Is ChargePoint a Stock to Buy and Hold Forever? Here's Why It Could Be.

Electric vehicle (EV) sales in the United States hit a record high in the fourth quarter of 2024, with virtually every major auto maker -- and several start-ups -- participating in the market. Although you could invest in the sector by choosing one of them, it's important to remember that all those new vehicles need a charging ecosystem to support them. That's what ChargePoint (NYSE: CHPT) is building.

1 reason ChargePoint can be a stock to buy and hold forever

Electric vehicle sales are growing rapidly, going from the low single digits of total vehicle sales in the U.S. in 2014 to over 20% of new vehicle sales roughly a decade later. The trend shows no sign of stopping, helped along by global efforts to prioritize vehicles that don't produce as many harmful emissions. That growth has created a huge need for charging infrastructure. ChargePoint is attempting to serve a wide spectrum of customers here, with technology that can be used at a private residence, out on the road, and by companies that have fleet operations.

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When its fiscal 2025 ended this January, ChargePoint had 342,000 charging ports in its system, which is spread across the United States and Europe. Having built a substantial network, the company is increasingly focused on improving profitability. It is making great strides, with operating expenses as a percentage of revenue falling 18 percentage points year over year in the fourth quarter of fiscal 2025. Gross margin, meanwhile, rose 9 percentage points.

ChargePoint is growing along with a growing industry and working toward profitability. Assuming it reaches that goal, it would not only be a sustainable business, but perhaps a quite valuable one.

Know before you buy

Although there is a great deal of opportunity here for long-term investors, ChargePoint is still a fairly aggressive investment. At this point, it's still losing money. There are still huge outlays for research and development that are necessary because EV technology remains relatively new and ChargePoint can't risk falling behind the competition. In other words, investors need to go in with a very long-term view here, because profitability could be some years away.

Should you invest $1,000 in ChargePoint right now?

Before you buy stock in ChargePoint, consider this:

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Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.