The Great Recession ended 15 years ago. Buying these stocks at that time would have been a brilliant move.
It has been 15 years since the Great Recession ended. The markets have been quite bullish since then, and over the years investing in tech stocks, particularly those focused on artificial intelligence (AI), has proven to be a smart move.
Back then, it would have been hard to predict the future of AI, but if you invested in some promising tech companies, you'd be huge today. Nvidia (NVDA 3.85%), Amazon (AMZN -0.19%)And Super Microcomputer (SMCI 2.40%) All extraordinary investments have taken place during this time.
Here's how much a $25,000 investment in these three high-powered tech stocks would be worth right now at the end of the Great Recession.
Nvidia: $10.7 million
Nvidia's gains over the past few years alone have been amazing. The stock has been red hot, as its name has become synonymous with AI and chatbots and opportunities related to developing next-generation technologies. Companies are falling over themselves to partner with Nvidia in hopes of not only capturing opportunities, but also to say you're doing business with Nvidia.
Investing just $25,000 in Nvidia at the end of the Great Recession would have made you more than a millionaire, as your investment would have been worth about $11 million. And at this rate, the sign may be eclipsed before the end of the year.
While the stock isn't cheap, trading at 70 times its trailing earnings, investors remain bullish. Shares of Nvidia are up more than 140% this year. The business is tripling its revenue, And investors and analysts still see plenty of future growth on the horizon. Predicting how much higher this already red-hot stock can go is no easy task.
It's hard to go wrong with Nvidia, with its leadership in the AI chip market and the need for its data center products, but investors may want to start considering adjusting their expectations given the stock's massive $3 trillion valuation. Should be given.
Amazon: $1.1 million
Amazon may be the original AI stock, back when investing in AI stocks wasn't really a thing. The tech company has been using AI to revolutionize its logistics business for years, including using robots to move packages and create efficiencies in its warehouses. More recently, it has also joined the chatbot wars with its $4 billion investment in Anthropic, the AI company behind Cloud 3, a rival of ChatGPT.
How this all plays out is still anyone's guess, but it's fair to say that AI will remain a big part of Amazon's world. An example of the potential is its partnership with UVeye, where both companies are using AI to help automate vehicle inspections. Amazon is also planning to monetize an AI-powered version of its Alexa assistant. There is plenty of room for growth for this nearly $2 trillion business to become even more valuable in the future.
A $25,000 investment in Amazon 15 years ago would have made you a millionaire today. Still, with earnings over 50% and without its sales skyrocketing (Amazon's revenue grew 13% year-over-year in the first quarter),This is another tech stock investors should tread carefully. Given its inflated valuation, it might be worth taking a bit of a wait-and-see approach with Amazon stock.
Super Micro: $2.5 million
Super Micro, also known simply as Super Micro, recently overtook Amazon in the last 15 years. It wasn't until the recent hype in AI and chatbots that lit a flame under this tech stock. But now, this fast-growing business is among the most popular AI stocks.
The company provides many solutions for AI, including servers, which has been a huge growth opportunity for businesses. Through the first three months of the year, SuperMicro reported net sales of $3.9 billion — more than triple the $1.3 billion it reported a year ago. Its profits also look impressive, jumping from $85.8 million in the year-ago period to $402.5 million this past quarter.
Super Micro is technically the cheapest stock on this list, with a price-to-earnings ratio of just 43. And its market cap of $45 billion is by far the lightest. Based on these metrics, this is the stock with the most upside, given its strong growth prospects to help companies provide AI solutions and servers. So if you're going to buy AI stocks, Supermicro might be a better option to add to your portfolio right now.
John Mackey, former CEO of Whole Foods Market, is a member of the board of directors of The Motley Fool, an Amazon subsidiary. David Jagielski has no positions in any of the stocks mentioned. The Motley Fool has positions and recommends Amazon and Nvidia. The Motley Fool has a Disclosure Policy.