Prosper Junior Bakiny, The Motley Fool
5 min read
In This Article:
-
Netflix has a solid plan to become a trillion-dollar company by 2030.
-
Veeva Systems still has a massive addressable market.
Broader equities have not performed particularly well in 2025. The S&P 500 is barely in the black year to date. However, considering it hovered near bear market territory a few weeks ago, things aren't so bad.
Stocks might not be out of the woods, though. Economic issues could arise, sending markets down, as the Trump administration continues to implement its trade agenda.
That said, regardless of what happens on that front, there are plenty of companies worth investing in. Here are two great examples: Netflix (NASDAQ: NFLX) and Veeva Systems (NYSE: VEEV).
Netflix, a streaming specialist, has been grabbing headlines recently for all the right reasons. The stock is up for the year, financial results have been good, and management sees significant upside ahead.
The company has plans to join the exclusive club of trillion-dollar stocks by 2030. From its current market cap of $522 billion, that will require a compound annual growth rate of 13.9%.
That's nothing to sneeze at, but it's well within the company's reach, in my view. Five years ago, Netflix ended 2019 with $20.2 billion in revenue. Last year, that had risen to $39 billion -- a compound annual growth rate (CAGR) of 14.1%.
True, a lot has changed since. There is more competition in the streaming field, for instance. Even so, Netflix has made changes that have kept it in the lead in the industry, including a crackdown on password sharing and the introduction of a low-priced ad-supported tier. The company doesn't grow its revenue quite as fast as it used to, but in the past five years, profits and free cash flow have soared.
Meanwhile, there is still considerable room for growth in the streaming industry. Netflix's estimate of a $650 billion revenue opportunity reflects the fact that streaming still has yet to completely overtake entertainment.
The industry's penetration should expand over the long run and benefit Netflix, considering its strong position, network effect, and brand name. Furthermore, it is increasingly using artificial intelligence (AI) to enhance its content strategy, which is already a key to its success.
Though AI won't be the center of Netflix's universe, it can allow the company to make better movies for less money, something that will make a difference down the road. So the goal to achieve a trillion-dollar valuation in the next five years isn't just a pipe dream -- it is well within the company's powers. Even if it fails, though, the stock should deliver superior returns well beyond 2025.
