2 Enduring Growth Stocks to Invest In for the Long Term

Heeding the wisdom of Warren Buffett's investment philosophy, one strategy for wealth accumulation is the long-term holding of outstanding stocks. Tesla and Amazon are two such growth stocks that illustrate the potential for significant returns to their shareholders through extended periods of ownership. These companies showcase resilience and dominance in their respective industries: electric vehicles and e-commerce.

Tesla: Electrifying the Auto Industry

With a whopping market capitalization of $705 billion, Tesla has transcended the typical confines of the automotive industry. This valuation is a reflection not just of its current financial health, but of its anticipated growth and industry leadership in profit margins.

Tesla is steering the automotive industry towards an electric future amid challenges such as rising interest rates that may dampen EV sales. Despite these headwinds, Tesla's delivery of over 1.8 million vehicles in 2023 marks a steadfast growth trajectory. It spearheads the U.S. EV market, claiming a significant 55% share while maintaining more lucrative profit margins than its competitors.

While other manufacturers vie for a slice of the EV pie, Tesla maintains a competitive edge—bolstered by an impressive 11% net profit margin, robust brand recognition, and a progressive approach to technology with investments in software and AI. These strategic moves pave the way for Tesla's continued financial success and shareholder value enhancement.

Investors can anticipate Tesla's sustained reinvestment of profits into innovations such as robotics and energy solutions, thereby ensuring its longevity and profitability in the market.

Amazon: Dominating E-Commerce and Beyond

Amazon, another growth titan, stands out as an investment for the ages. Apart from its influential cloud services sector, Amazon's role in the expansive $5 trillion global e-commerce market is a testament to its growth potential. It's worth noting that despite its significant presence, Amazon still has room to capture a greater market share.

Amazon has shown promising signs of improved profitability, particularly through enhanced free cash flow resulting from refined operational efficiency at its fulfillment centers. The company is well-positioned for further growth in profitability, aided by its burgeoning advertising services and strategic partnerships such as the one with Shopify, which extends Prime benefits to a wider audience.

Currently trading at a price-to-sales ratio below its pre-pandemic valuations, Amazon presents a compelling buy for investors. With revenue growth and increasing free cash flow, the company is geared to appreciate in value, leveraging the vast opportunities of the online shopping sphere.

Note: John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. This article presents factual information and doesn't endorse specific stocks or securities.

Investing, Tesla, Amazon