Planning for retirement is essential, but it can be difficult financially. Most Americans estimate they need at least $1.8 million to retire comfortably, yet only 10% of retirees have more than $1 million in savings, according to the Federal Reserve’s 2019 Survey of Consumer Finances.
If you can put away $100,000, wait ten years, and ride out a few market dips, you may be in for a pleasant surprise. Three evergreen growth stocks, Cloudflare, CrowdStrike, and Snowflake, are discussed in this article as viable means toward this end.
To turn $100,000 into $1 million in a decade, you need a strategy that involves high-growth stocks. Assuming stable valuations and margins, it’s essential to target companies with a compound annual revenue growth rate (CAGR) of at least 26% over the next ten years. Let’s delve into the details of each of these promising growth stocks:
Cloudflare is the industry standard when it comes to content delivery networks (CDN), which are used to speed up the transfer of files from websites to end users. To speed up content delivery, they take a novel technique by storing cached versions of client files on “edge servers” that are physically closer to end users.
Cloudflare processed 46 million HTTP requests per second in 2022 and has operations in 300 cities across more than 100 countries. It’s a crucial piece of the internet since it helps speed up information delivery and protects users from cyber threats.
Between 2019 and 2022, annual Cloudflare revenue increased by 50%. Revenue is expected to grow at a CAGR of 31% from 2022-2025, notwithstanding significant challenges. Cloudflare should thrive in the next years since the worldwide content delivery network industry is expected to expand at a CAGR of 23% between 2022 and 2030.
Cloudflare’s projected 26% CAGR over the next decade is well within the realm of possibility given these figures. From $975 million in 2022 to almost $10 billion in 2032, that’s an increase in annual revenue of nearly tenfold.
As an alternative to conventional on-premises hardware, CrowdStrike provides cloud-based security technologies. With this method, you won’t have to worry about the high costs of hardware, the inconvenience of regular maintenance, or the insufficiency of scalability in older systems.
CrowdStrike’s rapid expansion since its founding 12 years ago is impressive. By the conclusion of the second quarter of fiscal 2024, 63% of the 23,019 subscription clients it served at the end of fiscal 2023 were using at least five of its cloud-based modules.
CrowdStrike has a remarkable 67 percent compound annual growth rate (CAGR) in sales during fiscal years 2020 and 2023. Even though growth slowed for a while owing to market conditions, experts still predict a 30% compound annual growth rate (CAGR) in revenues from fiscal 2023 to fiscal 2026. Furthermore, between 2023 and 2032, the worldwide cloud security market is projected to grow at a CAGR of 22.5%.
CrowdStrike’s yearly sales may reach a staggering $22 billion in fiscal 2033, up from $2.2 billion in fiscal 2023, if the company maintains a CAGR of 26% over the next decade.
Snowflake is a cloud-based data warehousing service that specializes in consolidating and normalizing data from a wide variety of internal sources. This method eliminates data silos, encourages teamwork, and makes it easier to make decisions based on facts.
Snowflake has 7,828 clients by the conclusion of the 2023 fiscal year. Notably, by the end of the second quarter of fiscal 2024, 402 of these clients had earned over $1 million in product sales for Snowflake.
Snowflake’s yearly product revenue increased by more than 70% between fiscal years 2021 and 2022, and by more than 200% between fiscal years 2021 and 2023. Even though management is expecting a 34% growth rate in fiscal 2024, they are still enthusiastic about the future and expect product revenue to reach at least $10 billion by fiscal 2029.
From fiscal 2023 through fiscal 2029, this amounts to a compound annual growth rate (CAGR) of over 32% for product sales. Snowflake’s product sales might reach $23 billion by fiscal 2032 if the company maintains its current growth rate over the next three years. This would be a phenomenal twelve-fold increase in yearly product sales in less than a decade.
The Bottom Line
With careful planning, it is possible to grow $100,000 into $1 million by the time you retire. Investors can take advantage of the power of compounding returns and amass significant wealth over a decade by purchasing high-growth stocks like Cloudflare, CrowdStrike, and Snowflake.
Remember that there is always the possibility of losing money when investing and that past results are no guarantee of future success. The stock market is volatile and unpredictable, but you can protect yourself by diversifying your holdings, monitoring market movements, and consulting with financial professionals.
Even while these growth stocks have potential, you still need to do your homework and make smart choices if you want to reach your retirement goals.