2 Outstanding Growth Stocks Worth Keeping for the Next Two Decades

Consistently investing in shares of companies with strong growth potential is a straightforward method for accumulating wealth through the stock market. However, to achieve those rare, high-return investments, it’s important to focus on businesses that still have significant room for expansion.

To spark some ideas, here are two stocks that could generate exceptional gains over the next two decades.

1. Roblox

Roblox ( RBLX 2.32%) shares have climbed 136% so far this year. The platform is drawing in a massive number of users, thanks to its model of user-generated game creation, which is proving successful at launching popular experiences that keep players coming back. As Roblox explores new ways to make money and incorporates artificial intelligence (AI), the stock could see impressive growth.

Roblox currently boasts over 111 million daily active users, who collectively spend more than 27 billion hours on the platform. The company has been successful at generating revenue from its audience by offering engaging experiences. Last quarter, its adjusted revenue, or bookings, hit $1.4 billion, marking a 51% increase from the previous year. Most of this income comes from users purchasing virtual currency to buy avatar upgrades, such as clothing and premium features.

The company is also focusing on expanding its advertising income, especially through video ads that reward viewers with virtual currency. Advertising could become a major revenue stream for Roblox, especially as its audience is increasingly made up of users over 13, who are less restricted by advertising laws for children. In the second quarter, 64% of daily users were 13 or older, and this proportion has been rising in recent years.

Efforts such as video advertising and the use of AI in content creation could set off a powerful cycle of growth for Roblox. AI tools can streamline the creation process, resulting in more frequent content updates, which in turn attract more users and increase ad engagement.

Roblox is positioning itself to become the world’s top gaming company by revenue. Leadership is confident that reaching 1 billion users is possible, which would open up vast opportunities in the gaming sector, currently valued at around $200 billion and still expanding.

2. MercadoLibre

If you’re searching for a company with strong compounding growth potential that might be undervalued and could significantly outperform the market over the next five years, MercadoLibre ( MELI -0.93%) deserves your attention.

MercadoLibre stands as the top e-commerce and fintech provider in Latin America. It operates a comprehensive ecosystem that includes an online marketplace, credit offerings, mobile payments, and logistics, securing millions of customers within its network of services.

The company has maintained impressive and steady growth for many years. Even after more than 20 years in business, MercadoLibre posted a 53% year-over-year revenue increase last quarter on a constant-currency basis. This robust growth highlights the vast market potential in Latin America, where many people still lack access to essential financial services.

MercadoLibre has successfully integrated its marketplace and fintech operations. The total value of goods sold on its platform, or gross merchandise volume, reached $15 billion last quarter, up 37% from the previous year on a constant-currency basis. Its fintech user base now exceeds 67 million, helping drive total payment volume to $64 billion in the second quarter.

These offerings generate diverse income streams from transaction fees and other services, including its rapidly expanding credit card business, which is boosting profitability. The company reported a solid 12% operating profit margin in Q2, and this figure is expected to keep improving.

It’s also encouraging to see MercadoLibre leveraging its scale to provide greater value to customers and strengthen its competitive position. Over the past year, it has achieved higher margins while broadening free shipping options. The company is also moving into new areas, such as advertising—which grew 38% year over year last quarter—and its new credit card, which saw its loan portfolio jump 91% compared to the previous year.

Currently, the stock’s price-to-sales ratio is lower than it was five years ago. Back in 2020, MercadoLibre traded at over 15 times sales, but now it’s at just 5.1. This reduced valuation presents an attractive entry point before the broader market recognizes the company’s true growth potential.