Contributing to a Junior ISA is a great way for parents to set their children up financially. By investing within this type of account – where all capital gains and dividends are completely tax-free – parents can potentially build substantial savings for their children over time.
Looking for stocks to buy for a Junior ISA today? Here are three with considerable potential to consider.
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.
Amazon
Assuming it’s a long-term investment (not all Junior ISA investors have a long time horizon), I think high-quality growth stocks with the potential to increase in value significantly over the next decade are the best bet for this type of ISA. And one stock that fits the bill here is Amazon (NASDAQ: AMZN).
Originally an online shopping company, it’s now a tech conglomerate with operations in e-commerce, cloud computing, video streaming, digital advertising, artificial intelligence (AI), self-driving cars, and more. Given this broad exposure to the tech ecosystem, it looks well positioned in a world that’s increasingly becoming more digital.
It’s worth noting that Amazon’s a volatile stock. And we could see volatility in the months ahead if economic conditions deteriorate and consumers rein in their online shopping spend.
Taking a long-term view however, I’m bullish on its prospects. By 2035, I expect this tech powerhouse to be much bigger than today.
CrowdStrike
Another growth stock that appears to have a ton of long-term potential is CrowdStrike (NASDAQ: CRWD). It’s one of the world’s top cybersecurity companies.
Over the next decade, the cybersecurity industry’s likely to get much bigger as the world becomes more digital. According to McKinsey & Co, it could be a $2trn industry in the not-too-distant future.
I expect CrowdStrike to spearhead the industry’s growth. This company has a best-in-class, AI-powered cybersecurity platform, a distinguished customer base, and a top CEO in George Kurtz (who founded the company), so it looks well positioned for success.
Of course, cybersecurity’s a competitive industry. And to have success, CrowdStrike will have to fend off rivals such as Palo Alto Networks and Zscaler.
I expect it to keep winning. However, investors need a long-term mindset here – today, the company doesn’t have a lot in the way of profits as it’s still in the high-growth phase so is likely to be volatile.
Uber
Finally, check out Uber (NYSE: UBER). It’s widely regarded as the world’s top rideshare and food delivery company today. This company has gone from strength to strength in recent years. Not only have revenues increased significantly, but profits and cash flows have too.
I reckon this company’s just getting started however. In the years ahead, I expect to see it expand into new geographic markets, add new mobility and delivery services, and partner with self-driving vehicle companies to, well, drive growth.
Now a lot of investors see Tesla – which has self-driving technology – as a threat to this company. And it could be in the long run. However, the way I see it, when self-driving cars arrive, Uber’s highly likely to be the platform that consumers use to hail.
With its strong brand and huge user base, it’s well placed to be a demand aggregator.
