Many investors gravitate towards the tech sector because it houses some of the market’s fastest-growing stocks. A lot of those stocks fizzle out, but the stronger ones can generate some dizzying gains as they scale their booming businesses.
Most of those millionaire-making stocks share similar characteristics. They’re early movers in a market which can grow for decades, they’re willing to roll out new products and services instead of following the herd, and they’re willing to sacrifice their near-term margins to plant the seeds for future growth. They’re also often led by visionary leaders who don’t plow too much cash into wasteful acquisitions and buybacks.
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Not many companies checked all those boxes, but we can look back at the market’s previous millionaire-makers to learn how they bucked the market’s expectations and generated the biggest returns for their most patient investors. Here are three millionaire-making stories everyone should know: Apple’s (AAPL -0.39%) evolution from an underdog computer maker into a tech juggernaut, Nvidia’s (NVDA -3.12%) transformation from a gaming chipmaker to an AI leader, and AMD’s (AMD -0.16%) unlikely comeback against Intel (INTC -3.43%) in the x86 CPU market.
Investing in Apple in 1997
If you had invested $10,000 in Apple on Sept. 16, 1997, the day its co-founder Steve Jobs formally returned as its interim CEO, you would have $11.37 million today. That investment would also be paying out roughly $51,165 in dividends annually.
From fiscal 1997 to fiscal 2024 (which ended last September), Apple’s revenue grew at a compound annual growth rate (CAGR) of 16%. That robust growth was initially driven by the iMac, iPod, iPhone, and iPad under Steve Jobs, who transformed Apple from a dusty old computer maker into an innovative creator of sleek electronic devices. Apple didn’t invent the MP3 player, smartphone, or tablet computer, but it disrupted each those markets with user-friendly devices tethered to sticky software ecosystems.
After Jobs passed away in 2011, Tim Cook maintained that momentum by launching new products like the Apple Watch and AirPods. Apple also expanded its subscription and services ecosystem to lock in more customers. That walled garden could fuel its growth for a long time -- even if it doesn’t shake up the market with fresh new devices.
Investing in Nvidia in 1999
On Oct. 11, 1999, the fledgling chipmaker Nvidia launched its first consumer-oriented GPU, the GeForce 256. If you had invested $10,000 in Nvidia on that fateful day, your investment would be worth a whopping $29.92 million today. From fiscal 1999 to fiscal 2024 (which ended in Jan. 2024), its revenue rose at a CAGR of 26%.
Under Jensen Huang, who has led Nvidia since its founding in 1993, the chipmaker initially focused on producing gaming GPUs for PCs. After it became the world’s leading gaming GPU maker, it expanded into the data center market with even higher-end GPUs for processing complex machine learning and AI tasks. Unlike CPUs, which only process a single piece of data at a time, GPUs can process a wider range of integers and floating point numbers simultaneously through vector processing.
Nvidia launched its first data center GPU back in 2007, but those chips only started to gain a lot more attention over the past decade as the AI market expanded. Today, all of the world’s top AI companies use its GPUs to power their AI applications. It will likely keep selling the best picks and shovels for the AI gold rush for the foreseeable future.
Investing in AMD in 2014
When Dr. Lisa Su took over as AMD’s CEO on Oct. 8, 2014, the chipmaker was struggling to keep pace with Intel in the CPU market and Nvidia in the GPU market. But if you had invested $10,000 in AMD on Su’s first day, your investment would be worth $375,000 today. A $30,000 investment would be worth $1.13 million.
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Under Su, AMD expanded its embedded chip business by rolling out more custom accelerated processing units (APUs) for gaming consoles, redesigned its CPUs to compete more effectively against Intel, launched new data center CPUs and GPUs, and deepened its manufacturing partnership with TSMC (TSM -1.22%). It also acquired the programmable chipmaker Xilinx to counter Intel’s purchase of Altera.
All of these moves -- along with Intel’s disastrous delays, shortages, and management changes -- turned AMD into an exciting growth stock again. Its revenue grew at a CAGR of 17% from 2014 to 2023, even as the pandemic, geopolitical conflicts, supply chain disruptions, inflation, and rising rates rattled the semiconductor sector. Over the next few years, AMD’s growth will likely be driven by the PC market’s recovery and its rising sales of AI data center GPUs, which still cost much less than Nvidia’s comparable chips.
