Your stock portfolio can become one of your biggest assets that can be passed on to generations. One would so wish to inherit Apple’s shares from their grandparents, who invested $10,000 back in the 1990s. You would have inherited millions. While you did not enjoy generational wealth, you can be the one in the family to begin creating wealth that your children and grandchildren can inherit and thank you for.
Three stocks to build generational wealth
To build such wealth, you need to find the future Apple and Amazon that can grow and change the way we live and work. You need growth stock companies that could become integral to one’s daily life.
Nvidia stock
Nvidia (NASDAQ:NVDA) is shaping the future of artificial intelligence (AI) data centres, network infrastructure, the cloud, and autonomous cars. It is not only building the chip that will power AI, but also developing an ecosystem of AI applications. Nvidia has invested in AI applications in medical, manufacturing, automotive, and many more verticals. The present-day Nvidia is monetizing the AI infrastructure investment opportunity.
Future Nvidia could monetize on the AI ecosystem, just as Microsoft and Alphabet are monetizing the cloud and digital ecosystems and investing in next-generation startups that can generate shareholder wealth.
Shopify stock
Shopify (TSX:SHOP) stock can grow your wealth in the next two to three decades as it builds an entire ecosystem of online and omnichannel retail in North America and other international locations. Its Shopify Pay and AI tools are attracting big brands to open their Shopify store. The company has reported and even sustained operating profits for eight quarters in a row.
However, this is a stock to be accumulated during its off-season, which is between March and June. The holiday season rally can give you a 50-100% annual return. You could consider selling the stock every year during the January peak and buying it in March or April.
Ballard Power Systems
While the above two stocks are already giving returns, Ballard Power Systems (TSX:BLDP) is a futuristic stock that is yet to pick up momentum. The company is among the pioneers in hydrogen fuel cell technology for commercial vehicles like buses, trucks, rail, marine, and stationary energy. It has successfully deployed hydrogen fuel cells in buses and has a few regular clients, like Siemens.
However, the stock price of Ballard Power Systems could take another seven to 10 years to start generating wealth. It is because hydrogen fuel cell technology is still expensive for widespread adoption. Ballard Power Systems works with companies at three stages:
Development: It could take a year at the most to develop a technology platform with original equipment manufacturers (OEMs).
Demonstration: It could take one to five years to test the product and demonstrate efficiency, cost of ownership, and other metrics to make it commercially viable.
Deployment: Once the product demonstration succeeds, product orders flow in quantity, and that is where revenue and economies of scale lie.
Since 2020, Ballard Power Systems has converted nine clients from development to the deployment stage. It has an order backlog of $146.2 million. However, the company is far from being profitable. Its 2025 operating expense guidance is between $100 million and $120 million as it invests mostly in research and product development, looking for ways to reduce product costs and invest in advanced manufacturing, sales, and marketing.
Several countries have allocated budgets for hydrogen fuel deployments, and Ballard Power Systems applies for grants to make this technology commercially viable. Just as mobile phones were in the early 1990s, expensive to own and operate, they became the biggest wealth creators in the early 2010s. Ballard Power Systems may need another eight to 10 years to mature this technology for widespread usage.
Investor takeaway
You could consider accumulating the above shares at the dip and holding them for decades. One thing you should keep an eye on is disruptive technology and technology adoption. If these companies stop innovating, they will fall behind and stagnate the wealth-creation process.
