These two stocks are on a growth trend that is impossible to ignore.
Two stocks in particular seem to have the potential to make their investors millionaires.
The technology industry has already made millionaires of several investors. Consider that the Nasdaq-100 Technology Sector is up 362% since 2014. The index has far outpaced the S&P 500, which has grown 179% over the same period. Technological advances are constantly pushing the market higher, especially with continued innovation that is driving consumers and companies to upgrade hardware and software.
It is no surprise, then, that four of the five most valuable companies in the world are tech leaders, active in areas such as consumer products, productivity software, chip design, and digital advertising. Fast-growing sectors like artificial intelligence and cloud computing are among the biggest growth drivers in the industry today, making their respective market leaders attractive investments.
Here are two tech stocks that can make you a millionaire, worth considering buying in August before it’s too late.
1. Amazon
Amazon shares have seen impressive gains over the years - the stock is up nearly 1,000% since 2014. The meteoric success of its e-commerce and cloud computing business with Amazon Web Services (AWS) has caused its operating income and free cash flow to skyrocket, by 20,000% and 2,000%, respectively, over the past 10 years. The company’s free cash flow has reached more than $48 billion this year, and some analysts speculate that it may be gearing up to pay out its first dividend.
With its highly diversified business model, the retail giant has become one of the best ways to invest in technology. Constant reinvestment over the years has led Amazon to diversify its revenue streams and extend its reach, strengthening its position not only in online retail but also in artificial intelligence, grocery shopping, video streaming, digital advertising, and more.
Amazon’s Q2 2024 earnings reflect the benefit of diversifying its businesses. Revenue increased 10% year-over-year after mediocre growth in its retail business. However, total operating income more than doubled from the previous year to $14.6 billion thanks to strong earnings from AWS.
Amazon’s role in technology is expanding rapidly and has become a key part of its business over the years, exposing the company to markets with attractive profit margins. AWS has given Jeff Bezos’ company a powerful position in the field of artificial intelligence. Meanwhile, its Prime Video streaming service gives it a powerful advertising tool and a new growth catalyst.
Amazon’s P/E of 40 is significantly lower than its five-year average of 89. The company has made many investors millionaires in the past, and it’s probably not done doing that yet.
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2. Nvidia
After more than a year of skyrocketing stock prices and mind-blowing quarterly earnings, Nvidia is a no-brainer. The company’s stock has risen 132% since last August, with quarterly operating income and free cash flow up 112% and 62%, respectively.
A recession-driven tech selloff over the past month has sent Nvidia’s stock down 16%. However, steady earnings growth and its dominance in the industry mean the decline only reinforces the bullish case for the company’s stock. In other words, it looks like a bargain-basement investment opportunity.
In the first quarter of its fiscal 2025, Nvidia reported revenue up 262% year over year, while operating income jumped 492%. The company benefited from significant growth in its data center segment, with sales of graphics processing units (GPUs) for AI increasing. Total revenue for the quarter beat Wall Street forecasts by more than $1 billion.
Stellar earnings have become a habit for Nvidia, which has beaten expectations for the past four quarters. The company will report its second-quarter results on August 28, and it will likely continue to trend positive, especially given rival Advanced Micro Devices’ stellar results last month. AMD has the second-largest share of the AI chip market after Nvidia and posted a record 115% year-over-year increase in data center revenue in Q2 2024.
Nvidia’s price-to-earnings (P/E) ratio is high at 62, but well below its five-year average of 80.
| DISCLAIMER The information and considerations contained in this article should not be used as the sole or primary basis for making investment decisions. The reader retains full freedom in his or her investment choices and full responsibility in making them, since only he or she knows his or her risk appetite and time horizon. The information contained in the article is provided for information purposes only and its disclosure does not constitute and should not be considered an offer or solicitation to the public to save. |
Original article published on Money.it Italy 2024-08-17 15:33:00. Original title: Queste 2 azioni tech possono farti diventare milionario
