History shows that stocks perform better than any other asset class over time. While gold, oil, and housing can beat the market for short periods of time, over the past century stocks have trumped everything else.
This also goes for cryptocurrencies, whose stocks have eaten their dust in recent years with phenomenal gains as everyone started buying. But in 2022, despite the S&P 500 falling more than 13% year-to-date, the Crypto 10 Index of the top 10 cryptocurrencies is down more than 57% so far this year. This only reinforces the idea that stocks are still your best long-term bet.
Because tech stocks have driven the market higher during their nearly 15-year bull run, the sector’s collapse this year is now bringing high-flying investors previously out of of range. The following three tech stocks today have far more potential than any of the biggest cryptocurrencies.
Short term vacation rental Airbnb (ABNB -3.60%) has an advantage over the hotel and motel industry in that it has few overhead or capital expenditure requirements that would burden it with the debt it would need to provide service. Although it ended the second quarter with $1.9 billion in long-term liabilities, it also had $6 billion in cash and cash equivalents as well as an additional $2.3 billion in readily available investments. It is essentially a low-overhead, cash-rich, fast-growing business.
Revenue soared 58% to $2.1 billion last quarter, with gross booking value and booked nights and experiences each increasing by 25% or more. It also turned a loss of $21 million a year ago into a profit of $373 million this year, while also generating $795 million in free cash flow.
Despite this, Airbnb’s stock languishes, having lost nearly half its value from its 52-week high. Fears of a recession caused by runaway inflation, high energy prices and rising interest rates continue to weigh on the stock’s performance. And only in the overseas United States is the economic situation more dire, with war, soaring energy prices and the prospect of food shortages.
Airbnb’s business model is proving quite resilient, however, and its depressed price represents a good opportunity to enter a hotel portfolio with excellent long-term potential.
chip maker Nvidia (NVDA -9.23%) was slipping well before the reversal of Ethereum (CRYPTO:ETH) from a proof-of-work validation system to a proof-of-stake system where stakeholders validate transactions, but “the merge” has an impact nonetheless.
Indeed, Nvidia chips are currently often used to do validation work, which is why its gaming chip business has long been so robust. These gaming chips weren’t used primarily for video games, but rather to validate Ethereum transactions – and now with the change, they won’t be in as much demand.
Nvidia’s recent Q2 preview update shows the potential outcome; revenue is expected to be $6.7 billion instead of the previously expected $8.1 billion, as gaming revenue of $2 billion will be down 33% from last year and down 44% compared to the previous quarter.
Luckily for investors, Nvidia’s data center business has overtaken gaming as its top revenue source, and sales of $3.8 billion are expected to be 61% higher than a year ago ( although only up 1% quarter over quarter).
There will likely be some pressure on Nvidia’s stock due to declining gaming activity, but the high-performance chipmaker still has its finger on the pulse of all important arenas for the future of GPUs. With stocks down 50% from their highs and 44% year-to-date, it’s a bargain for this long-term winner.
e-commerce platform provider Shopify (STORE -5.59%) has been completely crushed, losing more than 80% of its value as growth has slowed since the frenetic early days of the pandemic.
Since Shopify’s core business is primarily to establish and optimize online sales channels for small and medium-sized businesses, it is now susceptible to the winds of recession blowing since it is a business focused on retail. Rising rates and inflation limit consumer spending and the creation and expansion of new businesses.
The problem is that the market assesses value based on these pandemic cycles, and right now business is reverting to the average of its pre-pandemic existence, which is fine for an investor with an investment calendar. sufficient. Such meteoric growth spurts aren’t sustainable, and it’s true that Shopify has made its own mistakes – but it’s now correcting its trajectory and will be better positioned for long-term growth.
He launched a merchant money management account, a small business loan store, a fully hosted enterprise e-commerce platform for fast-growing brands, and the Shopify Fulfillment Network, which brings the problem in-house merchant shipping logistics. It also offers non-fungible tokens, or NFTs, to help businesses and brands better connect with customers.
With a balance sheet that remains in good shape and prospects for stable future growth, Shopify is a stock that should easily overtake any cryptocurrency in the years to come.
Rich Duprey has no position in the stocks mentioned. The Motley Fool holds posts and recommends Airbnb, Inc., Ethereum, Nvidia, and Shopify. The Motley Fool recommends the following options: $1140 January 2023 Long Calls on Shopify and $1160 January 2023 Short Calls on Shopify. The Motley Fool has a disclosure policy.