Three US Stocks Worth Watching: Unlocking Long-Term Value in Today's Market

Why Quality Matters More Than Price Alone

When evaluating investment opportunities, many overlook a fundamental principle: finding excellent companies at reasonable prices often delivers better returns than chasing bargains on mediocre businesses. This rings especially true for those with a five-to-ten-year investment horizon. The question becomes: which US stocks combine strong earnings growth potential with reasonable valuations?

Three names deserve consideration—each operating in different sectors, yet all positioned to benefit from structural market trends unfolding over the coming years.

Amazon: The Tech Giant Still Acting Like a Startup

Amazon [(NASDAQ: AMZN)] might seem an unlikely candidate for sustained outperformance, given its $2.7 trillion market cap and trajectory toward becoming the world’s largest revenue-generating company. Yet here’s what sets it apart from other mega-cap peers: rather than returning capital to shareholders, Amazon relentlessly reinvests profits into emerging opportunities and experimental ventures.

This philosophy reshaped retail, created the cloud computing industry, and continues driving double-digit growth despite the company’s enormous scale. Last quarter’s results underscored this momentum, with acceleration evident across e-commerce, digital advertising, and AWS segments.

The recent OpenAI partnership—a $38 billion arrangement expandable over seven years—highlights AWS’s competitive edge. By making OpenAI’s models available through Amazon Bedrock, the company reinforces its position as the infrastructure backbone for AI innovation, even while maintaining a competing investment in Anthropic.

Beyond cloud and AI, Project Kuiper, launching later this year, opens an entirely new revenue stream through satellite broadband. Meanwhile, e-commerce still represents a fraction of the $32 trillion global retail market, and cloud computing continues capturing share from traditional IT spending—both runways remain expansive for years.

Vita Coco: A Consumer Brand Riding a Category Wave

While technology dominates headlines, consumer beverage brands can generate substantial long-term returns. History proves this: Coca-Cola delivered exceptional wealth for long-term holders, and more recently, Monster Beverage and Celsius Holdings capitalized on emerging drink categories.

Vita Coco [(NASDAQ: COCO)], with a $2.3 billion market cap, commands roughly 42% of the US coconut water market and even larger shares in Europe. What’s striking: despite this dominant position, revenue grew 37% last quarter, with the core Vita Coco brand accelerating at 42%.

The company’s founder attributes this to coconut water transitioning from niche to mainstream globally. Supporting this thesis: the category expanded 22% year-to-date across the US, 32% in the UK, and surpassed 100% growth in Germany. Tariff headwinds are currently pressuring margins, though price increases are offsetting some impact.

Trading at roughly 35 times earnings might appear expensive, yet if the coconut water category achieves mainstream status comparable to energy drinks or sports beverages, current valuations could prove reasonable for long-term investors betting on substantial category expansion.

On Semiconductor: The Power Chip Specialist Positioned for AI Infrastructure

On Semiconductor [(NASDAQ: ON)] manufactures power and sensing chips, traditionally serving electric vehicle and power infrastructure markets. The emerging opportunity lies in AI data centers—facilities demanding extreme power efficiency to manage massive electricity consumption.

This requirement is shifting adoption from traditional silicon IGBTs toward compound semiconductors like gallium nitride (GaN) and silicon carbide (SiC). On Semi holds a commanding 35-40% market share in silicon carbide, the more advanced option.

During recent earnings, management disclosed the new data center segment reached $250 million this year, more than doubling the prior year—still just 4% of current revenue, but clearly accelerating. A collaboration with Nvidia on 800-volt DC power architecture for next-generation chips further validates On’s relevance.

Current headwinds are real: EV and industrial chip markets experienced a post-pandemic downturn, pressuring revenue and profits. However, all segments showed mid-single-digit quarter-over-quarter growth in Q3, suggesting cyclical bottom formation.

At 22 times forward earnings estimates, valuation appears reasonable if earnings are indeed at cyclical lows. Recovery in EV markets, combined with surging demand for data center power infrastructure, could unlock substantial upside when these cycles inflect.

The Takeaway: Long-Term Growth Through Structural Trends

These three companies—Amazon, Vita Coco, and On Semiconductor—each benefit from distinct but powerful structural trends: AI and cloud infrastructure adoption, consumer category expansion toward healthier beverages, and the power efficiency requirements of next-generation computing. Each trades at valuations that reward patient investors, particularly those comfortable holding for years while these trends compound.