I’ve analysed two FAANG stocks that could be a great opportunity for investors over the long term.
These two stocks are AMZN and GOOG. It may be at first surprising to say that these stocks aren’t overvalued but over the long term, they will most likely continue to surprise investors with incredible growth.
Amazon (NASDAQ: AMZN)
Amazon, the global e-commerce company is achieving massive success in various business segments. Primarily e-commerce, however, they have also made massive strides in Amazon Web Services (AWS) which acts as the back-end operating system for many businesses.
The financial results for Amazon in 2020 were incredible. Revenue grew by over an astonishing 37.6% year over year which brought revenues to $386 billion. Even more surprisingly, Amazon will most likely surpass its previous year’s revenues because of its second-quarter revenue of $113 billion that showed significant strength to carry the business forward into a strong third and fourth quarter of this year.
Earnings have continued to increase steadily over time, proving that Amazon’s business model is sustainable and growing, just recently pushing its net profit margin by 16.6% up year over year to almost 6.9%. This is extremely favourable for investors looking for growth over the long term.
There’s no doubt that Amazon will continue succeeding for years to come as more of the world switches to online shopping.
Alphabet (NASDAQ: GOOG)
Second on the list is Alphabet, the technology giant that offers a variety of services from online advertising, search engines, cloud computing, and more.
Alphabet has immense dominance over search engines, making it easy to grow other products and services alongside it.
In 2020, Alphabet posted year over year revenue growth of 12.7% which resulted in $182.5 billion of revenue. What’s even better, is in Alphabet’s latest second-quarter results their revenues were accelerated further to an incredible $61.8 billion, which represented 61.5% growth year over year.
The net profit margin also grew by almost 64.8% year over year to nearly 30% as of the latest quarterly results. This trend will likely continue as Alphabet offers mainly virtual products where the margins are far higher than say Amazon.
There seems to be a lot of confidence amongst investors since the stock has can parabolic, rising over 80% in the past year alone. There doesn’t seem to be any signs of slowing for years to come.
Both of these companies seem to have phenomenal growth ahead, along with great fundamentals. Over the many years, I believe Amazon and Alphabet will be one of the most resilient couples that push towards new heights as they both have compelling ecosystems of products and services that hundreds of millions of people benefit from every single day.
Overall, these two stocks could make a great addition to an investor’s portfolio that seeks steady growth throughout the long term.