Investors are increasingly eyeing opportunities to build wealth by holding shares of competitively positioned companies that are well-suited for long-term growth. Industry experts emphasize that the stock market is saturated with innovative businesses capable of expanding their reach, thus providing substantial returns for investors.
To help craft an effective investment portfolio, three contributors from Fool.com have identified three notable stocks to consider: Shopify, RH, and Carnival. Each of these companies is showcasing strong fundamentals and competitive advantages that make them compelling options for investors.
Shopify: A Top-Tier Growth Stock
John Ballard highlights Shopify as a premier growth stock, noting its remarkable performance over the last decade, with an impressive return of over 400% since 2022. Despite this growth, the company continues to present significant opportunities for expansion. Shopify provides an affordable platform for business owners seeking to establish e-commerce stores, enabling them to connect with a global customer base. While subscriptions are a component of Shopify’s revenue, its primary earnings stem from merchant solutions, which have seen a 36% year-over-year growth in the second quarter, surpassing $2 billion.
Given the evolving landscape of digital commerce, Shopify is well-positioned to leverage artificial intelligence (AI) to better serve its merchants. The launch of Catalog—a new feature that showcases millions of products via AI-powered shopping applications—demonstrates the company’s commitment to helping merchants capitalize on technological advancements effortlessly. Shopify’s ability to offer innovative solutions not only enhances sales for merchants but also strengthens its brand and competitive edge. With only 12% of total U.S. e-commerce market spending attributed to Shopify merchants as 2025 approaches, the potential for future growth remains significant.
RH: Positioned for a Housing Market Recovery
Jeremy Bowman shifts the focus to RH, noting its preparedness to benefit from a potential recovery in the housing market. With the Federal Reserve recently cutting benchmark interest rates, the housing market may see renewed activity after years of stagnation. Historically, increased home transactions drive furniture sales, which benefits RH, a company that has demonstrated resilience and solid growth even in challenging market conditions. The firm’s recent second-quarter earnings report indicated an 8.4% revenue increase to $899.2 million, suggesting it is weathering current market tumult effectively.
Given the company’s expansion into higher-end markets and regions, coupled with improved profit margins linked to increased demand, RH is positioned for future growth. The stock, which is currently trading at a P/E ratio under 20 based on fiscal 2027 earnings estimates, offers investors an attractive entry point.
Carnival: A Resilient Cruise Leader
Lastly, Jennifer Saibil highlights Carnival, pointing to a remarkable recovery in its business operations. Since reopening, demand for cruises has remained robust, breaking records in various metrics including revenue and customer deposits. In the most recent fiscal quarter, Carnival reported record numbers, raising full-year guidance due to strong bookings that already account for 93% of expected occupancy for 2025.
Despite facing challenges related to high debt—which currently exceeds $27 billion—Carnival is effectively managing its financial situation, having refinanced $7 billion in debt at more favorable rates. The expected cuts in interest rates are anticipated to further alleviate pressure on Carnival’s debt levels, paving the way for potential stock appreciation. The upcoming third-quarter earnings report is expected to provide further clarity on the company’s financial health, potentially boosting investor confidence.
As these three companies illustrate, through strategic management and innovative offerings, there are numerous avenues for investors to explore in pursuit of long-term wealth-building opportunities.
