Growth Stocks provide a reliable way for investors to build lasting wealth for retirement. Patiently owning stocks of great companies is the closest thing to putting your money on autopilot for long-term capital appreciation.
To support you on your wealth creation journey, here are two exceptional companies that dominate their respective industries and remain solid stocks to buy in the new year and hold for a lifetime of compounding returns.
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Netflix(NASDAQ:NFLX) has been one of the best-performing growth stocks in recent decades, and it enters 2026 stronger than ever. Following the idea that winners tend to keep winning, Netflix remains a solid choice. Its revenue and profits are growing at a healthy pace, with the streaming leader seeing record viewership in the US and UK in the third quarter.
The current agreement to acquire Warner Bros. is a bold move that could solidify Netflix’s competitive position in the entertainment industry. It will add iconic film and television content dating back a century, as well as HBO and HBO Max. This means that Netflix could soon own the rights to Game of ThronesTHE DC UniverseAnd Friendswhich is just a small sample of the value this deal brings to Netflix.
The $82 billion offer is a good deal for Netflix, considering the company spent $17 billion last year on content production. Netflix buys a century’s worth of content for what it spends in five years. This additional content will make Netflix’s service more attractive to current and new subscribers.
It’s also a good deal for Warner Bros., as the movie studio can leverage Netflix’s vast financial resources and talent to better monetize its film library. Despite a competing offer from PrimordialNetflix is confident in its ability to close the deal, given the potential to create a truly unstoppable entertainment juggernaut over the long term.
Even without this acquisition, Netflix would still be an excellent investment. Analysts already expected the company earnings per share is expected to grow at an annualized rate of 23% over the next few years. However, the addition of Warner Bros. will improve Netflix’s long-term earnings growth prospects, as the company expects to realize approximately $2.5 billion in cost savings following the full integration of Warner Bros. operations.
With over 300 million subscribers and steady growth, Netflix has a bright future ahead of it, making the stock a solid investment for 2026.
With artificial intelligence (AI) poised to transform businesses and entire industries, Microsoft(NASDAQ:MSFT) is well placed to lead the way. It all starts with its strong cloud computing infrastructure, with Microsoft Azure being one of the fastest growing cloud platforms for businesses.
The software leader continues to see strong demand for AI cloud services. Revenue from Microsoft Cloud, which includes Azure and other cloud services, reached $49 billion last quarter, a solid 26% increase from last year’s quarter. It also reported nearly $400 billion in remaining performance obligations, a 50% year-over-year increase, reflecting substantial and growing commitments from large enterprise clients.
The enormous number of engagements implies that Microsoft is seeing more demand for AI services than its available computing capacity can handle in its data centers. This is driving significant investments in recruiting talent and securing larger data center infrastructure. Microsoft has historically earned high returns on invested capital, indicating that these investments are expected to generate further profit growth and increase the stock’s value over the long term.
CEO Satya Nadella said during the latest earnings call that Microsoft is building a “global cloud and AI factory.” Its Azure AI Foundry serves 80,000 customers. Companies use Azure to develop their own AI software applications with their proprietary data. This helped drive a 40% year-over-year increase in Azure revenue last quarter, indicating a significant market opportunity.
Microsoft is fully committed to capitalizing on AI. With $147 billion in trailing 12-month operating cash flow, the company has the financial resources to aggressively invest in this transformative technology and expand its competitive advantage.
Microsoft is one of the strongest companies you can invest in for the long term. It can make significant investments in AI infrastructure while still paying regular dividends to improve shareholder returns.
Before buying Netflix stock, consider this:
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John Ballard has no position in any of the stocks mentioned. The Motley Fool ranks and recommends Microsoft, Netflix and Warner Bros. Discovery. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
