Many different types of stocks, from large to small, can make millionaires.
Unless you've invested from rock bottom, you may know that artificial intelligence (AI) is all the rage on Wall Street today. There's a good reason for that. According to a study by Statista, the AI market will reach $184 billion this year. $800 billion By 2030.
In other words, there's still time to position your portfolio to take advantage of these strong growth tailwinds.
Life-changing investment returns are a high bar and perhaps a term that is thrown around too easily. But with the right stock picks, large growth industries can turn modest investments into millions of dollars.
Here are three potential millionaire candidates that long-term investors should check out for their long-term portfolios.
1. Clear winner
Nvidia (NVDA 1.27%) It's probably not a secret at this point. As AI companies compete for GPU chips to power AI models, the multitrillion-dollar giant has emerged as an early winner. Competitors say NVIDIA's market share for AI chips is estimated at 90%, giving it a near monopoly on what could be a $400 billion market. Nvidia has long specialized in chips for demanding computing applications, and its proprietary CUDA software makes it easy for users to unleash the full computing power of their chips for their AI applications. It was essential for me to be able to do that.
The point is, Nvidia probably doesn't have the room to grow its market cap enough to become a billionaire. It is already one of the largest companies in the world. But years of steady demand for AI chips have helped Nvidia drive outstanding investment returns by returning profits to shareholders in the form of dividends (yes, Nvidia pays dividends) and stock buybacks. There is a possibility that you will be flush with enough cash. His CEO at Nvidia, Jensen Huang, is confident in the company's competitiveness. He quipped that Nvidia's products are so good that competitors could offer them for free, but that he still wouldn't be valuable enough to replace Nvidia.
Only time will tell how true that is, as the $400 billion market attracts endless competitive efforts to unseat Nvidia. But some might argue that the more popular NVIDIA's chips become and the deeper NVIDIA's pockets become, the harder it will be for NVIDIA to knock it off the mountain.
2. Future tech giants
Palantir Technologies (PLTR -2.55%) is becoming increasingly popular among investors. The company has long been shrouded in mystery due to secrecy in its cooperation with the US government and its allies. However, Palantir has been actively (and successfully) pushing into the commercial market. Palantir helps him create and deploy custom software on three of his platforms: AIP, Gotham, and Foundry. The software can be thought of as an organization's operating system, analyzing data to help make decisions in real time.
With a little imagination, we can illustrate what use cases Palantir could enable within the government, a close partner across the Department of Defense. The company also has zero debt and a generous $3.6 billion in cash. The business generates cash flow and is profitable under generally accepted accounting principles (GAAP). Analysts believe Palantir's profits could grow at an average annual rate of 26% over the long term, meaning profits would double every three years.
This pace of growth is enough to get even worse over a 10-20 year period, making Palantir a strong buy-and-hold candidate. The company still only has 554 customers, leaving a lot of room for growth in the coming years.
3. The underdog you lack.
sentinel one (S -0.47%) If you were asked to name three cybersecurity companies, it probably wouldn't be among your first three names. However, underestimating that potential can be costly. SentinelOne uses artificial intelligence to track malicious network and device threats. While traditional antivirus software looks for known threats to your database, SentinelOne looks for never-before-seen threats based on how AI graphs all the files and actions your computer takes. can be identified and isolated. You can search for “suspicious” actors.
The company has received accolades for its products and is regularly recognized by third-party technology companies such as: gartner. Despite facing stiff competition from traditional security companies and next-generation rivals such as cloud strike, SentinelOne continues to grow rapidly. The business could have sales of more than $800 million this year, and profit margins are improving rapidly as revenues grow faster than expenses. Don't worry; SentinelOne has enough cash to fund the business for years until it finally turns a profit.
SentinelOne's advantage is that despite its top-notch product, it is a small company with a current market cap of just $6.5 billion. Long-term success could easily make SentinelOne stock a multibagger, making it worth keeping an eye on as a potential long-term investment with more risk but more rewards than some common names. there is.
Justin Pope has a position at SentinelOne. The Motley Fool has positions in and recommends CrowdStrike, Nvidia, and Palantir Technologies. The Motley Fool recommends his Gartner. The Motley Fool has a disclosure policy.
