It has been 15 years since the Great Recession ended. The markets have been fairly bullish since then, and investing in tech stocks over the years, especially those focused on artificial intelligence (AI), has proven to be an excellent move.
Back then, it would have been difficult to predict the future of AI, but if you invested in some promising tech companies, you would be up big today. Nvidia (NVDA +1.67%), Amazon (AMZN +0.26%), and Super Micro Computer (SMCI +0.56%) have all been phenomenal investments during that time.
Here's how much a $25,000 investment back at the end of the Great Recession in these three high-powered tech stocks would be worth right now.
NASDAQ: NVDA
Key Data Points
Nvidia: $10.7 million
Nvidia's gains in just the past few years alone have been amazing. The stock has been red-hot, as its name has become synonymous with AI and the opportunities related to developing chatbots and next-gen technologies. Companies are falling over themselves to partner with Nvidia in the hopes of cashing in on not just opportunities, but the hype that comes along with saying that you're doing business with Nvidia.
Investing just $25,000 in Nvidia at the end of the Great Recession would have made you more than a millionaire, as your investment would be worth nearly $11 million. And at this rate, it may eclipse that mark before the end of the year.
Even though the stock isn't cheap, trading at 70 times its trailing earnings, investors remain bullish. Shares of Nvidia are up over 140% this year. The business has been tripling its revenue, and investors and analysts still see much more future growth on the horizon. Predicting how much higher this already scorching-hot stock can go is no easy task.
It's hard to go wrong with Nvidia, with its leadership in the AI chip market and the need for its data center products, but investors should start to consider tempering their expectations, given the stock's mammoth $3 trillion valuation.
NASDAQ: AMZN
Key Data Points
Amazon: $1.1 million
Amazon might be the original AI stock, back when investing in AI stocks wasn't really even a thing. The tech company has been using AI to revolutionize its logistics business for years, including using robots to help move packages and create efficiencies in its warehouses. More recently, it has also gotten into the chatbot wars with its $4 billion investment into Anthropic, the AI company behind Claude 3, a rival to ChatGPT.
How it all plays out is still anyone's guess, but it's fair to say AI will remain a big part of Amazon's world. One example of the potential is its partnership with UVeye, where the two companies are using AI to help automate vehicle inspections. Amazon is also planning to monetize an AI-powered version of its Alexa assistant. There are many growth opportunities still out for this near-$2 trillion business to become more valuable in the future.
Investing $25,000 into Amazon 15 years ago would have made you a millionaire today. Still, at an earnings multiple of more than 50 and without its sales skyrocketing (Amazon's revenue rose by 13% year-over-year in the first quarter),this is another tech stock investors should tread carefully with. Given its inflated valuation, it may be worth taking a bit of a wait-and-see approach with Amazon stock.
NASDAQ: SMCI
Key Data Points
Super Micro: $2.5 million
Super Micro, also known as just Supermicro, had not outperformed Amazon over the past 15 years until recently. It wasn't until the recent hype in AI and chatbots that ignited a flame under this tech stock. But now, this fast-growing business is among the hottest AI stocks to own.
The company provides many solutions for AI, including servers, which has been a massive growth opportunity for the business. During the first three months of the year, Supermicro has reported $3.9 billion in net sales -- three times the $1.3 billion it reported a year earlier. Its profits also look fantastic, jumping from $85.8 million in the prior-year period to $402.5 million this past quarter.
Supermicro is technically the cheapest stock on this list, with a price-to-earnings multiple of just 43. And its market cap of $45 billion is by far the lightest. Based on those metrics, this is the stock that may have the most upside, given its strong growth prospects to help provide companies with AI solutions and servers. So if you're going to buy an AI stock, Supermicro may be one of the better options to add to your portfolio right now.
