Two Potential Growth Stocks to Invest in and Maintain for a Decade in 2025
📣 Looking for lucrative investments beyond artificial intelligence in 2025? Consider exploring the potential of e-commerce and cloud computing industries! These sectors boast promising long-term growth prospects. Two remarkable growth stocks worth keeping an eye on are Shopify (SHOP 0.09%) and Veeva Systems (VEEV 2.70%). Let's dive into their unique characteristics.
1. Shopify
The growth of e-commerce has been tremendous, but it still has room to expand. In fact, e-commerce only accounted for 16.2% of the total U.S. retail transactions during the third quarter. Enter Shopify, a market leader in enabling merchants to create and manage successful online stores. But Shopify isn't just about building online storefronts.
The company offers a wide range of services, including payment processing, inventory management, and cross-selling tools for most major social media platforms. Shopify's app store boasts thousands of options that cater to merchant-specific needs, granting Shopify a competitive advantage. Its revenue growth has been exceptional in the last decade, and Shopify now controls about 10% of the e-commerce market by gross merchandise volume.
While Shopify isn't profitable yet, it has made notable strides in lowering expenses and costs. Recently, Shopify sold its low-margin logistics business, leading to improved margins and free cash flow. Quarterly revenue growth reached 26% in the third quarter, with free cash flow jumping 52.5%. Shopify's success is further bolstered by its impressive 'switching costs' and 'network effect' advantages, making it difficult for competitors to disrupt its growth trajectory.
2. Veeva Systems
Cloud computing has become a powerful tool for companies, offering efficiency, cost savings, and increased data security. The competition in this field is intense, but Veeva Systems leverages its specialization in the organically high-growth life sciences sector to carve out a unique niche. Life sciences companies struggle with regulatory challenges, substantial upfront investments, and inherent uncertainties. Veeva Systems addresses these challenges with its highly specialized cloud solutions, earning the admiration of prominent players in the industry.
Veeva Systems' financial results have historically been exceptional, fueled by its network effect and high switching costs. The life sciences sector itself is expected to keep expanding, giving Veeva Systems a substantial addressable market, estimated to reach $20 billion. Its current trailing-12-month revenue of $2.7 billion is a fraction of this potential, suggesting significant upside potential. Regardless of market size, Veeva Systems is well-positioned to capture a significant portion of the life sciences sector over the next decade.
Investing in Shopify and Veeva Systems might be a winning strategy for capital growth in the upcoming decade. As e-commerce and cloud computing continue to develop, these two growth stocks may offer outsize returns from their respective industries. Remember to conduct thorough research and consult with a financial advisor before making any investment decisions.
Investing in Shopify and Veeva Systems could be a lucrative strategy for the upcoming decade, given their potential for capital growth. Shopify's dominance in the e-commerce market, fueled by its impressive growth and competitive advantages, positions it well for continued success. On the other hand, Veeva Systems' specialization in the life sciences sector and its ability to address specific challenges in that field make it a strong contender in the growing cloud computing market.