Investing in companies capable of advancing and profiting from influential trends can be a life-changing path to wealth creation. Not every stock you buy will go on to be a world-beating success story, but holding just a few big winners over the long term can deliver incredible returns.
If you’re looking for stocks that can help you tap into some of this century’s biggest technology trends, read on to see why investing in these two industry-leading companies could help you score big financial wins.
Capitalizing on the Electric Vehicle Trend
Albemarle (NYSE: ALB) is a leading lithium miner and a top provider of lithium for batteries used in electric vehicles (EVs). If you’re looking for pick-and-shovel plays to benefit from long-term growth in the EV space, the company deserves consideration as a potential investment. Its beaten-down stock could wind up being a huge winner over the long term.
Owing to declining prices for lithium and competition from China-based rivals, Albermarle’s performance has taken a hit recently. Leading auto manufacturers including Ford and General Motors have also cut their electric-vehicle production plans in the face of weaker-than-expected demand growth. Amid these pressures, the company’s share price has fallen 53% from the high that it reached in 2022. But business performance hasn’t actually been disastrous.
Sales grew roughly 10% year over year in the third quarter to reach $2.3 billion, a level that did come in below analyst targets and the company’s own previous guidance. While the company has seen some uneven performance this year, it still expects to end 2023 with sales up between 30% and 35% annually.
ALB PS Ratio (Forward) data by YCharts
Valued at less than 1.9 times this year’s expected sales and less than 7 times expected earnings, Albemarle offers big growth potential at a reasonable price.
Slowing growth in the EV market is connected to macroeconomic pressures, but these shouldn’t last forever. If the downturn for lithium prices does in fact prove to be cyclical and reverses at some point down the line, Albemarle stock should be able to deliver impressive returns.
Tapping into the Rising Cybersecurity Demand
Cybersecurity is already central to business resilience, and it will only become more important. Monetary and reputational damage from security breaches continues to climb, and bad actors have rising incentives to target large businesses and institutions in hopes of securing a ransom payout or leveraging stolen data to profit in other ways.
CrowdStrike‘s (NASDAQ: CRWD) cloud-based software helps prevent cybersecurity breaches from occurring and protects businesses from suffering potentially disastrous setbacks. Using artificial intelligence technologies, the company’s Falcon platform catalogs and adapts to each new threat it encounters. In turn, every customer within the company’s network benefits as the library of identified cyberattacks continues to expand.
CrowdStrike’s revenue climbed 35% year over year in Q3 to hit $786 million. Meanwhile, non-GAAP (adjusted) net income skyrocketed 107% from the prior-year period to hit roughly $199 million, and free cash flow jumped 37% to hit $239 million. The company also closed out the period with cash and equivalents totaling $3.17 billion against zero debt.
CrowdStrike’s business fundamentals continue to look rock solid, and the business continues to have a very promising long-term expansion outlook.
Even with strong momentum, the company will probably capture only a mid-single-digit percentage of the $100 billion total addressable market (TAM) that management is forecasting for 2024. With the cybersecurity specialist still gaining market share at a healthy pace, that means there’s plenty of growth potential still on the table.
Spurred by growth for its current services, the launch of new product offerings, potential collaborations, and untapped AI and cloud security opportunities, CrowdStrike sees its TAM exploding to $225 billion in 2028.
With rapidly expanding sales and profits and huge market opportunities still ahead, CrowdStrike stands out as a great means of capitalizing on rising demand for high-performance cybersecurity services.
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Keith Noonan has positions in CrowdStrike. The Motley Fool has positions in and recommends CrowdStrike. The Motley Fool recommends General Motors and recommends the following options: long January 2025 $25 calls on General Motors. The Motley Fool has a disclosure policy.
