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2 Top Tech Stocks That Can Double by 2030
2 Top Tech Stocks That Can Double by 2030

Yahoo

time2 days ago

  • Business
  • Yahoo

2 Top Tech Stocks That Can Double by 2030

Nvidia continues to meet insatiable demand for AI chips in the data center market. Lam Research is seeing its addressable chip market expand as AI-based demand continues to grow. 10 stocks we like better than Nvidia › Investing in innovative technology leaders can help you build wealth over the long term. The tech-centric Nasdaq Composite has doubled in the last five years, and there are still opportunities to buy top tech stocks at attractive valuations relative to their growth prospects. Here are two companies serving the increasing demand for artificial intelligence (AI) chips whose shares could potentially double in value by 2030. Nvidia (NASDAQ: NVDA) is the leading supplier of graphics processing units (GPUs), which are in high demand to power AI workloads in data centers. After the stock dipped earlier this year over concerns about potential softening in data center spending, Nvidia reported another quarter of strong growth that has its stock closing in on new highs. Revenue was reported at $44 billion, up 69% year over year and 12% over the previous quarter. Despite missing out on $2.5 billion in revenue for its H20 chip over new export requirements to China, the company still managed to beat Wall Street's revenue estimate in the quarter. CEO Jensen Huang spoke to how strong the demand for AI is in the earnings report. "Countries around the world are recognizing AI as essential infrastructure -- just like electricity and the internet -- and Nvidia stands at the center of this profound transformation," he said. AI spending is expected to boost the global economy by $20 trillion by 2030, according to IDC. AI is the next industrial revolution, and it spells enormous growth potential for the leading AI chip supplier. Nvidia continues to benefit from growing demand from the leading cloud service providers like Amazon Web Services and Alphabet's Google Cloud. Demand based on cloud applications made up nearly half of the chipmaker's data center sales last quarter, which grew 73% year over year to $39 billion. It is providing AI computing systems for a variety of markets, including autonomous driving and robotics. These are potentially multitrillion-dollar industries that could drive long-term demand for the company's chips. Nvidia faces increasing competition from other technology leaders designing their own custom semiconductors. But these chips are still no comparison for the general-purpose computing power its GPUs provide. The company should continue to see growing revenue this year as it ramps up its Blackwell computing system, which provides a significant boost in performance for AI workloads. Analysts expect earnings to grow 29% on an annualized basis over the next several years. Assuming the stock continues to trade at the same forward price-to-earnings multiple of 33, this would be more than enough earnings growth to double the share price in five years. Another company playing a vital role in meeting increasing demand for chips is Lam Research (NASDAQ: LRCX). Its expertise is in providing etch and deposition equipment, which are essential steps in the chip manufacturing process. The rise in demand has sent the stock up more than 200% in the last five years. Shares are currently trading about 25% off previous highs, which sets up a good buying opportunity. Lam just reported another solid quarter of growth with revenue surging 24% year over year. While there is near-term uncertainty for the semiconductor industry due to the impact of tariffs, Lam's management is very upbeat about its long-term prospects. CEO Tim Archer said, "Lam's portfolio is the most compelling it's ever been, driving opportunities to expand our addressable market, gain share, and deliver innovative services as deposition and etch intensity increases in the production of advanced semiconductors." The semiconductor industry can be cyclical, but it has grown for decades. AI will be a major catalyst over the next decade. As it relates to Lam, wafer equipment spending grew at an annualized rate of 11% from 2013 through 2024, while revenue grew faster at 14%. The company expects to outperform the industry. As semiconductors continue to transition to more sophisticated designs, Lam's focus on etch and deposition, which create the intricate electrical patterns on a wafer, should drive more growth for shareholders. Analysts expect Lam Research to grow earnings at an annualized rate of 15%, yet the stock trades at a reasonable forward earnings multiple of 21. Investors should expect the stock to climb on par with the company's earnings, which are pointing to a double in five years. Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor's total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. John Ballard has positions in Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Lam Research, and Nvidia. The Motley Fool has a disclosure policy. 2 Top Tech Stocks That Can Double by 2030 was originally published by The Motley Fool

Can AMD Stock Turn a $25,000 Investment Into $1 Million by the Time You Retire?
Can AMD Stock Turn a $25,000 Investment Into $1 Million by the Time You Retire?

