Five Must-Hold Stocks for Long-Term Growth Investor

Investors are on the lookout for growth and stability in their portfolios. Five standout stocks, including Nvidia and Taiwan Semiconductor, present strong long-term prospects based on performance metrics. Here's a closer look at why these companies could be worth the investment.

Date: 15-01-2025

AI Rating: 7

Nvidia (NASDAQ: NVDA) has established itself as an exceptional 'monster stock' with impressive annual gains averaging 87% over the last five years and 75% over a decade. Its forward-looking price-to-earnings (P/E) ratio is currently at 32, which is below its historical average of 41, indicating a potentially favorable entry point despite both ratios being on the higher side.

Taiwan Semiconductor Manufacturing (NYSE: TSM) boasts an average annual gain of 25.6% over the past decade, significantly outperforming the S&P 500 which averaged 10% under similar conditions. Currently, the stock appears fairly valued, suggesting it may be a stable investment although not overly cheap or expensive.

Arista Networks (NYSE: ANET) is another monster stock with annual gains averaging around 40% over the past decade. The recent forward P/E ratio of 45 indicates that the stock might be overvalued relative to its past performance (5-year average of 30). However, strong free cash flow and profit margins contribute positively to its outlook.

Axon Enterprise (NASDAQ: AXON) demonstrates robust growth with 36% average annual gains over the last ten years. The recent forward P/E ratio of 95 suggests overvaluation, given its five-year average of 71. Nonetheless, strong revenue growth—up 32% year-over-year—shows that the business is expanding effectively.

SPDR S&P 500 ETF (NYSEMKT: SPY) serves as a foundational investment given its representation of the broader market. The fund has seen consistent double-digit gains in recent years, making it a solid choice for those seeking to diversify their portfolios with minimized risk.

Based on the analysis, Nvidia, Taiwan Semiconductor, Arista Networks, and Axon Enterprise show various strengths in growth potential, while the S&P 500 ETF acts as a stabilizing force in an investor’s strategy. Investors should consider both the growth metrics and current valuations when making investment decisions.

Stocks: NVDA TSM ANET AXON SPY