A few tech stocks have made plenty of millionaires. If you invested just $1,000 in Apple (AAPL 0.87%) stock 40 years ago, you'd have a total return of $2.7 million today. Placing the same $1,000 on the Microsoft (MSFT +0.63%) IPO two years later would have yielded a $7.1 million return. Those are life-changing returns.
These millionaire-maker stocks have a few things in common. Apple and Microsoft revolutionized how people use computers and mobile devices. They have changed with the times, often leading the charge into whatever new era comes next. And yes, they have stayed in business for more than four decades.
But Microsoft and Apple probably won't make many new millionaires from this point. They are already two of the most valuable companies on the planet and it's tough to deliver skyrocketing growth from a lofty starting point.
Tomorrow's millionaire-making tech stocks have to be fairly small today. Now, most of the small-cap upstarts on the market today won't follow in Microsoft's or Apple's gigantic footsteps. On the upside, finding one of those future titans more than makes up for dozens of failed revolutions and short-lived gadflies along the way. That's the mindset of successful growth investors.
So I can't promise that the stocks below will be big winners, but I see early signs of long-term success in them. You shouldn't bet your life savings on my ideas, but they deserve your consideration and perhaps a small investment. Apple and Microsoft showed you what a modest $1,000 investment can do over four decades.
Read on to see why I expect SoundHound AI (SOUN +2.03%) to disrupt its chosen market over the next few decades. This is an oft-overlooked leader in artificial intelligence (AI) services, and the growth story is in its early chapters.
NASDAQ: SOUN
Key Data Points
The future is voice-controlled
Voice-controlled software is popping up all over the place. You can already find them in phone-based menu systems, drive-through window orders, and personal assistant devices. Your phone takes dictation and voice commands. And that's just the start of a much larger trend.
The company has plenty of growth catalysts available. SoundHound AI is expanding its target market by acquiring smaller peers with built-in customer lists. If your smart TV responds to voice commands, you may be talking to the Houndify conversational AI system. The company is finding more clients in the automotive and food services industries while making inroads in healthcare, financial services, and e-commerce.
SoundHound AI isn't shy about its long-term opportunity, either. In its quarterly reports, SoundHound AI compares its future potential to four of the "Magnificent Seven" stocks, including Apple and Microsoft. If Microsoft made its billions on desktop computing and Apple disrupted mobile phones, SoundHound addresses voice control needs across both of those platforms -- and many more.
NASDAQ: MSFT
Key Data Points
Innovation for the win
This growth story has a long way to go, of course. SoundHound AI wants to deliver voice controls that delight end users in billions of devices, outperforming humans in terms of understanding what the user is asking for. Today's voice-based systems don't deliver on that vision yet. No, not even Houndify.
But SoundHound AI is improving its AI-based voice interpretation all the time. Research and development is the largest expense line in this company's earnings reports, leaving operating costs and marketing budgets far behind.
NASDAQ: AAPL
Key Data Points
I'll admit that SoundHound AI's ambition looks a bit extreme, but just a modest slice of its long-term targets could still produce a global technology giant. A fairly small SoundHound AI investment today could generate million-dollar returns in the long run. Remember, the real wealth-building magic of investing lies in compound returns over many years.
And I think SoundHound AI can deliver on that promise. The $1.7 billion market cap you see today could reach trillions of dollars over the next 40 years. And even if it doesn't soar that high, I expect market-beating investor returns in the long run.
