The S&P500 The index is treating investors well, up 52% since October 2022, when it hit its most recent low. Many factors have contributed to the bull market, but chief among them is the excitement about technology stocks.
Advances in markets such as artificial intelligence (AI), cloud computing, self-driving cars and virtual/augmented reality illustrate a major shift in the technology industry that could mean a lucrative future for the companies involved.
Many of the tech sector’s most prominent players have a reputation for delivering significant profits over the long term, giving patient shareholders the opportunity to become millionaires with the right investment. With many areas of technology seemingly still in their infancy, this could be an excellent time to invest and potentially benefit from the market’s development.
So here are two top tech stocks that could make you a millionaire.
1. Nvidia: Powering the tech industry with its hardware
Nvidia (NASDAQ: NVDA) has experienced an impressive growth spurt since the beginning of 2023, with a share price increase of 828%. Its success saw it surpass Microsoft (NASDAQ: MSFT) And Apple as the most valuable company in the world, with a market capitalization of more than $3.3 trillion. The chipmaker has undoubtedly created many millionaires on its way to the top spot and shows no signs of slowing down, suggesting that it is not too late to make a long-term investment in Nvidia.
For years, Nvidia was best known for its role in the video game market, with its graphics processing units (GPUs) becoming the go-to for millions of consumers building custom high-performance gaming PCs. While the company is still very active in gaming, the focus shifted to Nvidia’s efforts in AI.
Advances in generative technology have increased the need for powerful GPUs, chips capable of handling the heavy workloads required to train AI models. And as the biggest name in GPUs, Nvidia was positioned to immediately start supplying chips to AI developers around the world, causing revenues to skyrocket.
Despite increased competition, Nvidia maintains an estimated 80% market share in AI chips, indicating enormous growth potential as the industry evolves.
In addition to AI, Nvidia supplies its chips to gaming consoles, self-driving cars, cloud platforms and more. The chipmaker has growth catalysts in the technology space and will likely continue to reward investors for years to come. Despite the recent growth, Nvidia’s price-to-earnings growth ratio remains at less than 1, suggesting the stock is a stock worth picking up this month.
2. Microsoft: Getting AI into the hands of billions of consumers and businesses
Like Nvidia, Microsoft got a head start in AI. The company is the largest investor in OpenAI’s ChatGPT and has raised around $13 billion in startups since 2019. The partnership gave Microsoft access to some of the most advanced AI models in the industry, which the company has in turn used to introduce generative features across the industry. its product offering.
Powerful brands like Windows, Office and Azure have made Microsoft the biggest name in productivity software, with billions of consumers and businesses relying on its offering every day. The combination of OpenAI’s technology and Microsoft’s software gives the company nearly endless opportunities to promote its AI products and become a leading growth engine in public AI adoption.
Microsoft took advantage of this by adding a range of AI features to its Office productivity suite, including an AI assistant called Copilot. The company has also integrated aspects of ChatGPT into its search engine Bing and expanded its library of AI tools on its cloud platform Azure.
The tech giant’s efforts are paying off: revenue rose 17% year over year in the third quarter of 2024 (ending in March), while operating profit rose 23%. Microsoft benefited from a 21% increase in cloud sales and a 12% increase in the ‘productivity and business processes’ segment, reflecting a boost from AI in both segments.
Microsoft shares trade at 37 times forward earnings, suggesting this isn’t exactly a bargain. However, Microsoft’s dominant role in the technology sector, over $70 billion in free cash flow, and solid prospects in AI make Microsoft’s stock worth its premium price tag and one you should consider investing in now.
Should You Invest $1,000 in Nvidia Now?
Consider the following before buying shares in Nvidia:
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Dani Cook has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Apple, 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 a disclosure policy.
2 Top Tech Stocks That Can Make You a Millionaire was originally published by The Motley Fool
