The technology industry is known for consistently experiencing strong growth over time, so it's no surprise that four of the top five most valuable companies in the world are tech companies. Microsoft (Nasdaq: MSFT), apple, NVIDIA (NASDAQ: NVDA)and alphabet.
The success of these companies Nasdaq 100 Technology SectorIt has increased by 419% in the past 10 years. S&P 500It recorded a growth of 179% during the same period.
The technology industry has created many billionaires over the years, but it's probably not over yet. Rapidly expanding markets such as artificial intelligence (AI), self-driving cars, virtual reality, and cloud computing have huge potential over the next few years. Many have yet to reach their limits and could have a lot to offer new investors in the long term.
Here are two billionaire-making tech stocks to watch.
1. NVIDIA
Whether you're a professional trader or take a more casual approach to the stock market, you're likely aware of Nvidia's meteoric growth over the past year: Since last May, the company's shares have risen 173% alongside surging revenue.
On May 22, NVIDIA reported its financial results for the first quarter of fiscal year 2025 (ending April 2024), again beating Wall Street expectations. The chipmaker's revenue grew 262% year over year during the quarter, beating expectations by more than $1 billion. Non-GAAP (adjusted) earnings per share were $6.12, beating analysts' expectations by $0.54.
In the first quarter of 2025, Nvidia continued to benefit from its dominant role in AI: The company's data center division saw revenue grow 427%, with sales of AI chips growing strongly.
But let's not forget that Nvidia is about more than AI. As a major chipmaker, the company benefits from tailwinds in the tech industry. For example, Nvidia's gaming division includes revenue from chips sold to consumers who use the company's hardware to power custom-built gaming PCs. The division also benefits from Nvidia's exclusive role as a supplier of chips to gaming consoles. NintendoSony's video game console, the Switch, has sold 141 million units to date.
Gaming revenue in the first quarter of 2025 reached approximately $3 billion, up 18% year-over-year.
In addition, Nvidia's hardware TeslaTesla's chips in electric and autonomous vehicles are essential to the company's self-driving technology, and demand for chips in this industry is expected to continue to grow. Nvidia CFO Colette Kress' comments underscore the company's huge potential in the automotive space, which it expects to be “the largest enterprise vertical in the automotive industry.” [the] Data Centres [segment] this year. “
Despite Nvidia's stock price soaring over the past year, the company remains an attractive investment: its price-to-earnings growth (PEG) ratio has plummeted to less than 1, making it highly valued and a great time to buy.
2. Microsoft
Like Nvidia, Microsoft has also attracted significant attention from Wall Street over the past year. The company was an early investor in AI, investing $1 billion in ChatGPT developer OpenAI in 2019. This lead has given Microsoft exclusive access to some of the most advanced AI models in the industry, allowing it to integrate the technology across its entire product lineup.
Since the beginning of 2023, Microsoft has been adding AI capabilities to its Office productivity suite, improving its Bing search engine with elements of ChatGPT, expanding its library of AI services to power its cloud platform Azure, and most recently unveiling a new series of computers called Copilot+ PCs, equipped with a special Neural Processing Unit (NPU) to perform various AI tasks more efficiently.
The move could put Microsoft in a more competitive position with Apple, which is also developing its own AI PC products. Microsoft's lead in computing could give it an advantage as Apple tries to catch up in AI.
Microsoft reported its third-quarter fiscal 2024 results last month. Revenues rose 17% year over year and beat expectations by more than $1 billion. The company's AI efforts appear to be boosting several areas of its business, with Productivity and Business Processes revenues up 12% on increased sales of Office products. Meanwhile, Microsoft's Intelligent Cloud division saw revenues grow 21%.
Microsoft's stock has soared nearly 1,000% over the past decade, no doubt creating a few billionaires in the process. But the rise of AI means the tech giant still has plenty of room to grow. Its PEG ratio of 1.5 suggests the stock is a bit overvalued.
But Microsoft's status as the world's most valuable company and its huge cash reserves mean its shares deserve a high valuation and could make you a billionaire if you make the right investment.
Should I invest $1,000 in Nvidia right now?
Before you buy Nvidia stock, consider the following:
of Motley Fool Stock Advisor The analyst team Top 10 Stocks Here are the stocks investors should buy now… and Nvidia wasn't among them. The 10 stocks selected have the potential to generate big gains over the next few years.
Things to consider NVIDIA This list was created on April 15, 2005…If you invested $1,000 at the time of recommendation, That comes to $671,728.!*
Stock Advisor With portfolio construction guidance, regular updates from our analysts, and two new stock picks every month, we provide investors with an easy-to-follow blueprint for success. Stock Advisor The service is More than 4 times First S&P 500 recovery since 2002*.
View 10 stocks »
*Stock Advisor returns as of May 28, 2024
Suzanne Frey, an executive at Alphabet, is a director of The Motley Fool. Dani Cook has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet, Apple, Microsoft, Nvidia, and Tesla. The Motley Fool recommends Nintendo and recommends long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
The 2 Tech Stocks That Will Make Millionaires was originally published by The Motley Fool.
