Earning huge returns requires some vision; traders need to assess which industries might dominate the future, and then purchase stocks that are most likely to benefit from those trends. And in this instance, it is possible that the metaverse and electric vehicles might be the top transformative tech of the next twenty years.
Here are two top stocks that are leading the charge in those industries, and they might be the biggest businesses in the world by 2040.
1. The case for Meta Platforms
Meta Platforms, which was formally known as Facebook, is a social media pioneer. The global population is currently around 7.9 billion people, and 2.9 billion of those people are using one of Meta’s platforms every month, whether it is Instagram, Facebook, or WhatsApp. But despite the overwhelming success it has had in the screen-based social media space, the business envisions a future that is slightly different for itself.
Meta rebranded itself in last year to reflect its new vision for the metaverse. This virtual-reality world provides so many diverse opportunities that its influence on businesses might be as significant as the internet has been. Meta Platforms’ users will exist as avatars of themselves, with the ability to hold an inventory of digital goods and teleport to other experiences. That is where the financial rewards could be, as the virtual world might sustain its very own economy.
Some estimates predict the metaverse might be an $800 billion opportunity by year 2024, but the kicker is its 12.4% compound yearly growth rate. It implies that by year 2040, assuming the growth rate remains constant, the metaverse might be worth $5.1 trillion each year to businesses like Meta Platforms. Since the company is expected to produce $140 billion in revenue this year, the potential upside by 2040 might therefore be enormous.
2. The case for Tesla
Data indicates that electric vehicles represented 4.2% of total car sales around the world during 2021, up from 2.5% in 2019. But they might skyrocket to 25% of total sales by year 2035, and 60% of total sales by year 2050.
That is great news for electric vehicle leader Tesla because it means its market will increase at least fivefold by year 2040, with plenty of upside potential. It produced over 930,000 cars last year and produced $47 billion in revenue, so this quickly expanding market opportunity might see the company remain one of the biggest in the world.
But the main difference between Tesla and other vehicle makers is its gross profit margin, which was at 25.3% for last year. By comparison, Ford’s gross margin is around 14%, and that supports the idea that Tesla is closer to a tech company than just a car maker, hence its premium stock valuation compared to that of Ford.
Its strong financial performance aside, Tesla is the top future-tech organization, and although it is already the sixth-biggest company in the world by market capitalization, it might have a clear view of first place by 2040.