3 Monster Stocks to Hold for the Next 3 Years
It's halftime for 2025, but investing isn't a game that is won or lost in a single year. You need patience and vision for the best market strategies to play out.
Nvidia (NASDAQ: NVDA), Carnival Corp. (NYSE: CCL), and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) are three monster stocks that I think will deliver strong results in the next three years. Let's take a closer look.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
1. Nvidia
Arguing that Nvidia is a monster stock to hold for the next three years may seem a lot like closing the barn door after the race horse has bolted. The leading developer of graphics processing units and artificial intelligence (AI) chips is a nine-bagger over the last three years. Am I three years too late? Am I three months too late?
Some will argue that the last great opportunity to buy Nvidia happened in early April, when Nvidia and most tech stocks were rattled in the early days of the trade war with China. Nvidia was already vulnerable from the problematic buzz a few months earlier that Chinese AI tech start-up DeepSeek was cranking out quality generative AI on the cheap without having to spring for the latest Nvidia hardware. With investors bracing for what was eventually a $4.5 billion charge related to export restrictions on Nvidia's H20 chips, it was in retrospect a great time to buy. Nvidia shares have soared 82% since bottoming out on April 7.
Worrywarts will argue that the days of scintillating gains are over for Nvidia investors. With its $3.8 trillion market cap, Nvidia has reclaimed its spot as the most valuable U.S.-exchange traded stock in the recent rally. There are still tariff headwinds aside from the export restrictions into China. The shares can still go higher.
Image source: Getty Images.
Nvidia's latest quarter was a blowout performance. Revenue surged a better-than-expected 65% for its fiscal first quarter, fueled by a 73% jump in its data center revenue. All but 12% of its revenue is now coming from that business, and that's a good thing. Demand for the buildout of data centers remains strong as AI's hunger for computing power intensifies.
It's not the only thing that's intensifying unfortunately. Nvidia is modeling an $8 billion revenue hit from the export control limitations between the U.S. and China. The stock's pop over the last several weeks has boosted its valuation. Nvidia is now trading for 37 times this fiscal year's expected earnings and 27 times next year's target. It's not a cheap price for most companies, but it is a discount to Nvidia's growth. Nvidia's adjusted earnings exceeded expectations with a 57% increase in its latest quarter, and it wouldn't be a surprise to see Wall Street pros continue to raise their bottom-line forecasts as the the next three years play out.
2. Carnival
If you're looking for a stock with a lower valuation at the starting line, you might want to consider boarding Carnival. The world's largest cruise line by revenue and passenger count is trading for just 14 times its recently heightened earnings guidance for this fiscal year. The multiple drops to 12 if we look out to what analysts are eyeing for fiscal 2026.
Carnival came through with another beat on both ends of the income statement when it posted its fiscal second-quarter results last week. It's not fair to call this a surprise anymore. The cruise line operator has delivered 11 straight quarters of topping Wall Street profit targets, and in the last six quarters the beats have been by a double-digit-percentage margin.
Demand remains strong for Carnival. It had $8.5 billion in customer deposits for future sailings at the end of its latest quarter, the highest that it's ever been at this point in the year. Carnival is vulnerable to global economic slowdowns or if geopolitical skirmishes grow wider, but for now it's coasting with inviting waters for the next couple of years.
3. Alphabet
If you want a blend of Nvidia's AI-infused tech sizzle and Carnival's attractive valuation, Google parent Alphabet should be able to scratch that itch. Alphabet is gaining ground in the AI space, and it naturally continues to be the world leader in search and the advertising opportunities that come with that pole position. YouTube and its open-source Android platform are also dominant. With a market cap of $2.2 trillion, there are only three other companies outside of Nvidia with larger capitalizations among U.S.-listed stocks.
Alphabet is perpetual grower, making its flat stock performance over the past year -- down 3% over the past 12 months -- even more intriguing. Annual revenue has risen by at least 8% for more than two dozen years. The top-line gains accelerated last year to 14%. This isn't the kind of growth investors are getting out of Nvidia, but the price of admission is more reasonable. It has a forward earnings multiple in the high teens, trading for less than 19 times this year's earnings and 17 times next year's estimate.
Should you invest $1,000 in Nvidia right now?
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Rick Munarriz has positions in Alphabet and Carnival Corp. The Motley Fool has positions in and recommends Alphabet and Nvidia. The Motley Fool recommends Carnival Corp. The Motley Fool has a disclosure policy.
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