Interest in artificial intelligence (AI) has skyrocketed since the launch of OpenAI's ChatGPT last year. This generative chatbot stunned the tech world with its ability to generate human-like conversations based on prompts. OpenAI's platform highlighted how far AI has come and its potential to boost countless industries.
As a result, dozens of technology companies have entered the AI space, and their stock prices have risen significantly for their efforts. NVIDIA and Amazon Their respective dominance in the AI space has helped send their stocks up 228% and 45%, respectively, over the past 12 months.
However, the market is vast and still has plenty of room to grow, predicted to expand at a compound annual growth rate of 37% until at least 2030. Therefore, it may be worth investing in companies whose AI efforts are still in the early stages and that have the potential to experience significant growth in the coming years as the industry develops.
Here are two AI stocks that could make you a millionaire, if you're willing to wait.
1. Intel
stock Intel (Nasdaq: INTC) Since its initial public offering in 1971, its shares have risen more than 115,000%. The company was once the semiconductor giant and has undoubtedly created many billionaires in its time. But over the past decade, the tech giant has struggled, with its stock price falling 3% and revenues plummeting.
But recent trends suggest a recovery is underway, making Intel an increasingly attractive AI investment destination. The downfall of chipmakers and changes in the technology market have forced Intel to rethink its business model. The company has been restructuring its business around the semiconductor foundry market, an industry that is expected to more than double its valuation in 2022 and reach $232 billion by 2032.
Intel has begun building chip factories and foundry expansions around the world, with a primary focus on the United States, where the company plans to build at least four manufacturing facilities. On June 11, Intel temporarily postponed construction of a factory in Israel as it slowly moves forward with the multi-billion-dollar investment and works to get its finances under control. The move came after Intel announced it would sell a 49% stake in its Irish factory for $11 billion.
Chip foundries aren't cheap, but they could be profitable in the long run, especially given Intel's position in AI. Advanced Micro Devices Intel, which prioritizes chip design and outsources much of its manufacturing, could have a lucrative opportunity to become one of the world's largest AI chip makers.
Moreover, Intel's stock is trading at 28 times forward earnings, significantly lower than Nvidia's 48 and AMD's 46. These figures make Intel stock the biggest bargain in AI chips. Along with a promising transformation in its business model, Intel is the stock that will make you a millionaire in the long run.
2. Apple
apple (Nasdaq: AAPL) It entered the AI race late compared to its rivals. Microsoft While Google and Amazon shares have risen 33% and 45%, respectively, since last June, Apple's stock has risen a more modest 16%, but its slow adoption of AI is not unusual for the consumer tech giant.
Apple hasn't always found success by pioneering a technology. Instead, the company tends to sit on the sidelines, watching its competitors perfect their own version, and then launch a product that catapults it to the top of the industry. The tech giant has used this strategy to dominate smartphones, tablets, headphones, and smartwatches.
Before Apple, other companies led these industries, but many of them have since faded. Now, Apple appears to be adopting a similar strategy for AI. The iPhone maker held its Worldwide Developers Conference on June 10, where it unveiled its new AI platform, Apple Intelligence. Since the announcement, the company's shares have soared 12%, overtaking Microsoft to reclaim its position as the world's most valuable company by market capitalization.
Apple Intelligence will be released in September and will bring AI upgrades to the company's entire product lineup, including the iPhone 15 Pro models and Macs and iPads with M1 to M4 chips. New features like speech and image generation, a smarter Siri, and editing tools will make Apple's AI-powered products even better. Meanwhile, the new features could motivate many consumers to upgrade to the company's new devices to access the AI tools.
Apple shares aren't exactly a bargain, with a forward price-to-earnings (P/E) ratio of 33. But compared to Microsoft's forward P/E of 37 and Amazon's P/E of 40, Apple offers a much better value if you're considering investing in AI. The company is still just getting started in this space, so it might be worth investing in before it's too late.
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John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a director of The Motley Fool. Dani Cook has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Advanced Micro Devices, Amazon, Apple, Microsoft, and NVIDIA. The Motley Fool recommends Intel and recommends the following: long January 2025 $45 calls on Intel, long January 2026 $395 calls on Microsoft, short August 2024 $35 calls on Intel, and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
2 Artificial Intelligence (AI) Stocks That Will Make You a Millionaire was originally published by The Motley Fool.
