2 Growth Stocks You Can Buy and Hold for the Next Decade

Nothing lasts forever, but a few elite stocks should beat the market over the next 10 years. I’m talking about companies poised for long-term success that make their stocks solid buys in the early days.

There are plenty of growth stocks with fantastic business prospects in the market today, but let’s talk about two of my personal favorites. If Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Duolingo (NASDAQ: DUOL) don’t hang on to their market leading growth status in 2034, I’ll buy a slightly salty hat just so I can eat it.

The secret behind Alphabet’s enduring success

Let’s start with the big name. As the parent company of Google, Alphabet crushed the stock market and dominated the online search and advertising industry for two decades.

Its two share classes represent a total market capitalization of $2 trillion and have delivered returns at a compound annual growth rate (CAGR) of about 19% over the past decade. Alphabet’s sales and free cash flow grew at a similar rate over the same 10-year period, suggesting the massive market footprint is driven by stellar business growth.

That’s all in the past. How can Alphabet stay relevant and successful for at least another decade? Resting on his legendary laurels will not be enough!

Fortunately, this company was built to last. The umbrella organization Alphabet replaced Google’s monolithic structure nine years ago for exactly this purpose.

In the long run, web-based search and advertising probably won’t be the ATM that it is today (or was in 2015), so why not plan for a lasting future with radically different business ideas? And in the transition period between Google’s burgeoning empire and whatever comes next, consumers and corporations may find it confusing whether the Google brand is attached to medical research, self-driving cars or smoke alarms. So here, instead, is the Alphabet organization, free to explore some very different business plans without confusing anyone.

The process of diversification is already underway. Most of Alphabet’s success stories are technically managed within the Google division, but with their own unique and valuable brands. YouTube is the only video streaming service with more viewing activity than the market veteran Netflix. The Android mobile platform is locked in a long-term battle with Apple iPhone for global market supremacy.

I don’t know what alternative products and services Alphabet can rely on in five or 10 years, but I know the company has many options and ideas. He is also an innovator of high caliber. Its research and development (R&D) budget is second to none, and this is the very lifeblood of a technology company with long-term ambitions:

The story continues

So, I have confidence in Alphabet’s ability to stay focused and healthy for the long term. It is an exciting growth story today, coupled with a massive market footprint. These qualities may change too soon.

Duolingo’s growth is just beginning

Duolingo is another story. The online and mobile education specialist is younger and smaller than Alphabet and much earlier in its long-term growth plans.

As a much smaller business with smaller revenue streams, Duolingo can’t compete with Alphabet’s sheer scale. But the company shares a passion for future technology, pulling every available lever to build a better and more user-friendly learning platform. Duolingo spent 38% of its revenue on research and development in its recently reported second quarter. Alphabet’s R&D commitment stalled at 14% over the same period, and Apple’s remained flat at 9%.

It’s hard to compete with this all-out attitude to research and innovation. What else would you expect from a company founded and led by a MacArthur Genius Grant winner like Duolingo CEO Luis von Ahn?

The company is growing like wild bamboo, with a 41% increase in revenue year-over-year and a 59% increase in daily active users in its second quarter report. Duolingo has made most of its money in North America so far, but it’s exploring overseas expansion and expanding its language learning portfolio to include other topics.

Music and math are its first non-language courses, and it may be a few years before Duolingo goes any further, but its learning model could be adapted to any field of study where daily repetition in a fun, game-like app has as an effective result. learning. History? Sure. Social studies? Absolute. Chemistry and physics? Maybe, but replacing hands-on lab action with application-based simulations is difficult.

So maybe Duolingo won’t dominate every possible branch of online education in the long run, but the company has barely scratched the surface of a massive global opportunity so far. And its growth prospects benefit from a robust financial platform with growing revenues and generous profits.

Duolingo is a more interesting option than Alphabet, with more exposure to both execution risks and long-term shareholder rewards. If I end up with a salty hat in 10 years, I’ll probably blame the green owl. At the same time, this stock should deliver even stronger returns than parent Google, if all goes well.

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Randi Zuckerberg, former director of market development and spokeswoman for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a board member of The Motley Fool. Suzanne Frey, chief executive at Alphabet, is a member of the Motley Fool’s board of directors. Anders Bylund has positions in Alphabet, Duolingo and Netflix. The Motley Fool has positions in and recommends Alphabet, Apple, Duolingo, Meta Platforms, Microsoft and Netflix. The Motley Fool recommends the following options: long $395 January 2026 Microsoft calls and short $405 January 2026 Microsoft calls. The Motley Fool has a disclosure policy.

2 Growth Stocks You Can Buy and Hold for the Next Decade was originally published by The Motley Fool