A boom in artificial intelligence (AI) kicked off last year and became a leading driver in the Nasdaq Composite's rise of 43% in 2023. Wall Street rallied around the tech stocks most likely to profit from the industry in the coming years.
Despite the AI market's meteoric rise, it seems nowhere near its ceiling. According to Grand View Research, the sector hit close to $200 billion in 2023 and is expected to develop at a compound annual growth rate of 37% until at least 2030. For reference, that trajectory would see the market soar to almost $2 trillion by the end of the decade.
The AI market has made a lot of millionaires over the last year but isn't done yet. There's plenty of room left to run as AI boosts countless industries, from consumer tech to cloud computing, autonomous vehicles, e-commerce, and much more.
Here are two artificial intelligence stocks that could make you a millionaire.
1. Advanced Micro Devices
Chip stocks have taken center stage amid soaring interest in AI. Increased demand for AI services has led to a spike in graphics processing unit (GPU) sales, the chips necessary for training and running AI models.
As a leader in GPUs, Nvidia has seen the most success in the segment so far, enjoying soaring earnings and a stock that has climbed 296% in the last 12 months thanks to increased chip sales. However, Nvidia's competitors could be better investment options, with more room to run over the long term.
An excellent option is Advanced Micro Devices (AMD 2.37%). The company is responsible for the second-largest market share in GPUs and has a stellar outlook in AI.
Last December, the company unveiled its MI300X AI GPU. This new chip is designed to compete directly with Nvidia's offerings and has already caught the attention of some of tech's most prominent players, signing on Microsoft and Meta Platforms as clients.
Additionally, AMD wants to lead its own space within AI by doubling down on AI-powered PCs. According to research firm IDC, PC shipments are projected to see a major boost this year, with AI integration serving as a key catalyst.
And a Canalys report predicts that 60% of all PCs shipped in 2027 will be AI-enabled.
Data by YCharts
Moreover, this chart shows AMD's stock has significant potential in the coming years. The company's earnings could hit just over $7 per share over the next two fiscal years. Multiplying that figure by AMD's forward price-to-earnings ratio (P/E) of 53 yields a stock price of $383.
Considering AMD's current position, these projections would see its stock price rise 96% by fiscal 2026. Alongside growing prospects in AI, AMD is a stock that could make you a millionaire with the right investment.
2. Intel
Intel (INTC -9.20%) hasn't had it easy in recent years. The company was responsible for more than 80% of the central processing unit (CPU) market for at least a decade and was the primary chip supplier for Apple's MacBook lineup for years. However, Intel's dominance made it complacent, leaving the company vulnerable to more innovative competitors.
Chip rival AMD started gradually eating away at Intel's CPU market share in 2017, with Intel's share now down to 69%. Then, in 2020, Apple cut ties with Intel in favor of more powerful in-house hardware designs. As a result, Intel's stock is down 31% over the last three years.
However, the fall from grace has seemingly lit a fire under Intel again, and it is making moves to come back strong in the coming years. Last June, Intel announced a "fundamental shift" to its business model, adopting an internal foundry model that it believes will help it save $10 billion by 2025.
The shift will see Intel transform from a primarily integrated device manufacturer to a business similar to Taiwan Semiconductor Manufacturing, becoming a major provider of foundry capacity in North America and Europe. Intel says a foundry-style relationship with its manufacturing group could increase efficiency and profitability, enabling it to hit a non-GAAP (adjusted) gross margin of 60% and an operating margin of 40%.
In addition to a shift in business models, Intel is heavily investing in AI. The company debuted a range of AI chips last December, including Gaudi3, a graphics processing unit (GPU) designed to challenge similar offerings from Nvidia. Intel also showed off new Core Ultra processors and Xeon server chips, which include neural processing units for running AI programs more efficiently.
Data by YCharts
The table above shows Intel's earnings are expected to reach just under $3 per share by fiscal 2026. In a similar calculation to AMD, when multiplying that figure by Intel's forward P/E of 32, you get a share price of $96, projecting stock growth of 123% over the next two fiscal years.
It will take time, but Intel has massive potential in the coming years, making it a screaming buy right now and one that could make you a millionaire.
