Choosing an investment might be tricky. Choosing between thousands of publicly listed stocks can be intimidating. One option is to buy and hold companies with clear competitive advantages.
These two companies have proven success, competitive advantages, and bright futures. These companies might be good stock market investments for $1,000 investors. Those with fractional shares can acquire both. Let's investigate why.
ASML Nvidia's recent surge is unmissable for business news readers. The rush into AI has raised demand for its processors, and it's not slowing down. Often, the most fascinating investments are with supply chain companies rather than the headline-grabbing corporation. These firms include ASML (NASDAQ: ASML).
AsML makes lithography machines, which are used to make semiconductor chips. After Nvidia designs a chip, another business makes it. The chipmaker requires a lithography machine. ASML is the only business in the world that builds advanced machines for Nvidia's cutting-edge semiconductors. This gives ASML a big advantage. ASML must join the semiconductor demand boom driven by AI.
ASML expects modest profits in the near future due to the semiconductor industry's slowdown, despite Nvidia's recent results. This is why its backlog and booking stats matter. ASML can fill many orders in 2024 as it awaits a better market in 2025 with a 39 billion Euro backlog.
ServiceNow (NYSE: NOW) offers software solutions to improve technology, employee, and industry workflows. The company uses a SaaS subscription model.
SaaS businesses' top-line growth and high margins captivated investors during the 2020–2021 market bubble. Over the past year, investors have prioritized profitability, causing many of these companies' growth-at-all-costs plans to fail. Fortunately, ServiceNow has shown that its business is not typical SaaS.
First, ServiceNow is developing steadily. While its year-over-year revenue growth has slowed, it has never fallen below 20% as a public business. It boosted its subscription revenue (the majority of its revenue) by 26% in fiscal 2023 and expects to expand it by 22% in 2024.
Customers that spend more and are sticky support this growth. Every new client cohort has spent more, and the company's renewal rate is 98%–99%. ServiceNow also grew its customer base. Customers with $1 million or more in annual contract value have increased 41% in two years.
ServiceNow has maintained growth while other SaaS providers have slowed. This shows its platform is vital to many firms. ServiceNow is one of the greatest stocks to buy right now due of its bright future.
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