While no investment’s risk-free, there are certain stocks that, from a long-term investment point of view, are ‘no-brainers’, in my view. I’m talking about the stocks of dominant companies that are almost guaranteed to be much bigger in the future than they are today.
Here, I’m going to highlight four stocks I consider to be no-brainers. I’ve bought all four for my own portfolio and I plan to hold them for the next decade.
Let’s start with Apple (NASDAQ: AAPL). There are several reasons I see Apple as a no-brainer for the long term. Firstly, it has built an amazing ‘ecosystem’ that locks consumers in. What am I going to do when my current iPhone dies? By another iPhone!
Secondly, the company’s moving into high-growth areas such as streaming, payments, augmented reality, and healthcare. I think the move into healthcare is particularly interesting. Already, the Apple Watch can measure a user’s blood oxygen level, check their heart rhythm, and track their sleep. In the future, it’s likely to be able to do a whole lot more.
One risk here is that if Apple fails to innovate, its products could become obsolete in the same way Nokia’s phones did a little over a decade ago. But I think the overall risk/reward proposition is attractive.
Next up, Alphabet (NASDAQ: GOOG), which owns Google and YouTube. One reason I’m bullish on Alphabet is that the company is dominant in the search engine space. Currently, Google has a 92% market share globally. This puts it in a powerful position from an advertising perspective. As the world becomes more online focused in the years ahead, Google’s advertising revenues should climb.
Another reason I’m bullish here is that the company looks set to be a major player in the artificial intelligence (AI) space. In recent years, Alphabet has been acquiring loads of AI start-ups and this should help drive growth going forward.
One risk here is that regulators could break up or fine the company. I’m comfortable with this risk, however.
Microsoft (NASDAQ: MSFT) is another stock I see as a no-brainer. MSFT is the second-largest player in the cloud computing market. This market’s set to grow by nearly 20% per year over the next decade. This industry growth should provide strong tailwinds for the group.
Meanwhile, the company also operates in a number of other high-growth industries, including video gaming and work-from-home solutions.
Microsoft shares have had a fantastic run over the last two years so there’s always the chance the stock could experience a pull back. In the long run however, I expect the stock to climb much higher.
Finally, Amazon (NASDAQ: AMZN) is also a no-brainer, in my view. Amazon’s currently the number one player in cloud computing with a market share of around 40%. So it should see strong growth as the cloud industry expands in the years ahead.
It should also see strong growth from the online shopping boom too. Between now and 2030, the global e-commerce market is expected to grow by around 9% per year.
Amazon does have a high valuation and this does add risk to the investment case.
But I don’t see the valuation as a deal-breaker. Amazon stock has always been expensive and this hasn’t stopped the stock from delivering huge returns.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Edward Sheldon owns shares of Alphabet (C shares), Amazon, Apple, and Microsoft. The Motley Fool UK owns shares of and has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and Microsoft. The Motley Fool UK has recommended the following options: long January 2022 $1,920 calls on Amazon, long March 2023 $120 calls on Apple, short January 2022 $1,940 calls on Amazon, and short March 2023 $130 calls on Apple. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.