Globe and Mail

time3 days ago

  • Business
  • Globe and Mail

Can AMD Stock Turn a $25,000 Investment Into $1 Million by the Time You Retire?

Advanced Micro Devices (NASDAQ: AMD), the popular chipmaker more commonly referred to as AMD, has been off to a sluggish start to 2025. Heading into trading this week, the stock had declined by 9% since January. But with some phenomenal long-term prospects, thanks to its artificial intelligence (AI) chips, could this be a millionaire-making investment? Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » The launch of new AI chips last year and some improved results could give investors reason to be more optimistic about the potential for the stock to deliver some mammoth returns. Below, I'll look at whether a $25,000 investment in the company could grow to at least $1 million by the time you retire. Plenty of growth opportunities ahead Bearish investors may be skeptical about AMD since it has been lagging behind its larger rival Nvidia, but the reality is that the potential is so massive in AI chips that it may not matter who is ahead today. In the long run, there will be room for many AI chip companies to grab market share and achieve considerable growth. For instance, take projections for the AI chip market. By 2032, analysts at Allied Market Research forecast that the industry will be worth $383.7 billion, which translates into a compound annual growth rate of 38.2% since 2023. AMD recently announced a $10 billion collaboration with Saudi Arabia-based Humain "to build the world's most open, scalable, resilient, and cost-efficient AI infrastructure." Humain, which is a new AI company, also announced a strategic partnership with Nvidia. There's big money to be made in expanding AI capabilities in Saudi Arabia and many other parts of the world. Partnering with two top chipmakers is simply a good strategy for Humain and other businesses. In its most recent quarterly earnings report (for the period ending March 29), AMD reported sales totaling $7.4 billion, an increase of 36% from the prior-year period and an acceleration from the 24% revenue growth it posted a quarter earlier. It's a good sign that the company's new Instinct MI325X chips, which were launched late last year as possible alternatives to Nvidia's Blackwell chips, have been doing well. How a $25,000 investment could grow to $1 million For a $25,000 investment to eventually be worth $1 million, it would need to rise to 40 times its original value. Here's a breakdown of what kind of an annual return you would need to average to achieve that, based on the number of years you have until retirement. Years Until Retirement Average Return Needed 20 20.25% 25 15.90% 30 13.08% 35 11.12% Calculations and table by author. The potential for AI to transform industries and affect the entire world is a massive opportunity for AMD. If the company's AI chips offer customers a real alternative to Nvidia's, then this could indeed be a top growth stock to own for years to come. However, AMD is yet to prove that. Additionally, there is the risk of corrections in the market, recessions, and a possible slowdown in tech and AI spending, and that all could affect AMD's growth. While it may be tempting to assume the stock is going to grow at a high rate because of strong demand in the AI chip market, it's underperforming this year despite all the excitement around AI. And all the above rates would mean that it does better than the S&P 500 's long-run average of 10% -- which is by no means a guarantee. Should you buy AMD stock? As a leader in chip design, AMD stock has the potential to be a 40x investment, but it could take more than 30 years before that happens, and even that is by no means a sure thing. It's evident that investors are still on the fence about its long-term prospects as the business still needs to prove that its AI chips can compete and take significant market share from Nvidia. The company's growth has been improving, and if that trend can continue, that may be what gets the stock rallying. Ultimately, I think the business is on the right path forward, and while its valuation may seem rich right now, trading at more than 80 times its trailing earnings. However, as it scales up its operations, its margins should improve; based on analyst projections, the stock trades at a multiple of just 27 next year's profits. Regardless of how quickly you expect it to rise in value, AMD stock can be a no-brainer buy if you're holding on for the long haul; even if it doesn't end up being a 40 bagger, you're likely to earn some great returns from hanging onto the stock. Should you invest $1,000 in Advanced Micro Devices right now? Before you buy stock in Advanced Micro Devices, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Advanced Micro Devices wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $638,985!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $853,108!* Now, it's worth noting Stock Advisor 's total average return is978% — a market-crushing outperformance compared to171%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 19, 2025

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