2 Growth Stocks to Buy Now and Hold for 10 Years

Source The Motley Fool

Growth stocks are a great way to build lasting wealth, but it's important to choose wisely. Buying shares of promising companies that are tapping into a huge market for their products can lead you to long-term winners.

You don't have to chase hot tech stocks to grow your money. Focusing on the brands and experiences where young people are spending more time could be a lucrative opportunity for long-term investors. Here are two interactive entertainment companies that have great return prospects over the next decade.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

1. Roblox

Roblox (NYSE: RBLX) is enjoying strong momentum as 2025 gets going. It offers a 3D interactive platform with millions of games and other experiences that is delivering excellent financial results. The stock is up 44% over the last year, but the business is just getting started on its long-term growth strategy.

Roblox has over 85 million daily active users, up 19% year-over-year in the fourth quarter. These players spent over 18 billion hours on the platform last quarter. Higher engagement leads to growing sales of its virtual currency (Robux), which is how Roblox monetizes its user base. Developers are rewarded for their content with payouts, which incentivizes more content that drives more growth for the platform.

Daily active users have been growing around 20% year-over-year for the last two years, indicating a huge opportunity ahead. One growth catalyst that can win over more people to the platform is better graphics fidelity and new technology, including the integration of artificial intelligence (AI) for content creation and in-game experiences.

Importantly, Roblox is already showing the potential to be a very profitable business. It generated $641 million of free cash flow last year on $3.6 billion of revenue. Its trailing-12-month revenue represents just 2% of the video game industry.

Management believes it can capture about 10% of annual spending on video games. If it executes, that could lead to annual top-line growth of 20% over the next several years, which could fuel market-beating returns over the next decade.

2. Take-Two Interactive

Take-Two Interactive (NASDAQ: TTWO) is a leading video game maker, best known for the Grand Theft Auto series, which has sold over 440 million copies over the last few decades. The stock is up 38% over the last year, as investors start to look for more growth ahead of new releases.

The sixth installment in the GTA series is scheduled to launch later this year. The company is also launching new iterations in the Borderlands and Mafia series. Management is calling this upcoming slate "transformative" for its business and long-term growth.

Take-Two rarely releases new games of unproven franchises. Its strategy of launching games from its current franchises lowers the risk of disappointing sales, since these franchises already have an established fan base that will buy the latest release.

GTA V released in 2013 and went on to sell 210 million units through the most recent quarter. Even in 2025, it remains one of the most popular games in the industry, as Take-Two keeps players coming back with ongoing updates to the game. The sixth installment will follow the same strategy.

Meanwhile, NBA 2K and the recent release of Sid Meier's Civilization VII are performing well. But these games are offsetting mixed results from Take-Two's mobile games. Overall, management is guiding for full-year revenue to land between $5.57 billion and $5.67 billion, up slightly from $5.3 billion in fiscal 2024.

But the next few years should see Take-Two reach new financial records. The consensus analyst estimate has revenue reaching $8.3 billion by fiscal 2027 (which ends in March 2027), with adjusted earnings per share climbing to $9.22. The stock jumped to new highs following the latest earnings report, and it should deliver solid returns over the next 10 years.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

  • Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $323,920!*
  • Apple: if you invested $1,000 when we doubled down in 2008, you’d have $45,851!*
  • Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $528,808!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

Continue »

*Stock Advisor returns as of February 28, 2025

John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Roblox and Take-Two Interactive Software. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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