There are plenty of great stocks to own. Not every great stock, however, is necessarily the kind of company that turns ordinary investors into outright millionaires.
With that as the backdrop, here’s a rundown of three tickers that have either already made a bunch of people millionaires, or could do so in the foreseeable future. Don’t sweat the fact that all three of them are technology stocks. The sector is home to the market’s most rewarding stocks, after all. These companies are at the heart of the world’s biggest and best changes.
ASML
You may not be familiar with ASML (NASDAQ: ASML), but there’s a very good chance you’re a regular user of its tech. The company makes equipment that semiconductor manufacturers need to mass-produce computer chips.
It’s called lithography, or in ASML’s case, extreme ultraviolet (or EUV) lithography. In simplest terms, lithography is the process of using light to “etch” a semiconductor into existence. This approach allows for the creation of much smaller circuitry than traditional mechanical approaches to chipmaking, making these chips faster and more energy efficient.
Here’s the thing — the semiconductor industry desperately needs this tech, and is wildly reliant on ASML for it. Credit rating and investment research firm Moody’s estimates the company controls more than 80% of the lithography equipment market, and nearly all of the world’s EUV lithography market. Between its patent protection and the sheer cost of entering the business, ASML is capable of keeping all serious competitors at bay.
That doesn’t mean the company is immune to challenges. It too was caught up in the semiconductor crunch stemming from the COVID-19 pandemic, for instance. Economic weakness could prevent chipmakers from investing in new extreme ultraviolet lithography equipment in the future. Never say never.
Take a step back and look at the bigger picture, though. There’s never going to come a time when the world stops using technology. If anything, we’re going to continue becoming even more reliant on tech. In this vein, Precedence Research believes the worldwide semiconductor market will grow at an annualized pace of more than 12% through 2032. A huge chunk of that growth will be made using ASML’s lithography equipment.
Palantir Technologies
You’re certainly aware that artificial intelligence is now in the mainstream. You may have even tinkered with Google’s AI platform called Bard, or OpenAI’s ChatGPT. What you may not have figured out yet is how such technologies can be commercialized.
Enter Palantir Technologies (NYSE: PLTR).
Simply put, Palantir’s business is “powering AI-assisted decision making, from war zones to factory floors.” The company explains, “We build category-leading software that empowers organizations to create and govern artificial intelligence — across public and private networks.”
Take its Foundry platform as an example. Utility company PG&E used Foundry to optimize its power grid, even allowing it to develop a preventive (predictive) maintenance program. Energy giant BP‘s automotive oil brand Castrol tapped Foundry to better buffer itself from supply chain shocks. A different Palantir Technologies service is being utilized by the U.S. military to improve soldiers’ situational awareness and optimize the combat readiness of equipment. Still another Palantir platform is helping prevent money laundering. The sky’s the limit as to what Palantir’s tech can do.
And Palantir is very, very good at what it does. Dresner Advisory Services ranked the company as the No. 1 AI, data science, and machine learning vendor for 2023.
For investors, though, the crux of the bullish argument isn’t just a superior, highly marketable product. It’s the nature of the business model itself. See, Palantir doesn’t sell systems. It sells perpetual access to artificial intelligence solutions, translating into predictable recurring revenue. The company just needs to focus on adding paying customers.
And it’s doing just that. Last year’s top line is on pace to swell to the tune of 17%, with analysts calling for revenue growth acceleration to nearly 20% this year. Better still, given the AI industry’s long-term growth prospects, analysts believe those numbers reflect the company’s probable growth pace for at least the next several years.
Super Micro Computer
Last but not least, add Super Micro Computer (NASDAQ: SMCI) to your list of millionaire-maker technology stocks.
As far as tech companies go, Super Micro Computer isn’t exactly an innovator or developer. Rather, it uses high-performance technology made by companies like Advanced Micro Devices and Nvidia to offer complete suites of server and data center equipment that’s increasingly needed by all kinds of companies. Most of this demand is being driven by the growing interest in AI solutions. Super Micro Computer simply handles an important but less-featured aspect of the AI industry.
The barrier to entry into the business isn’t especially high. Nevertheless, Super Micro Computer remains one of the go-to names — if not the top name — in the data center establishment arena. The fact that it’s founder-led may have a great deal to do with that. CEO Charles Liang is a terrific leader, with bachelor’s and master’s degrees in electrical engineering, so he also understands exactly what’s happening in digital computing.
The company is still relatively small, too, with a market cap right around $20 billion. That leaves it nimble enough to move quickly — perhaps more quickly than its customers could move on their own were they interested in assembling their own tech racks.
Whatever the reason, the company’s growth numbers speak for themselves. Super Micro Computer’s top line is projected to swell by nearly 50% this fiscal year as the world rushes to establish and then utilize AI capabilities. That growth is a tough act to follow. Still, analysts expect Super Micro Computer’s revenue to more than double over the course of the coming five years. Profits should grow accordingly.
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James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ASML, Advanced Micro Devices, BP, Moody’s, Nvidia, and Palantir Technologies. The Motley Fool recommends Super Micro Computer. The Motley Fool has a disclosure policy.
3 Millionaire-Maker Technology Stocks was originally published by The Motley Fool
Source: finance.yahoo.com