If you have money you don’t need to pay bills or reduce debt, there are excellent opportunities in the technology sector. Artificial intelligence (AI) and cloud computing are generational investment opportunities that can generate great returns for investors who invest in the right stocks. Here are two that could double your money in the next five years.
NVIDIA is the leader in the graphics processing unit (GPU) market by a wide margin, but cannot control 100% of the market. Its main GPU rival is Advanced Microdevices(NASDAQ:AMD)which sells chips in various markets. The stock has returned 237% over the past five years and could double again by 2030.
AMD’s revenue grew 18% year over year in the third quarter, driven by strong demand for the company’s GPUs and data center central processing units (CPUs). It was a solid quarter, considering two business segments were still experiencing weak revenue performance.
The company’s embedded and gaming segments, including sales of chips used for industrial markets, saw a sharp decline in revenue this year. However, headwinds impacting these segments will become tailwinds.
AMD is preparing to launch new Radeon gaming GPUs in early 2025, which could boost the gaming segment. The integrated segment increased its revenue by 8% compared to the previous quarter, indicating a recovery under way. Management is seeing design achievements gaining momentum, pointing to long-term growth potential.
For now, the data center business is providing enough growth to be a key catalyst for the stock price heading into 2025. By the time AMD’s entire business is firing on all cylinders, the stock could trade much higher. higher than they are now.
The growing demand for advanced data center chips used for artificial intelligence You are getting very high margins. This is why the current Wall Street consensus sees AMD’s earnings per share growing at an annualized rate of 42%. The stock is currently trading at a high price-to-earnings (P/E) ratio of 40, so even allowing for a drop in the P/E multiple, the stock could double by 2030, if not sooner.
Alphabet‘s (NASDAQ:GOOGL)(NASDAQ:GOOG) Google is one of the strongest brands in the world. The company has seven online services with more than 2 billion users, which is a big advantage in the $740 billion digital advertising market. Alphabet shares have more than doubled over the past five years, and opportunities in artificial intelligence and cloud computing could drive enough profit growth to double again by 2030.
Alphabet is seeing strong momentum across the business, including search, where new AI features are improving the usefulness of this daily utility for users. Management says it’s seeing AI features improve user engagement and satisfaction, which bodes well for long-term advertising revenue growth. Alphabet posted a 15% increase in revenue in the third quarter, with advertising revenue up 10%.
Meanwhile, Google Cloud is benefiting from Alphabet’s huge investments in AI infrastructure, including its Gemini AI models and data centers. Google is the third cloud service provider behind Amazon web services and microsoft Azure, according to Synergy Research, but is gaining market share in a growing $313 billion cloud market. Consistent with that opportunity, Google’s cloud revenue grew 35% year over year last quarter.
Most importantly, management’s focus on operational efficiency and improving profitability at Google Cloud boosted its earnings 36% from the prior-year quarter. This is huge growth for a stock that recently traded at a forward P/E of just 22.
The stock’s conservative valuation reflects uncertainty over an antitrust ruling against Google in August. As a remedy, the Justice Department wants Google to ditch its Chrome web browser, among other measures, to prevent Google from gaining an unfair advantage over competitors in online searches.
Regardless of the outcome, Alphabet still has a wide competitive moat, based on the millions, if not billions, of people who use products like Gmail, Search and YouTube every day. It is this large user base that provides the means to generate billions in advertising revenue and positions Google well for long-term growth.
Before you buy Advanced Micro Devices stock, consider this:
He Varied and Dumb Stock Advisor The analyst team has just identified what they believe are the 10 best stocks for investors to buy now… and Advanced Micro Devices was not one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when NVIDIA made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you would have $827,780!*
Stock Advisor provides investors with an easy-to-follow success plan, including guidance on how to build a portfolio, regular analyst updates, and two new stock picks each month. HeStock Advisorthe service has more than quadrupled the return of the S&P 500 since 2002*.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Alphabet executive Suzanne Frey is a member of The Motley Fool’s board of directors. John Ballard He has positions in Advanced Micro Devices and Nvidia. The Motley Fool positions and recommends Advanced Micro Devices, Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
