Over the last eight weeks, investors have been taken on quite the ride. The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite have respectively logged some of their largest single-day nominal point gains and declines in their storied histories.
While red arrows on Wall Street can be unnerving over short periods, especially to newer investors, they're actually a blessing in disguise. They allow patient investors to buy into amazing businesses at a discounted price. Even though we'll never know ahead of time when these downturns will begin, how long they'll last, or where the ultimate bottom will be, we do know the Dow, S&P 500, and Nasdaq Composite eventually (keyword!) reach new highs over long periods.
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With the Dow Jones and S&P 500 dipping into correction territory, and the Nasdaq Composite falling into its first bear market since 2022, the time to pounce has arrived. What follows are five surefire stocks that have the ability to generate life-changing wealth for investors by 2035.
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The first unrivaled stock trading at a discount that has all the necessary tools to make its patient shareholders richer over the next decade is satellite-radio operator Sirius XM Holdings (NASDAQ: SIRI).
Sirius XM is one of the few publicly traded companies that can say it's a legal monopoly. Though it fights for listeners with online and terrestrial radio companies, it's the only licensed satellite-radio operator. The advantage of being a legal monopoly can often be seen in its subscription pricing power. The ability to increase prices every so often ensures that it stays ahead of the inflationary curve.
Sirius XM also enjoys a degree of revenue diversity not found at traditional radio companies. While most terrestrial and online radio companies generate their revenue almost exclusively from advertising, Sirius XM brought in 76% of its net sales last year from subscriptions, compared to only 20% from ads. Subscribers are far more likely to remain with the company through periods of economic turbulence, which leads to a level of operating cash flow transparency that ad-driven businesses can't match.
Sirius XM's valuation is jaw-droppingly cheap, as well. The company's forward price-to-earnings (P/E) ratio is below 7, and its stock is currently yielding 5.3%. Even modest subscriber growth, coupled with strong pricing power, can lead to triple-digit gains for Sirius XM stock come 2035.
A second sensational stock that can deliver life-altering returns over the next decade is robotic-assisted surgical systems developer Intuitive Surgical (NASDAQ: ISRG).
One of the bigger competitive advantages Intuitive Surgical brings to the table is its unparalleled market share in the robotic-assisted surgical space. Through the end of 2024, it had installed just over 9,900 of its surgical systems worldwide. While this might not sound like a big number, take into consideration the cost of these machines (often $0.5 million to $2.5 million), as well as the time that goes into training surgeons how to use them. Once Intuitive Surgical lands a hospital or surgical center as a customer, it tends to keep them for a long time.
However, what makes this company such a slam-dunk long-term investment is its ongoing sales shift toward higher-margin segments. When it began selling its da Vinci surgical system in the 2000s, much of its revenue came from these pricey but also costly to-build systems. As time has passed, revenue tied to instruments and accessories sold with each procedure, along with system servicing, has comprised an increasingly higher percentage of sales. These segments offer substantially better margins, which will allow the company's earnings growth rate to handily outpace its sales growth rate for the foreseeable future.
Although Intuitive Surgical stock isn't cheap, its earnings growth rate should remain steady in the mid-teens.
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The third cutting-edge stock that can deliver eye-popping investment returns by 2035 is stay-and-hosting platform Airbnb (NASDAQ: ABNB).
Though Airbnb has been around for more than a decade, it's still in its relative infancy in terms of expanding its stay-and-hosting platform. While the company claims to have over 5 million hosts offering stays on its online marketplace, this represents just a small fraction of residences around the globe. A steady expansion in the number of hosts should conservatively result in sustained double-digit sales growth on an annual basis.
Perhaps what's most exciting about Airbnb is the company's push into experiences. While it's already leaning on local experts to take travelers on adventures, Airbnb has the opportunity to lean into transportation and/or restaurant partnerships in the coming years to garner a bigger slice of the more than $11 trillion global travel market.
Shares of Airbnb are also trading at a clear discount. Following two months of tumultuous trading on Wall Street, Airbnb stock can be picked up for just shy of 23 times forward-year earnings. This is an inexpensive price to pay for a company that's revolutionizing the travel experience.
Beaten-down adtech juggernaut The Trade Desk (NASDAQ: TTD) is the fourth unique stock that investors can confidently buy with the expectation of outsized returns over the next 10 years.
The Trade Desk finds itself at the center of the fastest-growing aspect of the advertising space: digital advertising. It's a demand-side platform with a clear focus on connected TV (i.e., streaming content), video, and other digital channels that can deliver superior growth, compared to traditional forms of advertising, such as billboard and print. Ongoing cord-cutting by consumers and their shift to streaming services are what's helped The Trade Desk sustain annual sales growth of around 20%.
To make matters even better, most businesses in the digital ad arena have adopted its Unified ID 2.0 (UID2) technology. For security reasons, companies are moving away from third-party cookie tracking technology and replacing it with UID2, which still allows businesses a way to track and target users with their message(s). In other words, The Trade Desk is an integral component of the growth we're witnessing in digital advertising.
To round things out, The Trade Desk stock is historically cheap. A forward P/E ratio of a little over 22 is well below its average forward P/E of nearly 89 over the trailing-five-year period. As more consumers opt for ad-supported streaming services, The Trade Desk's importance will only grow.
The fifth surefire stock that can generate life-changing wealth by 2035 is none other than the kingpin of payment processing, Visa (NYSE: V).
What Visa brings to the table is a virtually insurmountable market share lead in the payment-processing landscape. In 2023, Visa accounted for about $6.45 trillion in credit card network purchase volume in the U.S., which works out to around a 61% share among the four biggest payment processors. It's the clear go-to for merchants and a direct beneficiary of the ongoing push away from cash-based payments.
Visa should also be able to sustain a double-digit growth rate throughout this decade (if not well beyond) thanks to international expansion opportunities. Cross-border payment volume surged 16% during the fiscal first quarter (ended Dec. 31, 2024), with the company having the ability to organically or acquisitively enter chronically underbanked emerging markets with its payment infrastructure.
This no-brainer financial stock is also trading at the lower-end of its average forward P/E ratio over the last half-decade. Investors buying right now can snag Visa shares at a 7% discount to its average forward earnings multiple since 2019.
Sean Williams has positions in Sirius XM and Visa. The Motley Fool has positions in and recommends Airbnb, Intuitive Surgical, The Trade Desk, and Visa. The Motley Fool has a disclosure policy.