As 2024 comes to an end, many investors are reviewing their portfolios and thinking about what stocks to buy in the new year. While it’s not as simple as it sounds, one time-tested strategy is to buy the best companies and hold them for the long term.
Many investors like to invest in growth stocks, hoping that the business’s financial performance translates into stock performance for the shareholders. Here are two companies that are leaders in their industries. Both have competitive advantages that have helped produce strong historical performance and should position them for continued success in the future.
Shopify
Shopify (SHOP -0.20%) seeks to be the one-stop shop for businesses of all sizes to create a web presence that helps build a successful retail company. It provides businesses with a customer-friendly website that’s intuitive to use and leads to sales, plus a robust back-end suite of products that facilitate important business functions like payment processing, inventory management, and shipping.
In addition to the many small and medium-sized businesses and brands that use Shopify, it also has larger, more well-known customers. For example, Vera Bradley, Reebok, and the rock band Weezer are all Shopify customers. The fact that Shopify can service businesses of all sizes increases its total addressable market.
The attractiveness of Shopify’s products is also evident in the company’s financial results. In the most recently reported quarter, gross merchandise volume (GMV) — which is the total dollar value of orders facilitated through Shopify’s platform — grew by 24% to $70 billion. Just two years ago, GMV was only $46 billion.
The momentum in Shopify’s business results suggests that its products continue to be compelling for current and potential customers. Considering the ever-increasing growth of e-commerce, Shopify is positioned to be a winner for years to come.
CrowdStrike
Until this past summer, there’s a decent chance most people, and even some investors, were unaware of cybersecurity company CrowdStrike (CRWD -0.19%). That all changed in July when a faulty software update pushed out by CrowdStrike caused massive outages worldwide, putting the company in the headlines for all the wrong reasons.
As expected, CrowdStrike’s stock took a beating as a result of this misstep, and it has yet to recover five months later.
CRWD data by YCharts
The question for investors is how badly the July outage has damaged CrowdStrike’s business in the long term. While it’s still not entirely clear, there were some clues in the most recent quarterly results. In its fiscal third quarter of 2025 (ended in October), CrowdStrike posted a generally accepted accounting principles (GAAP) net loss of $17 million. By comparison, in the year-ago quarter, the company posted GAAP net income of $27 million.
This drastic swing to a net loss was due to an additional $34 million in operating expenses incurred by the business related to the July incident. Non-GAAP (adjusted) net income, which does not include these additional expenses, increased by 18% year over year.
It remains to be seen if there will be additional impact from the July incident in future quarters, but the stock is still cheaper than it was in July. Over the long term, CrowdStrike should return to its leadership position and regain the trust of its customers. How investors view today’s share price may depend on whether the worst is behind CrowdStrike, or if there might be more impact in the coming quarters.
Jeff Santoro has positions in CrowdStrike and Shopify. The Motley Fool has positions in and recommends CrowdStrike and Shopify. The Motley Fool has a disclosure policy.
