Artificial intelligence stocks have already made plenty of millionaires.
After all, Nvidia alone added nearly $2 trillion in market cap since the start of 2023, and there have been trillions of dollars in market value created among the "Magnificent Seven" and beyond.
However, according to industry insiders, artificial intelligence is still in its infancy, and some have likened the current phase to the dial-up stage of the internet. Like the internet in the 1990s, generative AI is going to get better, and its applications will proliferate in ways that are hard to foresee.
To capitalize on that trend, keep reading to see two AI stocks that are worth buying right now.
Image source: Getty Images.
1. Super Micro Computer
One of the biggest winners in the AI boom so far has been Super Micro Computer (SMCI 3.73%), a maker of servers and storage equipment that works especially well for artificial intelligence purposes.
Shares of Supermicro, as the company is often known, jumped more than 800% over the past year as the company has emerged as a clear leader in AI hardware. Revenue rose 103% in its fiscal second quarter, and management said that its growth rate would accelerate in the next two quarters as it called for 101% to 107% revenue growth for the full fiscal year.
Comments from management indicate that the company could be growing even faster if it wasn't facing supply constraints. CEO Charles Liang said that while GPU supply is improving, "Indeed, the demand is still stronger than supply. If we had more supply, we would be able to ship more."
Supermicro also has a close relationship with Nvidia, whose GPUs have become the technological foundation of the AI boom -- Nvidia has greater than a 90% market share in the data center GPU market. The headquarters of both companies are nearby, and its engineers work together to design server systems that fit the needs of its different customer groups.
That gives Supermicro a competitive advantage, as does its prowess in offering more customization options than its competitors, and it's also known for bringing products to market faster.
Supermicro trades at a reasonable price-to-earnings ratio of less than 50 based on this year's estimate, and it has a market cap of $59 billion. If the company remains a leader in AI servers, the stock could turn $250,000 into $1 million over the coming years.
2. Micron
Memory-chip specialist Micron (MU -0.26%) emerged as another big potential winner in AI as memory chips play an important role in running the kind of models that make programs like ChatGPT work.
Unlike stocks like Supermicro and Nvidia, investors are only starting to catch on to Micron's growth opportunity in AI, and the stock is still affordably priced at a price-to-sales ratio of 4.
Micron is just emerging from a downturn in the chip industry as a supply glut driven by a slowdown in PC and tablet sales coming out of the pandemic has weighed on prices. However, artificial intelligence is playing a key role in its comeback. CEO Sanjay Mehrotra told investors in the recent earnings call, "We are in the very early innings of a multiyear growth phase driven by AI as this disruptive technology will transform every aspect of business and society." He added, "Memory and storage technologies are key enablers of AI in both training and inference workloads, and Micron is well positioned to capitalize on these trends in both the data center and the edge."
Micron's products also stand out from the competition. For example, its high-memory HBM3E solution provides more than 20 times the memory bandwidth compared to standard server modules and it consumes 30% less power, an important quality in AI hardware, than competing products.
The company now expects record revenue in fiscal 2025 and a significant improvement in profitability. Based on that momentum and its leadership in memory chips, Micron could also grow by four times over the coming years from its current market cap of $130 billion, turning $250,000 into a million dollars.
