Achieve a Million-Dollar Retirement Fund through Investing $100,000 in These Two Stocks and Patiently Waiting for a Decade.
Investing $100,000 in the SPDR S&P 500 ETF Trust (SPY) a decade ago would net you over $346,000, boasting a solid 13.2% compound annual growth rate (CAGR). But, with some clever investments, doubling or even tripling that market return is within reach.
Consider stakes in Microsoft (MSFT) and Tesla (TSLA) from a decade ago. In 2012, a $100,000 gambit on Microsoft would now be worth an impressive $1,088,000, thanks to a mind-blowing 27% CAGR. Meanwhile, plunking down the same amount on Tesla would have grown to an astounding $2,598,000, yielding an otherworldly 38.2% CAGR.
These two examples demonstrate the power of smart investments to build substantial wealth. As we look forward to the coming decade, let's examine why these two tech titans continue to surge.
Microsoft (MSFT)
Microsoft has been a reliable long-term investment, consistently generating solid revenue and profits. Over the past year, the stock may have lagged slightly, but investors with faith in its long-term prospects can rest easy. This corporate titan has an impressive portfolio of diversified revenue streams in gaming, cloud services, and software, among others.
Last year, Microsoft hit an impressive milestone, with a revenue of over $250 billion, $91 billion of it pure profit. Investors value companies with strong fundamentals, and Microsoft's past track record speaks for itself - a 1,000% advance over the past decade.
Tesla (TSLA)
A $100,000 wager on Tesla a decade ago would net you nearly $2.6 million today. The trends driving Tesla's growth have shown no signs of slowing down. In 2012, Tesla had a market cap of just $20 billion; now, it's over a trillion.
In 2015, Tesla produced only 50,000 electric vehicles (EVs) and generated $4 billion in revenue. Ten years later, its annual production jumped to almost 1.8 million vehicles, and its revenue neared $100 billion.
Elon Musk's ambitious plans for Tesla include self-driving robotaxis and humanoid robots in the next decade. Granted, the company may not meet every goal, but its targets are unquestionably forward-thinking.
Tesla's focus on sustainable transportation and innovation keeps it at the forefront of the EV market's rapid expansion. Governments worldwide implement stricter emissions regulations and consumers adopt eco-friendly alternatives, driving growth in the EV sector.
Microsoft (MSFT) and Tesla (TSLA) - Market Cap and Revenue Growth
- Microsoft (MSFT):
- Revenue growth: Microsoft's revenue has soared over the past decade. Its annual revenue has surged from $143.02 billion in 2020 to $245.12 billion in 2024, with an estimated compound annual growth rate (CAGR) based on the provided data. However, a precise CAGR for the past decade is not directly calculable from the sources. The growth rates provided are as follows:
- 15.67% growth in the 2024 fiscal year.
- 6.88% growth in the 2023 fiscal year.
- 17.96% growth in the 2022 fiscal year.
- 17.53% growth in the 2021 fiscal year.
- 13.65% growth in the 2020 fiscal year.
- Tesla (TSLA):
- Revenue growth: Tesla's revenue has ticked up significantly over the past decade. Its annual revenue skyrocketed from $21 billion in 2018 to nearly $97.7 billion in 2024, with a compound annual growth rate (CAGR) of approximately 37.62% over the past 10 years, as reported by Finance Charts.
Potential Future Growth Prospects
- Microsoft (MSFT):
- Cloud Services and AI: Microsoft is well-positioned in the cloud computing and AI markets, two sectors expected to continue growing. The company is a leading provider of cloud services, and the proliferation of AI-as-a-service should drive cloud service revenues.
- Revenue growth: Microsoft's revenue growth is expected to persist due to its strong position in the tech industry. The company's past market cap growth and revenue expansion illustrate a steady and prosperous financial performance.
- Tesla (TSLA):
- Electric Vehicle Market: Tesla is a market leader in the rapidly expanding EV sector, with governments worldwide implementing stricter emissions regulations and consumers gravitating toward sustainable transportation options.
- AI and Autonomous Driving: Tesla's emphasis on AI and autonomous driving technologies could further enhance its competitive edge and fuel future growth.
- Market Trends: The EV market is poised for substantial growth, thanks to government policies, technological innovations, and increasing consumer demand. Tesla's strong brand and innovative products position it well to capitalize on this trajectory.
- To maximize your returns in the next decade, consider smart investments in companies with strong fundamentals, like Microsoft (MSFT) and Tesla (TSLA).
- In the world of finance, using tools like ycharts can help analyze past performance and make informed investment decisions. For instance, analyzing Microsoft's (MSFT) and Tesla's (TSLA) revenue and market cap growth over the past decade can provide valuable insights.
- By investing $100,000 in Microsoft (MSFT) a decade ago, you would have earned over $1 million today, demonstrating the power of smart investment strategies.
- Investors seeking high returns could look into companies that are leading the way in innovative and growing sectors, such as Tesla (TSLA), which is revolutionizing the electric vehicle market.
