22.05.2022
Chicago 11, Melborne City, USA
Investments

Long-term investment: Three stocks with huge upside potential for the next 10 years or more

4 min 45

Stocks don’t always rise in the stock market. For example, investors are now spooked by the hawkish stance of the Federal Reserve, a 40-year record spike in inflation, disruption to supply chains, and geopolitical instability in Europe.

Three stocks with huge upside potential

These factors have led companies that have historically outperformed the market to start looking for bottoms as well. Advanced Micro Devices (AMD), Taiwan Semiconductor Manufacturing (TSM), and Palo Alto Networks (PANW) are the three stocks that have borne the brunt of the sell-off in the current market.

This trader also learned about three stocks with huge upside potential. Photo: Yahoo.com

However, all three businesses offer key products and services that will continue to be in demand in the coming years. Let’s take a closer look at their prospects and check out why they could be a solid investment for the next 10 years or more.

Advanced Micro Devices (AMD)

Advanced Micro Devices chips are used in a wide variety of gadgets, from personal computers (PCs) to workstations, data centers and game consoles. And all of these markets seem to be built for robust long-term growth.

The global PC market is expected to reach nearly $162 billion by 2030, up from $145 billion in 2020. This may not seem very impressive at first, but investors should consider AMD’s continued gains in market share versus Intel in the processor market, which makes this prospect very tempting.

According to Mercury Research, AMD already controlled 16.2% of the desktop processor market and 21.6% of the laptop processor market at the end of 2021.

The company continues to gain ground in the server processor market. Its share increased to 10.7% at the end of 2021 from 7.1% in the previous year. The global server market is expected to reach $245 billion by 2030, up from $93 billion in 2020, so AMD’s growing share of this segment bodes well for the company’s future. Analysts expect AMD’s server market share to rise to 19% next year.

AMD is already delivering outstanding financial growth performance, with first-quarter 2022 revenue up 71% year-on-year to $5.89 billion and earnings up 117% to $1.13 per share. This year, AMD expects revenue to increase by 60% to $26.3 billion. Moreover, analysts expect almost 33% growth in the company’s annual profit over the next five years. The Motley Fool.

Over the past five years, growth in AMD shares has exceeded 700%.

Taiwan Semiconductor Manufacturing (TSM)

Semiconductor demand proved to be a huge tailwind for TSMC. The company’s revenue for the first quarter of 2022 rose 36% year-on-year to a record $17.6 billion. The company’s adjusted earnings increased 45%.

Demand for chips for smartphones, automobiles and data centers is expected to grow in the long term, and TSMC can be expected to maintain its amazing performance for a long time to come.

Industry experts particularly highlight the growth in demand from the automotive market due to the increasing electrification of vehicles and the addition of more electronics such as driver assistance systems, virtual cockpits, etc.

A five-year forecast for annual profit growth of 20% is quite adequate. The global semiconductor market could grow to $1 trillion by 2030 from $500 billion in the past, and TSMC reasonably hopes to benefit from this given its market dominance.

Taiwan Semiconductor Manufacturing (TSM) has gained about 150% over the past five years.

Palo Alto Networks (PANW)

According to expert calculations, spending on cybersecurity solutions will grow to $500 billion in 2030, and the market will continue to grow at 12% per year by the end of the decade. Palo Alto Networks stock is one of the best ways to take advantage of this situation, given the company’s growing market power.

Over the years, the company has shown a steady growth in its market share in devices such as firewalls, eventually becoming the No. 1 vendor in the second quarter of 2021 with a market share of almost 19%. Cisco has now dropped to second place, and Palo Alto is unlikely to give up its first place in the near future.

The company expects its annual revenue to be $5.45 billion, up 28% from the previous year. In addition, the company had remaining liabilities of $6.3 billion at the end of the second financial quarter, which ended January 31, 2022.

This indicator represents the total value of client contracts for which services have not yet been provided. A 36% year-on-year growth indicates strong demand for Palo Alto offerings.

A solid market share indicates that the company’s profits will grow by 25% annually over the next five years. But do not be surprised that this figure will grow at a faster pace.

Over the past 5 years, Palo Alto Networks (PANW) shares have risen by 320%.

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