You want to know where to invest a thousand dollars right now?
Hi, Rex Moore here and I’ve been studying and researching stocks for the Motley Fool for over 20 years now.
I’m excited to tell you today about an industry with incredible potential and a stock that you might like in this industry. Further, let’s say I’m willing to up the risk a little bit, looking for some big potential for a stock that really has a chance to increase, let’s say, five times or more over the next 10 years. Remember that our Foolish way of investing emphasizes the long-term because that’s where the really big gains can be found.
Of course, I’m going to be looking at world-changing industries like this one. It’s an industry that’s on track to reach over $12 trillion in sales by 2035. One that’s been described as being potentially bigger than the dot-com boom, bigger than the Bitcoin boom of 2017 and bigger than pot stocks. I’ll tell you what this industry is and why it may be a once in a decade opportunity and my top stock pick for it.
But first, I do want to let you know that this video is sponsored by Motley Fool Stock Advisor. Since its inception in 2002 Stock Advisor‘s recommendations have beaten the market by an incredible four to one margin with an average return of 612 percent. Stock Advisor gives you two new stock picks each month, as well as teaching the Foolish way of investing, which means focusing on becoming part owners of great companies and holding them for the long term.
On this chart you will see the pattern that I’m talking about. Roughly once every 10 years there is a huge leap in technology that literally changes the world with all the new capabilities it brings, and it sets off a massive wealth opportunity for early investors who make the right choices. I believe that it is happening again.
The industry I’m talking about is 5G, which we’ve been talking about for quite some time now. If you are a little skeptical, I guess I can’t say that I blame you. Sometimes you will hear about the early stages of these technologies and see a lot of hype and everything. But then you don’t really see the results for a few years. Take electric vehicles are self-driving cars, for an example, sometimes the hype there proceeds all this can numb people. But if you’re an investor, that should be just fine with you because you should now be digging in a little deeper to see what is behind all of this 5G hype.
I’ve traveled to a lot of events around the world, met with a lot of companies in the past several years. This technology was everywhere at CES in 2020. What’s telling is it was everywhere I turn, not just in some 5G-dedicated section of the show. Instead, it was in the virtual and augmented reality booths and medical tech, the Internet of Things and of course, automobiles. These industries and many more are relying on 5G’s lightning speed to help propel them forward and increase their sales. You won’t see many companies emphasizing something like this unless they believe that the dollars are really there, that’s going to help them.
Qualcomm (NASDAQ:QCOM) in fact, predicts that the value of goods and services provided by this new technology to reach a jaw dropping $12.3 trillion. That’s why this chart filled in a bit more for you now really speaks volumes to me. What about stocks? One reason that I think now is a good time to consider this is because we now have a really big catalyst. While you’ve maybe heard about 5G in bits and pieces before, it is now finally moving into the mainstream.
But what to invest in? Believe me, I think you could do a lot worse with your thousand dollars than investing in an Apple (NASDAQ:AAPL). It is a stock pick after all, that’s a current recommendation in many of our services. But Apple and these other companies are massive. That kind of growth that we’re really looking for here seems to be a lot harder when you get into these largest companies in the world almost. But remember, I said it earlier that I wanted to be a little bit bolder than with my stock pick.
For that reason, I really like a much less known name and that stock is Twilio (NYSE:TWLO), ticker is TWLO. As 5G pushes more and more data to the cloud now, this increases the communication possibilities between people and devices, or devices and devices. Twilio is really poised to profit from this. It’s really hard to explain what this company does in a sentence or two, but if you think of really any way, communication between devices or people happens, Twilio can help facilitate that. Some common use cases is anonymous communications. That means enabling users to have a trust in means of communications where they don’t have to share private information like their telephone number. For example, conversations between drivers and riders or texting after meeting through a dating website. There’s also alerts and notifications that Twilio helps enable. There is a lot of user security between devices, authentication, validating that kind of thing, that Twilio helps.
Amazon.com their Amazon (NASDAQ:AMZN) Web Services and Facebook’s (NASDAQ:FB) WhatsApp are two of the marquee customers for Twilio. Twilio, lets Uber (NYSE:UBER) update riders and drivers in real-time without having to share their communication information or their phone numbers. Netflix even leans on Twilio to help deliver text and push messages and notifications for everything from speedy password resets to critical updates. As a company, Twilio’s goal is to insert itself into the tool kit of every developer in the world. Because big ideas often start small here and developers need the freedom and the tools to be able to iterate and innovate on their ideas. Twilio is intertwining itself into some of the most important companies that we will see in 5G.
Twilio has what us stock geeks like to call a huge moat. Meaning it’s harder for competitors to break into the industry, it has high switching costs. Customers love them and they find it very hard to switch to another company that can provide even similar services. That’s what I love about it. Twilio is an under-the-radar stock. Not a lot of people have heard about it. They don’t immediately think 5G company when they think of Twilio, I have skin in the game on this now I bought Twilio in 2019. It’s done well for me. I think it will continue to be a very important company in a very important industry to the world. As always, you’ll want to be able to ride the ups and downs and keep a long-term perspective on this and all companies that you become a part owner.
Thanks for joining us and we will see you next time.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
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