combined with the cost advantages of wind and solar over fossil fuels, the company shouldn’t have any problems selling all of its power generation capacity.
Brookfield Renewable has delivered an annualized total return of 18% over the last 20 years. It’s targeting total returns of up to 15% over the long term. I think the company will meet or exceed that goal and make investors who buy and hold a lot of money along the way.
3. Intuitive Surgical (aging population)
What’s the most unstoppable trend of all? Aging populations in the U.S. and in many other major nations. As the numbers of senior citizens grow, it will almost certainly drive an increase in the need for surgical procedures. The human body simply tends to wear out as it gets older. Intuitive Surgical (NASDAQ:ISRG) stands to be a prime beneficiary of this demographic trend.
The company is the 800-pound gorilla in the robotic surgical systems market. Sure, a handful of rivals have launched or plan to soon launch their own surgical robots. Intuitive, though, has an unmatched track record and install base of nearly 6,000 da Vinci systems.
Aging populations aren’t the only growth driver for Intuitive Surgical. The company also continues to introduce technological innovations that enable more types of procedures to be performed using robotic assistance. There are many more procedure types that can’t be done with robotic systems than there are procedure types that can — giving Intuitive a big growth opportunity.
Intuitive Surgical has a much bigger presence in the U.S. market than it does elsewhere. But international surgical procedure volumes dwarf the U.S. numbers, providing another tremendous path for growth for the company. Intuitive Surgical is already pretty big with a market cap topping $90 billion. However, this is the kind of stock that could become much larger over the next decade and beyond.