You've probably heard the expression "Beauty is in the eye of the beholder." I think the same sentiment can be applied to wealth. One person's threshold for being rich is likely to differ from another person's level.
There's also another old adage you've likely heard: "Don't count your chickens before they hatch." This is a good one for investors to heed. Just because a stock appears to have a great chance of generating impressive returns doesn't mean that it will.
Why do I bring up those two old sayings? I believe that investing $5,000 in three specific stocks could make you rich. But your version of rich might be different from mine -- and there's no guarantee that these stocks will be big winners. With that in mind, here are the stocks I'm so bullish about.
1. Alphabet
I understand why some might be skeptical that Alphabet (GOOG 1.25%) (GOOGL 1.20%) can still make anyone rich. After all, the company's Google Cloud is losing share to Microsoft's Azure platform. There are questions about whether or not artificial intelligence presents an existential threat to Google Search.
My take, though, is that Google Cloud's slump is overblown. Alphabet's cloud unit actually grew revenue by 22.5% year over year in the third quarter. More importantly, the company has what could be a game-changer on the way with its Gemini AI models. Research company SemiAnalysis estimates that Gemini is five times more powerful than the most advanced version of OpenAI's GPT-4. With Alphabet preparing to incorporate Gemini into its cloud platform next year, I expect that Google Cloud will soon get its groove back.
What about the possibility that AI will make Google Search obsolete? I suspect that AI will instead add to Alphabet's search revenue over time. CEO Sundar Pichai hinted recently that offering subscription models of Google Search integrated with generative AI could be on the table.
I predict that Alphabet will be among the biggest winners from AI over the next decade and beyond. Google Cloud should continue to grow robustly. There's a huge opportunity in the robotaxi market for Alphabet's Waymo unit. Don't overlook the possibility that the company could also achieve a breakthrough in quantum computing.
2. Amazon
Amazon (AMZN 2.94%) is another "Magnificent Seven" stock that some might think has diminishing returns ahead. I disagree. Amazon's best days could be on the way.
AI should serve as a major tailwind for Amazon. Like Alphabet, Amazon is developing a new large language model that should be competitive with GPT-4. I think that CEO Andy Jassy was exactly right when he stated in the company's Q3 call, "Customers want to bring the models to their data, not the other way around." He added -- correctly -- that a lot of that customer data resides in the Amazon Web Services (AWS) cloud platform.
Jassy believes that the current paradigm for the cloud market will change dramatically over the next decade or so. Today, over 90% of global IT spending is on-premises with the remainder in the cloud. Jassy thinks those numbers will flip. If he's right (and I think he is), AWS should be a huge beneficiary.
Don't ignore Amazon's e-commerce opportunities, though. The company recently announced plans to begin selling cars online. There's still a lot of room to run with e-commerce making up only 15.6% of total U.S. retail sales in Q3.
3. UiPath
It isn't just AI giants that offer an opportunity to make you rich. I think that UiPath (PATH -0.94%), an up-and-comer with a market cap of under $10.5 billion, also stands out as a great stock to buy.
UiPath is a pioneer in robotic process automation (RPA). Its technology helps customers use AI to automate their business processes. The company has nearly 11,000 customers, including well-known ones such as Deloitte, DexCom, and Uber.
Cathie Wood's Ark Invest believes that UiPath could be part of "AI's sleeper wave" of smaller companies that haven't attracted as much attention from Wall Street. While there are others in the RPA market, Ark Invest views UiPath's low-code and no-code interfaces as superior to the competition.
Others are taking note of UiPath, too. Everest Group named the company as the only Star Performer in its recent Intelligent Document Processing Products report. Gartner ranked UiPath as a leader for the fifth consecutive year in the RPA category.
Granted, UiPath is less of a known quantity than Alphabet and Amazon. However, I think this rising AI star could be a massive winner down the road.