Most investors know how important patience is when buying and holding stocks. Investing is not a sprint, but a marathon. It is won by the masses who keep an eye on the big picture when short-term noise distracts.
However, if you can make significant profits in a relatively short period of time without taking too much risk, that’s not a bad thing.
Here’s a closer look at three stock prospects with the potential to turn a $1,000 investment today into $5,000 in 2030.
1. DraftKings
Given that more than two-thirds of states have allowed some form of sports betting since the federal ban on such gambling was lifted in 2018, it is reasonable to conclude that DraftKings‘ (NASDAQ: DKNG) The phase of highest growth is behind us. The same goes for DraftKings stock.
However, this is unlikely.
Not only have states only started getting into the legalization camp in 2018, but it also takes a while for the sports betting industry to fully mature in a given market when DraftKings sets up shop there. In fact, in the states where the company first offered access to its sports betting app four years ago, the company is still seeing solid annual revenue growth. Profitability also continues to improve the longer DraftKings operates in a given market.
And it’s worth noting that two of the states that have not yet legalized sports betting are Texas and California. Together, these two states have more than 20% of the country’s population. Proponents of legalization have a harder time there, but it will be worth it when it finally happens in these two states.
Then there’s the overseas opportunity. Although CEO Jason Robins isn’t currently planning any serious international expansion, it’s always a possibility worth considering. Straits Research expects the global online sports betting market to grow 11.2% annually through 2032.
Then there’s the less philosophical, simpler reason DraftKings stock has a good chance of quintuple in value over the next six years. That said, shares are now down about 26% from their March peak for no apparent reason. Take advantage of that volatility while it benefits interested investors.
2. Arm Holdings
When investors think of technology stocks focused on artificial intelligence (AI), names like NVIDIA or maybe C3.ai come to mind. The former makes the computing processors found in most AI systems. The latter offers decision-making platforms for the enterprise market. And to be honest, names like these have so far deserved the intense attention they have received.
However, as we enter the next phase of the AI era, the technology foundations of the industry are evolving. Chips originally designed for other purposes are no longer optimal for next-generation AI applications. We need processors that don’t consume huge amounts of power, processing solutions that are flexible enough to handle a wide range of artificial intelligence tasks, and cost-effective enough to remain marketable.
Enter the chip manufacturer Arm Holdings (NASDAQ:ARM).
OK, it is not exactly a chip manufacturer in the same sense as Semiconductor manufacturing in Taiwan or Intel It is more accurate to categorize Arm as a chip designer and then as a licensor of intellectual property in chip manufacturing. AppleFor example, the latest AI-enabled smartphones and tablets are based on processors based on Arm’s architecture.
But it is not just Apple. Arm’s technology is increasingly found in chips from the aforementioned Nvidia, Intel and Qualcomm to name a few. It is difficult to make a microchip that does not incorporate at least some of Arm’s intellectual property.
The kicker: Arm Holdings’ revenue is expected to grow nearly 23% this year (despite economic headwinds) before rising to 24% next year. Earnings growth is moving even faster. Both companies are expected to continue to grow solidly over the next few years.
3. Dutch brothers
Finally, add a coffee drive-through chain Dutch brothers (NYSE: BROS) to your list of stocks that can turn $1,000 into $5,000 by 2030.
Some investors will quickly point out the challenge of penetrating a market that is already dominated by Starbucks. While Dutch Bros operated only 912 stores at the end of June, Starbucks has a whopping 16,730 stores in the United States alone. Starbucks shareholders are also excited that Brian Niccol will take the helm as CEO next month. Niccol was Chipotle Mexican Grill Since his appointment as CEO in 2018, the company has returned to being a healthy growth company, and Starbucks investors are expecting a similar (and much-needed) revival.
However, Dutch Bros offers its customers something Starbucks simply can’t: casual authenticity – employees are encouraged to provide a personal experience for each customer. It’s not uncommon, for example, for a particular kiosk to support local causes.
This sentiment is also well received, especially by younger consumers. As a result, sales in existing stores rose by a further 4.1% in the last quarter, and new store openings drove sales up by 30% year-on-year.
And that’s just the beginning. CEO Christine Barone agrees with founders Dane and Travis Boersma’s vision of opening 4,000 Dutch Bros stores within the next 10 to 15 years. That’s certainly a tall order. But since the company is already profitable and has little debt, it’s entirely doable without seriously endangering investors.
Don’t wait too long if you’re interested, though. Like DraftKings and Arm Holdings, Dutch Bros stock is a bit volatile and is currently down (27% from its recent high), but that probably won’t stay that way for very long.
Should you invest $1,000 in Dutch Bros now?
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James Brumley does not own any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Chipotle Mexican Grill, Nvidia, Qualcomm, Starbucks, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends C3.ai, Dutch Bros, and Intel and recommends the following options: long January 2025 $45 calls on Intel, short August 2024 $35 calls on Intel, and short September 2024 $52 puts on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.
3 Stocks That Could Turn $1,000 Into $5,000 By 2030 was originally published by The Motley Fool
