The technology sector has gained a reputation for offering investors significant gains over the long term. The sector is constantly evolving, thriving from a system where consumers and businesses must upgrade various devices every few years. As a result, it's an excellent place to find solid growth stocks.
The chart below shows how Apple (AAPL 2.59%), Microsoft (MSFT -1.23%), and Alphabet (GOOG -3.49%) (GOOGL -3.58%) have all more than doubled their stock prices in the last five years. While past growth isn't always indicative of what's to come, these companies are leaders in their respective areas of technology, and have expanding businesses in lucrative markets, such as artificial intelligence (AI).
Data by YCharts.
The growth potential of these companies means you don't need tens of thousands of dollars to see a considerable return on your investment. So, if you got an extra $3,000 after meeting expenses, here are three stocks that could double your money by 2030.
1. Apple
As the world's most valuable company, with a market cap of $2.8 trillion, Apple has a long history of consistent growth. Investment mogul Warren Buffett has become one of the company's biggest proponents. His holding company, Berkshire Hathaway, has entrusted 46% of its portfolio to it. Since Berkshire first invested in Apple seven years ago, its share price has soared 560%.
The company has climbed to the top of tech by achieving leading market shares in most of its product categories. It has garnered immense brand loyalty from consumers with its interconnected ecosystem of products that discourages users from buying competing devices if Apple is an option.
Exclusive apps like Messages and FaceTime have hooked customers and made lifelong users out of millions of people. The company's success has led annual revenue to rise 48% over the last five years and operating income to climb 68%.
Apple has faced macroeconomic headwinds this year, causing revenue declines in multiple product segments. But its increasing use of AI across its lineup, the upcoming venture into virtual/augmented reality, and a booming digital services business will likely take it far. Despite recent hurdles, I wouldn't bet against Apple at least doubling your money over the next seven years. In fact, it's worth dedicating about 40% of the $3,000 to the company. An investment of about $1,225 would buy seven shares at its current price.
2. Microsoft
As the home of potent products and platforms such as Windows, Office, Xbox, Azure, and LinkedIn, Microsoft is easily one of the most reliable investments available. Millions of consumers and businesses worldwide depend on the company for productivity and entertainment. And in 2023, it has emerged as one of the biggest names in AI.
Management invested $1 billion in ChatGPT developer OpenAI in 2019 and has since increased that figure by another $10 billion, putting its ownership stake at 49%. The partnership has allowed Microsoft to obtain exclusive licenses on several of the start-up's AI models, including the one responsible for ChatGPT.
OpenAI's technology and Microsoft's popular productivity software could prove to be a lucrative combination over the long term, and the company has already brought AI upgrades to several of its services, including its Azure cloud and the Office programs Word and Excel. It plans to launch a range of AI tools on its subscription-based 365 Office suite.
The company is well-equipped to become the go-to for anyone interested in using AI to boost efficiency, whether in business, in school, or at home.
Microsoft's shares have soared 884% in the last decade. With the power of AI, there's no telling how far that figure could rise over the next ten years, and it has an excellent chance of doubling your investment by 2030. With similar potential to Apple, I'd equal an investment in Microsoft and buy four shares (about $1,280).
3. Alphabet
Like Microsoft, Alphabet is home to some of the world's most recognizable products and platforms, with immense growth from Google, Android, and YouTube, to name a few. As a result, its annual revenue has risen 107% since 2019, with operating income up 130%.
The biggest reason to invest in Alphabet is its dominance in digital advertising, with billions of dollars in earnings each year through ads on YouTube and Search. Meanwhile, millions of businesses rely on Alphabet to provide income-generating ads on their websites.
The company has struggled over the last year as rising interest rates have curbed spending on ads, but easing inflation has put Alphabet on a recovery path. In the second quarter, revenue rose 7% year over year, beating analysts' estimates by close to $2 billion.
In recent years, Alphabet has seen solid growth in its Google Cloud, which increased revenue by 28% in the second quarter. The company is steadily expanding its library of AI tools on the platform, launching its own version of ChatGPT earlier this year. Google Cloud might not grow to the heights of platforms like Amazon Web Services, but it has a solid role in the industry with its third-largest market share.
Alphabet's command of the digital advertising market, alongside expansions into other high-growth areas of tech, makes it a solid way to see significant gains by 2030. The remaining $495 of your $3,000 investment would yield 3.7 shares in Alphabet. However, an extra $30 would bump you up to four full shares.
