The tech industry has produced many millionaires, with the Nasdaq-100 Technology Sector rising 362% since 2014. The index has the S&P 500 index, which rose 179% over the same period. Technological advancements are continually driving the market forward, with regular breakthroughs requiring consumers and businesses to update their hardware and software.
It’s no surprise then that four of the world’s five most valuable companies are tech leaders, operating in sectors such as consumer products, productivity software, chip design and digital advertising. Growing sectors such as artificial intelligence (AI) and cloud computing are currently among the sector’s biggest growth drivers, making their respective market leaders attractive investments.
Here are two millionaire-making tech stocks you should buy this August before it’s too late.
1. Nvidia
After more than a year of rising stock prices and stellar quarterly profits, it’s probably not surprising that Nvidia (NASDAQ: NVDA) is on this list. The company’s shares have risen 132% since August of last year. Meanwhile, quarterly earnings and free cash flow have risen 112% and 62%, expanding its cash reserves.
A tech sell-off over the past month, sparked by recession fears, has sent Nvidia’s shares down 16%. However, consistent earnings growth and a dominant role in tech means the dip only reinforces a bullish case for its stock, creating an opportunity to invest at a discounted price.
In the first quarter of fiscal 2025, Nvidia posted 262% year-over-year revenue growth, while operating profit increased 492%. The company benefited from significant growth in the data center segment, which reflected a boost in AI graphics processing unit (GPU) sales. Total revenue for the quarter beat Wall Street forecasts by more than $1 billion.
Stellar profits have become a trend for Nvidia, which has beaten expectations for at least the past four quarters. The company is set to report its Q2 2025 results on August 28, and will likely follow its recent growth trajectory following the glowing results of its chip rival, Advanced micro deviceslast month. AMD has the second-largest market share in AI chips after Nvidia and delivered a record 115% year-over-year revenue growth in its data center segment in Q2 2024.
AMD’s win proves that AI still has a lot to offer tech companies. And as an industry leader with an estimated 80% market share of AI GPUs, Nvidia is a millionaire maker worth buying now.
Nvidia’s price-to-earnings (P/E) ratio is high at 62, but still well below its five-year average of 80. The company’s shares have risen more than 2,000% from that average, making it a value compared to Nvidia’s potential.
2. Amazon
Amazon (NASDAQ: AMZN) has delivered impressive profits over the years, with its stock price up nearly 1,000% since 2014. Monster success in e-commerce and cloud computing with Amazon Web Services (AWS) has seen operating income and free cash flow grow by 20,000% and 2,000% respectively in that time. The company’s free cash flow has even topped $48 billion this year, with some analysts speculating that the company is gearing up to pay its first dividend.
Thanks to its highly diversified business model, the retail giant has become one of the best ways to invest in technology. Through consistent reinvestment over the years, Amazon has diversified its revenue streams and expanded its reach with solid positions in online retail, AI, groceries, video streaming, digital advertising and more.
Amazon’s Q2 2024 earnings reflected its diversified business. Revenue rose 10% year over year on moderate growth in its retail business. However, total operating income more than doubled from the prior year to $14.6 billion on significant gains from AWS.
The company posted impressive gains in its digital business during the quarter, with AWS sales up 19% year over year and advertising revenue up 20%. Amazon’s role in technology is expanding rapidly and has become a bigger part of its business over the years, giving it exposure to markets with attractive profit margins. AWS has given the company a strong position in AI. Meanwhile, its Prime Video streaming service gives it a powerful advertising tool and a new growth catalyst.
Like Nvidia, Amazon’s price-to-earnings ratio of 40 is significantly lower than its five-year average of 89. The company has made a lot of millionaires in the past, but it’s probably not done yet. The stock is an attractive option this year.
Should You Invest $1,000 in Nvidia Now?
Before you buy Nvidia stock, here are some things to consider:
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, 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 has positions in and recommends Advanced Micro Devices, Amazon and Nvidia. The Motley Fool has a disclosure policy.
2 Millionaire-Maker Technology Stocks was originally published by The Motley Fool
