Long-term investors are on a constant quest to identify growth and forever stocks, combining stability and expansion potential. These stocks, built on resilience, innovation, and historical success, form portfolio cornerstones. They boast established track records of steady growth, often operating in essential industries. Their competitive edge, whether in brand strength, proprietary technology, or network effects, shields them from rivals.
Financially, they maintain strong balance sheets, generating consistent profits which ensure robust cash flows and low debt levels. So, let’s explore three of the most promising stocks that could potentially reach the trillion-dollar market cap in the near future.
Meta Platforms (META)
Meta Platforms (NASDAQ:META) posted a 16% increase in Q2 net income and an 11% growth in ad revenue. With improving economic conditions, the future appears promising. Additionally, they introduced generative AI tools to enhance content creation for Instagram and Facebook advertisers.
In Q3, Meta Platforms experienced challenges in its metaverse division but reported increased revenue and profit thanks to cost-cutting efforts. Specifically, net profit surged 164% year over year (YOY) to $11.5 billion, driven by a 23% rise in revenue to $34.1 billion. And, costs decreased by 7% to $20.4 billion. Reality Labs revenue dropped by 26% to $210 million, mainly due to reduced Quest 2 sales.
Meta Platforms reported an increase in profits and revenue, with a 24% growth in advertising revenue. Despite staff reductions and losses predicted in the AR/VR unit, the company continues to see improved impressions, mainly in the Asia-Pacific region. The short video platform Reels significantly increases Instagram’s usage. Meta Platforms plans to expand Reels as a core part of its apps, representing over half of time spent on Facebook and Instagram platforms.
Berkshire Hathaway (BRK-B)
Warren Buffett consistently advocated for long-term thinking and low-fee index funds over stock trading. He suggests a 90% S&P 500 index fund and 10% short-term bonds for better returns. With his conglomerate, Berkshire Hathaway (NYSE:BRK-B) largely reflects this wisdom, with a cash position (held mostly in short-term Treasuries) which has continued to grow lately.
Berkshire Hathaway’s market cap stands at $750 billion today. Thus, its path to a $1 trillion valuation seems inevitable. This growth has been bolstered by wise investments like Apple. Yet, the focus should remain on Berkshire’s core businesses, such as its railroads and insurance, where substantial value lies. Additionally, Berkshire Hathaway’s insurance segment, led by GEICO, is its largest revenue driver. These subsidiaries offer substantial competitive advantages, with generated premiums serving as “float” for strategic investments.
Visa (V)
Visa (NYSE:V), with a growing market share and global reach, is a long-term portfolio addition. Processing over 60% of U.S. credit card transactions, it’s poised to benefit from the shift to digital payments. Hence, this position makes it a secure and high-reward investment with a 0.77% dividend yield.
In the second quarter, the company reported $8.12 billion in revenue and $4.16 billion in net income, marking a 22% YOY increase. Operating income reached $5.48 billion, up 13%. Visa is performing strongly, with its stock trading at $231, an 11% year-to-date (YTD) increase.
Also, Visa benefits from long-term growth drivers. Cashless payments are replacing cash, especially in emerging markets. The expanding global middle class is providing more people with credit card access. Additionally, Visa’s profits get a boost from inflation and larger transactions, evident in the recent fiscal Q3 with a net profit margin above 50% and double-digit growth in revenue and earnings. These strong results are appealing to long-term investors.
On the date of publication, Chris MacDonald has a LONG position in META, BRK-B. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
