The tech market has created a plethora of millionaires over the years. Warren Buffett’s holding company, Berkshire Hathaway, for instance, has allocated more than 40% of its portfolio to this industry. Over time, from 1965 to 2023, Berkshire’s value surged at an estimated compound annual growth rate (CAGR) of 18%, surpassing the S&P 500’s annual return of around 10%. While past achievements do not always ensure future success, the technological advancements in emerging markets such as artificial intelligence (AI), cloud computing, and e-commerce indicate that there is still a lot to gain for investors in the long run. The AI sector alone is projected to expand at a CAGR of 37% until at least 2030, potentially reaching nearly $2 trillion in expenditure.
Therefore, there is much to gain by considering the purchase of these two technology stocks with millionaire-making potential this month.
Intel: Shaping the Future of Chips and AI
Intel (NASDAQ: INTC) once enjoyed eminence in the chip market, particularly renowned for its supremacy in central processing units (CPUs) critical for various computing tasks. Although the company has maintained a dominant market share in CPUs, the surge in AI requirements has shifted the demand towards chips. The rise of Graphics Processing Units (GPUs) has become vital in the tech industry due to their ability to handle demanding workloads associated with AI model training, video game rendering, and cryptocurrency mining.
While these industry shifts initially placed Intel at a disadvantage, they managed to pivot their focus towards AI, potentially delivering substantial gains in the upcoming years. Intel recently unveiled their AI-enabled Xeon 6 processors and Gaudi 3 accelerator in April, which the company claims to offer “50% on average better inference and 40% on average better power efficiency than Nvidia H100 — at a fraction of the cost.”
In addition to innovative product designs, Intel is significantly expanding its chip manufacturing operations. By producing chips for other enterprises, Intel aims to secure a lucrative position in the AI sector. Although manufacturing is costly and a return on investment may take time, prioritizing the establishment of plants in the U.S. could attract some of the most prominent tech players as clients.
Trading at around 28 times its forward earnings, Intel presents a more appealing value compared to other chipmakers like Nvidia and Advanced Micro Devices. With robust growth prospects across the tech landscape, Intel stands as a potential path to millionaire status through astute investment decisions.
Amazon: Reigning Supreme in E-Commerce and AI
After a remarkable growth phase, optimism surrounding Amazon (NASDAQ: AMZN) is hard to ignore. The company has displayed significant progress since the onset of 2023, evident in its stock price appreciation and financial metrics.
Amazon has witnessed substantial growth in its stock price, quarterly revenue, operating income, and free cash flow. Despite this, its price-to-sales ratio of about 3 signals that it remains a bargain buy. The notable turnaround in its e-commerce division, coupled with strategic cost reductions in response to economic downturns in 2022, has paid off handsomely for Amazon, highlighting its adeptness in navigating challenging market conditions.
In the first quarter of 2024, Amazon reported a revenue surge of 13%, surpassing Wall Street estimates by $750 million. Its retail segments achieved sales growth rates between 10% and 12%. Furthermore, the combined operating income of its North American and international divisions reached $6 billion, marking a significant improvement over the previous year’s $349 million in losses.
Amazon’s prominence in online retail has contributed to its global recognition, but it’s their foray into cloud computing that positions it as a potential millionaire-maker. Amazon Web Services (AWS), the company’s cloud platform, recorded a 17% year-over-year revenue increase in its latest quarter, with operating income nearly doubling, exceeding the profits generated by Amazon’s entire retail business.
With substantial investments in expanding its AI capabilities, AWS remains a formidable contender in the burgeoning AI market, projecting sustained earnings growth for years to come.
Given these factors, Amazon’s stock appears to be a wise investment choice, with the company poised to flourish in both e-commerce and the development of its AI segment.