Do you want $1 million in retirement? Invest $100,000 in these 3 stocks and wait a decade

Many investors consider $1 million in savings to be a solid benchmark to reach by retirement age. And yet, according to the most recent data from the Federal Reserve, American retirees between the ages of 65 and 74 have accumulated an average of just $409,900.

Many Americans don’t reach that million dollars because they haven’t invested enough of their savings in ways that have grown their capital significantly. In the last 30 years, S&P 500 generated an average annual return of 10.5% and would have turned a $100,000 investment into $1.2 million. The US dollar has lost more than half of its purchasing power over the same period.

Image source: Getty Images.

Even if you don’t have 30 years until retirement, it might be smart to start putting some of your savings away in stocks instead of leaving them in places where inflation can take its toll. If you want to get started today and can afford to lock away $100,000 for the next 10 years in investments, I think three high-growth stocks have what it takes to deliver millionaire earnings by retirement: Cloudflare (NET 0.38%), MicroStrategy (MSTR 1.15%)and Arm holds (ARM -0.81%).

1. Cloud gaming and cyber security: Cloudflare

Cloudflare hosts a cloud-based content delivery network (CDN) that accelerates the delivery of digital content for websites and applications. It achieves this by storing cached copies of digital media on edge servers that are physically located closer to the end user than the origin servers. It also protects websites from bot-based attacks.

Cloudflare went public in 2019, and its revenue had a compound annual growth rate (CAGR) of 46% from 2019 to 2023. It currently provides data from 330 cities in over 120 countries worldwide and processes over 60 million HTTP requests per second.

It has also repeatedly claimed that it will become a “water filter” system for the modern internet, reducing the need for third-party cyber security services.

From 2023 to 2026, analysts expect Cloudflare’s revenue to grow at a CAGR of 28%. If it matches that outlook, maintains a similar valuation, and maintains a 20% CAGR from 2026 to 2034, its stock could grow nearly tenfold by the end of the year.

But for that to happen, it still needs to cut its losses, expand its ecosystem with new services, and widen its moat against smaller competitors like Rapid and older CDN leaders ca Akamai. So Cloudflare is still a risky growth stock right now — but it could have a lot of upside for patient investors.

2. Bold Bitcoin Bet: MicroStrategy

MicroStrategy is a slow-growing enterprise software company whose revenue saw an anemic 1% CAGR from 2020 to 2023. Analysts expect its revenue to grow at just 2% CAGR from 2023 to 2026, on as it gradually expands its new subscription-based cloud services to offset sluggish growth in its on-premise software.

It doesn’t sound like an exciting growth story, but the company suddenly shifted gears four years ago when it started accumulating Bitcoin. It ended its last quarter with 226,500 Bitcoins on the balance sheet. He bought them for $8.3 billion at an average price of $36,821, and they are now worth about $12.9 billion.

That’s equal to nearly half of the company’s $28 billion enterprise value, and management plans to keep buying more Bitcoin. This development could make MicroStrategy a hit in the next decade if the cryptocurrency’s price skyrockets.

Social Capital’s Chamath Palihapitiya says Bitcoin could hit $500,000 by 2025, while Fidelity’s Jurrien Timmer sees it reaching $1 million by 2038-2040. If the digital currency comes close to hitting these lofty price targets, MicroStrategy’s valuations could explode and easily turn a $100,000 investment into more than $1 million.

3. The forward-thinking semiconductor game: Arm

Arm Holdings is a UK chip designer that licenses its architecture to chip manufacturers such as Qualcomm and Apple. It doesn’t make any chips of its own, but Arm-based chips now power about 99 percent of all premium smartphones and are gradually creeping into the PC and server markets.

Impeded arm IntelIts x86 chips gained a foothold in the mobile phone market because its architecture was more energy efficient, more customizable and cheaper for its partners. Its asset-light licensing model also allowed it to evolve faster than Intel because it let its chipmaker partners do the heavy lifting.

Arm was acquired by the Japanese conglomerate SoftBank in 2016 and broke off again last September. Its revenue grew 21% in fiscal 2024 (which ended in March) as the smartphone market stabilized, and analysts expect its top-line to show a CAGR of 23% from fiscal 2024 to in fiscal 2027. This robust growth should be driven by its new high. -rights AI chip design, as well as its new automotive and cloud computing chips.

If Arm matches those estimates, maintains its current valuations and continues to grow revenue by at least 20% annually over the next seven years, it could post earnings of nearly 10 bags by fiscal 2034.