When it comes to looking for "buy-and-hold forever” stocks, there are some important things to pay attention to. The most notable is the ability of these companies to benefit from trends that are likely to remain important over long periods of time. These trends can allow stocks that appear expensive to continue putting up strong returns. Investors knowing these trends exist boosts these stocks' valuations. However, pricing in decades of these trends playing out isn’t tenable, allowing these stocks to continue growing if they execute.
Like all stocks, these companies will rise and fall based on their financial performance, company news, and market conditions. However, the trends benefiting these firms mean that over the long term, shares can continue appreciating. Additionally, “buy-and-hold forever” doesn’t mean monitoring these companies isn’t important. Tracking drastic changes in strategy, management, or competition is vital, as is watching for shifts in long-term trends. Nevertheless, below are three stocks where the buy-and-hold forever moniker is apt.
Meta: Advertising, AI, and Virtual Reality
Meta Platform’s (NASDAQ: META) business revolves largely around digital advertising, artificial intelligence, and virtual reality. Throughout human history, advertising has been a staple of business. It is essential to sell products and services, as if no one knows about them, they can’t make purchase decisions. Scholars place the first advertisements back in Ancient Egypt, and advertising will continue to be a key part of civilization and business for centuries to come. Meta runs one of the world's largest ad businesses. It sells ads on Facebook and Instagram. AI's integration into its ad platform has greatly helped by creating highly personalized ads. This means advertisers are willing to pay big-time for space on Meta's platforms.
Meta must keep innovating its apps to fend off new social media rivals. But it's hard to see it losing the dominance it has established. Meta's family of apps had 3.3 billion daily active individual users last quarter, around 40% of the world’s population. The company's advertising business supports its ability to invest in its virtual reality (VR) hardware, on which it loses billions a year. With VR’s much greater immersion over traditional video, most expect rapid growth in its adoption to continue. Meta is the undisputed leader in VR hardware, allowing it to benefit greatly from this trend in the long term.
Tesla: EV Leader With Autonomous Driving Upside
Tesla (NASDAQ: TSLA) benefits from the long-term trends of electric vehicles (EVs) and autonomous driving. Despite decelerating growth, EV sales are increasing while gas-powered vehicle sales are declining. Tesla is one of only three companies that can profitably make and sell EVs. It has gotten the hardest part of this journey out of the way. The company has lost market share over time. But a massive increase in competition makes this unsurprising. With most major car companies following Tesla’s lead into EVs and significant EV backing from governments, this trend is here to stay. Tesla remains by far the top EV dog in the United States, and the expertise it has gained so far should allow it to continue winning.
Tesla’s position as a profitable EV maker is particularly beneficial in the era of less preferential treatment toward EVs that the Trump administration is ushering in. Tesla no longer benefits from EV credits since it is too big; they mostly help up-and-coming players that are small and unprofitable. Trump's policies largely help reinforce Tesla’s moat. Additionally, autonomous driving is another trend that Tesla is fully involved in. However, opinions on whether or not the company is the front-runner in this space vary greatly depending on whom you ask.
Intuitive Surgical: Leader in Robotic Surgery With Room to Grow
Intuitive Surgical (NASDAQ: ISRG) has developed a revolutionary technology to perform robotics-assisted surgeries. This technology reduces surgical errors and speeds up patient recovery. Based on an estimated market size of $11.5 billion in 2024, Intuitive has a 73% market share with its $8.35 billion in revenue. The company's revenue and installed base are impressive, and it consistently exceeds expectations.
The company still has a significant ability to keep growing due to the size of its total addressable market (TAM). The company’s long-term TAM estimates sit around 20 million procedures per year. Its machines are currently used in around 2.7 million procedures a year. Intuitive has been successful in launching different and improved products over time. This gives the company what it takes to continue growing into its TAM, especially with competition far behind.