“It’s not about timing the market, but time in the market.”
Investing is full of clichés that still ring true.
If you’ve found companies that can deliver returns over the long term, it’s best to hold them through market cycles, and benefit from the power of compounding, instead of reacting to short-term price movements.
This article looks at growth stocks – Amazon (NASDAQ: AMZN), Nvidia (NASDAQ: NVDA), and Netflix (NASDAQ: NFLX) – that are likely to continue generating long-term value for shareholders.
These compounders share common traits: they serve large markets, boast strong competitive advantages, demonstrate consistent revenue and earnings growth, and can reinvest at high returns.
Amazon: The Platform Powerhouse
Amazon dominates the huge e-commerce and cloud computing sectors.
In the US, the former is expected to generate US$2.9 trillion in revenue by 2030, while the latter is expected to reach US$637 billion.
Amazon’s status as the top dog in both e-commerce and cloud computing in the US enables it to benefit from economies of scale.
It has also leveraged its dominant e-commerce position to build a significant advertising business.
The company increased its profit margin while growing revenue. In 2015, sales were US$107 billion, with US$2.2 billion of income from operations.
Its operating margin was 2.1%.
A decade later, sales were US$717 billion, and operating income was US$80 billion – the operating margin quintupled to 11.2%.
Amazon’s cloud computing business, Amazon Web Services (AWS), has contributed significantly to these results.
In 2015, AWS revenue was US$7.9 billion, and operating income was US$1.9 billion.
By 2025, these had jumped to US$129 billion and US$46 billion respectively.
Another key growth driver has been the advertising business.
Between 2021, when Amazon first disclosed advertising revenue separately, and 2025, its share of overall revenue rose from 6.6% to 9.6%.
These businesses provide Amazon with cash to reinvest and further grow the business: its return on equity (ROE) is 22.3%.
Nvidia: The AI Leader
Nvidia has been one of the biggest beneficiaries of the AI boom, thanks to its best-in-class graphics processing units (GPUs), which have benefited from the explosion in demand for computing power to train large language models (LLMs).
McKinsey predicts that global spend on semiconductors could hit US$1.8 trillion by 2030.
But it’s not just powerful chips that give Nvidia a competitive advantage.
Its CUDA software platform also provides a unique edge – developers use CUDA to program Nvidia’s GPUs to perform various functions, including training LLMs.
This creates switching costs, as moving to other chips requires learning a different software language.
Traditionally, Nvidia’s GPUs and CUDA have dominated the AI training market.
Recently, the company announced NVIDIA Dynamo 1.0, which allows for generative and agentic inference at scale.
AI workflows will increasingly focus on inference, which involves generating responses from LLMs.
Nvidia is positioning itself to benefit from the next phase of AI development.
The company has grown exponentially since ChatGPT was unveiled to the public in November 2022.
In its fiscal year ended January 2022 (FY2022), the chipmaker reported revenue of US$27 billion and operating income of US$10 billion, for a margin of 37%.
In FY2026, these increased by around 8x and 13x respectively, to US$216 billion and US$137 billion, for a margin of 63%.
The company’s ROE is currently 101%, providing attractive opportunities for compounding future growth.
Netflix: The Global Growth Champion
The market for global streaming is forecast to reach US$417 billion by 2030, and no company is better-placed to benefit from this than Netflix.
With 325 million paying subscribers, it is the leading streamer globally, ahead of peers such as Amazon Prime and Disney+.
Crucially, there’s still room to grow, especially in emerging markets.
Netflix’s penetration rate in the US and Canada is around 23%, but is far lower in Asia Pacific (1%) and Latin America (8%).
Netflix’s global scale also provides it with several competitive advantages.
For example, an increasingly globalised streaming industry means that audiences worldwide want access to a broad range of content.
A globalised Netflix is better able to meet this demand, as the success of shows such as Squid Game (from South Korea) has demonstrated.
The fruits of this strategy are reflected in the company’s financials.
In 2015, revenue was US$6.8 billion, and operating income was US$306 million, giving a margin of 4.5%. In 2025, revenue was US$45.2 billion, and operating income was US$13.3 billion, translating to a 29.5% margin.
With the company declining to enter a bidding war with Paramount over Warner Bros. Discovery, and declining to raise its bid for the latter, it can reinvest what would have otherwise been spent on the deal on its own business, which offers an ROE of 43%.
What Investors Should Watch
Notwithstanding the attractiveness of these companies, investors must consider additional factors.
First, investors should consider whether these companies can continue growing sustainably.
Nvidia, in particular, is susceptible to an AI bust.
Second, investors also need to consider if they are overvalued.
As of 31 March 2026, the companies’ forward price-to-earnings (P/E) ratios were 25.8x (Amazon), 21.5x (Nvidia), and 29.2x (Netflix).
This compares to the Nasdaq 100 Index’s average forward P/E ratio of 21.1x, suggesting they are trading at an equivalent or premium valuation to their peers.
Third would be whether these companies may be impacted by industry competition.
For example, Netflix may be negatively affected if Disney+ decides to take a more aggressive approach to pricing, forcing it to lower prices too.
Meanwhile, Nvidia’s competitors are rolling out alternatives to CUDA.
Get Smart: Great Businesses Reward Patience
It may be difficult to focus on the long term amidst short-term market noise, from geopolitics to the impact of AI.
However, companies like Amazon demonstrate the power of a business that can generate sustainable growth over time.
For investors, the challenge lies not just in identifying these businesses, but also having the discipline and patience to hold them for long enough to benefit.
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Disclosure: Silas H. does not own shares in Amazon, Nvidia, or Netflix.
