By looking 10 years ahead and exploring who is working today to make that future a reality, you might find some great investment opportunities.
The essence of investing is future potential. In a typical approach to putting a value on a company’s stock, a potential investor starts by estimating how much money the company will generate for its owners over the long term.
Future cash-generating ability is the basis for valuation estimates, discounting the fact that a dollar in your pocket next year is worth less than a dollar of solid cash in your pocket today. With that in mind, these three stocks are likely to generate income over the next decade (and beyond) and provide a great foundation for your financial future. If they perform as expected between now and 2034, they could help you be wealthier by 2034.
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No. 1: Semiconductor giants are investing heavily in the future
Intel (International Trade Commission 2.13%) The company’s shares have languished over the past few years as it has sought to extract value from its existing microchip manufacturing facilities, and its underinvestment in next-generation production capacity has allowed more agile competitors to leapfrog it in technology.
But it’s clear Intel recognizes that falling behind in an industry as driven by product performance as semiconductors is a risk to its future. From artificial intelligence to smartphones and laptops to the microchips built into many everyday products, the demand for smaller, faster and more power-efficient chips is clear.
After what may have been a long wait, Intel is aggressively investing in the capabilities needed to deliver competitive, next-generation computing power. With federal funding from the CHIPS Act, Intel will invest more than $100 billion over the next few years to build the precision manufacturing capabilities we need to thrive.
Investments today should translate into cash flows tomorrow, and with the first wave of new capacity expected to come online later this year, investors may start seeing expected returns on their investments in the not-too-distant future, which is reason enough to believe we will still be thriving a decade from now.
No. 2: Energy infrastructure giant continues to invest for growth
Enbridge (ENB 0.75%) Enbridge is a leading oil and natural gas pipeline company based in Calgary, Canada. While many are concerned about the future of this industry, Enbridge is actively investing in it. The company is acquiring a “last mile” natural gas utility and is poised to become the largest natural gas utility company in North America.
This is a great synergy with the company’s long-distance pipeline business, and a sign of Enbridge’s belief that natural gas will remain a vital fuel for decades to come. Fortunately, the company is not alone in this assessment: The U.S. Energy Information Administration (EIA) projects that demand for natural gas will remain stable or increase slightly between now and 2050.
If these projections prove correct, demand for natural gas will likely remain strong past 2050. After all, you can’t instantly replace all of your energy at once, and natural gas has the advantage of working even in bad weather.
For shareholders, this means Enbridge can likely continue its decades-long trend of increasing dividends. Combined with a 7%+ yield, Enbridge looks well-positioned to continue thriving beyond 2034.
No. 3: Tech giants already leading the way in AI integration
Thanks to a $10 billion investment in OpenAI (the company behind ChatGPT), Microsoft (MSFT 0.74%) Microsoft has a strong presence in the rapidly growing field of artificial intelligence (AI), and the company is certainly leveraging that position, offering AI-powered add-ins to many of its popular product suites.
On top of that, Microsoft’s new Copilot acts as a kind of coordination service, integrating multiple AI systems into a single framework. In a world where AI still tends to excel at specialized, well-defined tasks, Copilot’s integration shows how to streamline the interface for the humans who need to use those tools.
Even if today’s hype about AI proves to be somewhat of a bubble, like what happened with the Internet in the late 1990s, AI will likely eventually be integrated into our daily lives. As a well-funded pioneer with access to not only cutting-edge AI technology but also the leading use cases for integrating it, we believe Microsoft is positioned to thrive when AI becomes integrated into our lives. That makes Microsoft an attractive candidate for any portfolio looking 10 or more years from today.
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The market is always trying to price future possibilities into prices, so that by the time today’s future is already known, the market is trying to predict the next big thing. By investing in what will happen 10 or more years from now, you may find an opportunity to profit when that possibility comes to fruition.
Still, the thing to remember about the future is that it’s always approaching today, so make today the day you decide whether the future of these three businesses is strong enough to be worth investing your hard-earned money in. If these businesses deliver on their long-term prospects, you might be glad you made the decision.
Chuck Saretta has positions in Enbridge, Intel, and Microsoft and recommends the following options: long Intel December 2026 $30 calls, long Enbridge January 2025 $37.50 calls, short Intel December 2024 $25 puts, short Intel December 2024 $35 calls, short Intel December 2026 $30 puts, short Enbridge January 2025 $30 puts, short Enbridge January 2025 $37.50 puts, and short Enbridge January 2025 $40 calls. The Motley Fool has positions in and recommends Enbridge and Microsoft. The Motley Fool recommends Intel and recommends the following options: long January 2025 Intel $45 calls, long January 2026 Microsoft $395 calls, short January 2026 Microsoft $405 calls, and short May 2024 Intel $47 calls. The Motley Fool has a disclosure policy.
