Technology stocks have been the success story of Wall Street for years now. It's not that other sectors can't make you money, but let's face it -- the modern world is driven by technology. Since the internet arrived, innovation and growth have gone hand in hand, and that's likely to continue with artificial intelligence (AI) hitting its stride.
For investors looking to grow their stock portfolio significantly before retirement, it's hard to leave technology out of the spotlight.
But that doesn't mean you should take huge swings, investing in risky stocks with a low chance of success. Instead, consider these proven winners that still have significant growth ahead.
If you have savings of $300,000 after meeting your immediate and necessary expenses, then here are three stocks you can invest $100,000 each, and potentially grow these savings to $1 million or more over the next decade. That's an average annual return of 12.8% over 10 years -- a perfectly achievable benchmark if you pick the right stocks.
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1. There is plenty of growth left in the leading AI stock
If artificial intelligence is going to create trillions of dollars in economic value over the coming years as experts anticipate, Nvidia (NVDA 0.52%) will almost certainly continue to perform. The company has cornered the market for data center GPU chips, with an estimated 92% market share. Nvidia has built a powerful ecosystem consisting of cutting-edge chip hardware, combined with its CUDA programming platform, which essentially optimizes Nvidia GPU chips for non-graphical workloads, like AI.
Thus far, competitors haven't taken Nvidia down, and the company could continue to grow alongside the world's data center footprint. Research from McKinsey & Company estimates that the required capital outlay for data centers could hit $7 trillion by 2030. Furthermore, Nvidia has additional long-term opportunities to expand beyond data centers, to areas like robotics, where computing power would be needed at a localized level.
Unless Nvidia loses its edge in AI, analysts see the company growing earnings by an average of 29% annually over the long term. The stock's current price-to-earnings (P/E) ratio of 46 is more than fair for such high growth. So, if AI tailwinds continue as expected, the stock could realistically double or triple over the next 10 years as long as Nvidia remains atop the AI mountain.
2. This leading semiconductor stock is worth owning despite some risks
You may not know it, but Nvidia doesn't actually manufacture its own chips. That's normal; many semiconductor companies don't. Many, including Nvidia, go to Taiwan Semiconductor Manufacturing (TSM 0.58%), the world's leading chip foundry. In plain terms, a foundry is the company that actually fabricates, or manufactures, semiconductor chips from the raw material. At the end of 2024, Taiwan Semiconductor held an estimated 67% revenue share of the global foundry market.
Taiwan Semiconductor has a wide competitive moat. Chips are a massive business, and companies like Nvidia are going to go to Taiwan Semiconductor for production because it has the best equipment and the highest production capacity, and, therefore, offers the most value -- especially for cutting-edge chips that require advanced manufacturing techniques and equipment. It makes Taiwan Semiconductor a clear winner in the AI growth landscape.
The catch with Taiwan Semiconductor is it comes with risks associated with long-standing geopolitical tensions between China and Taiwan. China claims Taiwan as its territory, and any invasion or military conflict could disrupt Taiwan Semiconductor's business for obvious reasons. That said, analysts estimate the company will grow earnings by over 21% annually over the long term, making the stock a bargain at just 26 times earnings, and a candidate to double or triple over the next decade if geopolitics don't boil over.
3. The leading streaming company isn't done growing
Consumers are the engine that drives the U.S. economy, so every investor should own some leading consumer-facing companies. Among them is streaming giant Netflix (NFLX 2.45%), which has amassed a global presence with over 301 million paid subscribers at the end of last year. Netflix has become increasingly profitable as its membership fees grow faster than what it spends to produce content.
As big as Netflix has become, it has multiple growth levers to pull over the next decade. That includes advertising revenue from ad-supported memberships, and expansion efforts into mobile gaming and live sporting events. There are over 8 billion people in a growing world, so there is still quite a bit of organic subscriber growth ahead, too. Netflix stopped reporting subscribers this year, but its paid member base grew 15.9% year over year in the fourth quarter of 2024, so the business isn't exactly running out of steam.
Netflix, a proven winner, trades at a hefty P/E ratio of 58 today. Fortunately, analysts anticipate Netflix growing earnings by an average of 22% annually over the next three to five years, so it's a fair valuation for the growth you're expecting, and a fair price still leaves room for strong investment returns. At this growth rate, I could see Netflix doubling or tripling over the next decade, especially if the company establishes itself in a growing gaming market already worth $522 billion globally.
