Finance
3 Millionaire Makers in Artificial Intelligence
The artificial intelligence (AI) market exploded last year after the launch of OpenAI’s ChatGPT reignited interest in the technology. Companies from across the technology sector focused their activities on the emerging sector in an attempt to grab their piece of the $200 billion pie.
The AI market is developing rapidly. Data from Grand View Research predicts that the economy will grow at a compound annual growth rate (CAGR) of 37% through 2030 and reach a valuation of nearly $2 trillion. It’s no surprise that investors have flocked to the sector. Excitement about AI saw the Technology sector Nasdaq-100 index rises 67% in 2023, creating more than a few millionaires along the way.
The market shows no signs of slowing down. AI has the potential to boost many areas, from cloud computing to e-commerce, consumer products, autonomous vehicles, video games and more. As a result, it is not too late to invest in AI and reap significant profits from its development in the long term.
Here are three millionaire AI stocks to buy in April.
1. Nvidia
It shouldn’t be that surprising to see Nvidia (NASDAQ: NVDA) on this list after the company cornered the AI chip market last year. By 2023, Nvidia is estimated to capture a 90% market share AI graphics processing units (GPUs)the chips needed to train and run AI models.
Nvidia’s longstanding dominance in GPUs gave it an edge in AI over many of its competitors, sending its stock up 214% in the past year, along with rising profits.
In its most recent quarter (the fourth quarter of fiscal 2024, which ended in January), the company’s revenue rose 265% year over year to $22 billion. Operating income rose 983% to nearly $14 billion. This monster growth was primarily due to a 409% increase in data center revenue, driven by a spike in AI GPU sales.
The enormous potential of AI suggests that demand for chips will continue to rise, and Nvidia will likely continue to see big profits from the industry.
Meanwhile, the chart above shows Nvidia’s price to free cash flow ratio price-earnings ratio The price-to-earnings ratio has fallen over the past year, indicating that the stock is at one of its best valued positions in twelve months. That’s why now is an excellent time to consider investing in this millionaire AI stock before it’s too late.
2.Microsoft
Microsoft (NASDAQ: MSFT) has grown into a technical colossus that surpasses everything Apple named the world’s most valuable company by market capitalization earlier this year. The tech giant is home to some of the most recognizable brands, including Windows, Office, Azure, Xbox and LinkedIn.
However, this year all eyes were on Microsoft’s growing position in the field of AI. The company was an early investor in AI, putting billions into a private company, OpenAI, in 2019. The lucrative partnership gave Microsoft access to some of the most advanced AI models in the industry and saw its stock price rise more than 45% year over year. .
Microsoft has used OpenAI technology to introduce AI features into its product range and leapfrog its rivals. In 2023, the company added new AI tools to its Azure cloud platform, integrated aspects of ChatGPT into its Bing search engine, and increased productivity in its Office software suite by adding AI features. OpenAI’s models and Microsoft’s massive user base could make the company unstoppable in AI.
Microsoft’s price-to-earnings ratio of 37 means its shares aren’t exactly trading at a bargain. However, its prominence in AI and $67 billion in free cash flow make the stock worth the high price, as it has the resources to continue investing in its business and maintain its leadership position. I wouldn’t bet on Microsoft’s ability to create even more millionaires from investors willing to hold on for the long term.
3. Advanced micro devices
Chip stocks are taking center stage, amid rising interest in AI Advanced micro devices (NASDAQ: AMD) is another attractive investment option. The company was a little late to the AI party when Nvidia beat it to market. However, AMD is investing heavily in the industry and has formed a number of lucrative partnerships that could go far in AI in the long run.
Last December, the company unveiled its MI300X AI GPU. This new chip is designed to compete directly with Nvidia’s offerings and has already attracted the attention of some of the most prominent players in the technology sector, who have signed on with Microsoft and Metaplatforms as customers.
Furthermore, AMD aims to lead its own space in AI by doubling the number of AI-powered PCs. According to research firm IDC, PC shipments are expected to see a big boost this year, with AI integration serving as a key catalyst. And a Canalys report predicts that 60% of all PCs shipped in 2027 will be AI-enabled.
This chart shows that AMD stock has significant potential in the coming years. The company’s earnings could be just over $7 per share over the next two fiscal years. If we multiply that figure by AMD’s forward price-to-earnings ratio of 47, the stock price comes to $329.
Given AMD’s current position, these projections would see its stock price rise 93% by fiscal 2026. In addition to its growth prospects in AI, AMD is a stock that could make you a millionaire.
Should You Invest $1,000 in Nvidia Now?
Consider the following before buying shares in Nvidia:
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Randi Zuckerberg, former director of market development and spokeswoman for Facebook and sister of Mark Zuckerberg, CEO of Meta Platforms, is a member of The Motley Fool’s board of directors. Dani Cook has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Advanced Micro Devices, Apple, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls to Microsoft and short January 2026 $405 calls to Microsoft. The Motley Fool has one disclosure policy.
3 Millionaire Makers in Artificial Intelligence was originally published by The Motley Fool
