Many different types of stock millionaires — from the big to the small.
Unless you've been investing from rock bottom, you know that artificial intelligence (AI) is all the rage on Wall Street today. This is for good reason; According to research by Statista, the AI market will reach $184 billion this year and grow even further. $800 billion By 2030
In other words, there's still time to position your portfolio to enjoy these powerful growth tailwinds.
Life-changing investment returns are a high bar and a term perhaps too easily thrown around. However, if you pick the right stocks, a large and growing industry can turn a modest investment into millions.
Here are three potential millionaire-making candidates that long-term investors should check out for their long-term portfolios.
1. The clear winner
Nvidia (NVDA 1.27%) Perhaps there is no secret at this point. The multi-trillion dollar giant has been an early winner as AI companies battle over their GPU chips to power their AI models. Some estimates put Nvidia's market share as high as 90% for AI chips, a near monopoly in what rivals say could be a $400 billion market. Nvidia has long specialized in chips for demanding computing applications, but its proprietary CUDA software has been integral in helping customers easily unlock the chips' full computing power for AI applications. Is.
The bottom line is that Nvidia probably doesn't have enough room to grow in terms of market cap to make you a millionaire. It is already one of the largest companies in the world. However, years of steady AI chip demand could flush Nvidia with enough cash to return profits to shareholders in the form of dividends (yes, Nvidia pays one) and residuals through share repurchases. can withdraw the investment. Nvidia's CEO, Jensen Huang, remains confident in the company's competitive position. He quipped that Nvidia's product was so good that competitors could give it away for free, but that still wouldn't be enough of a price to displace Nvidia.
Time will tell how true this is, as the $400 billion market will attract endless competitive efforts to unseat Nvidia. However, one could argue that it becomes harder for Nvidia to topple the mountain as its chips become more widespread and Nvidia's pockets get deeper.
2. The tech giant of the future
Palantir Technologies (PLTR -2.55%) Fast becoming a household name among investors. Its secrecy in working with the US government and its allies had long shrouded the company in mystery. However, Palantir has aggressively (and successfully) entered commercial markets. Palantir helps build and deploy custom software on its three platforms: AIP, Gotham, and Foundry. Its software can be considered an organization's operating system, analyzing data to support real-time decision-making.
A little imagination can explain the types of use cases Palantir uses within the government, where it is a close partner in the Department of Defense. The company also has $3.6 billion in cash with zero debt. The business is generating cash flow and generally accepted accounting principles (GAAP) as profitable. Analysts believe Palantir's revenue could grow by an average of 26% annually over the long term, meaning profits would double every three years.
That growth rate is enough to compound over a 10- to 20-year time horizon, making Palantir an excellent buy-and-hold candidate. The company still only has 554 customers, leaving plenty of room for customer expansion in the coming years.
3. The underdog you're missing.
Sentinel One (S -0.47%) If someone were asked to list three cybersecurity companies, it probably wouldn't be in the first three names. However, reducing its capacity can cost you money. SentinelOne uses artificial intelligence to detect malicious network and device threats. While traditional antivirus software looks for known threats against a database, AI enables Sentinel One to identify and isolate never-before-seen threats based on how AI detects every file and action on a computer. Charts like It can look for “suspicious” actors.
The company has received accolades for its products, routinely from third-party technology firms such as Gartner. Despite facing stiff competition from legacy security companies and next-generation competitors Crowd strike, SentinelOne is growing fast. The business could exceed $800 million in sales this year and is rapidly improving its margins as it grows revenues faster than expenses. do not worry; Sentinel One has enough cash to fund the business for years until it turns a profit.
Sentinel One has the advantage that it's a high-end product, but it's a small company with a market cap of just $6.5 billion today. Long-term success could easily make Sentinel One stock a multi-bagger, so it's worth keeping an eye on the company as a potential long-term investment with higher risk but higher reward than your run-of-the-mill names. .
Justin Pope has positions in Sentinel One. The Motley Fool has positions in and recommends CrowdStrike, Nvidia, and Palantir Technologies. The Motley Fool recommends Gartner. The Motley Fool has a Disclosure Policy.