Investing $500 in Two High-Growth Stocks with Potential to Double Your Wealth
💡 Fresh Take on 2024's Sizzling Stock Market Opportunities 🔥
The stock market's bull run continued in 2024, offering enticing investment opportunities at the year's outset. Companies at the forefront of AI adoption still boast attractive returns for investors, yet it's crucial to temper expectations. While some high-flying AI stocks have skyrocketed, even "The Oracle of Omaha" – Warren Buffett – didn't rocket his wealth annually in his early investing days.
To generate lasting wealth in the stock market, savvy investors sift through a company's growth potential while keeping its valuation in mind. Remember, the peerless firms might struggle if their value exceeds their earnings. With that in mind, here are two growth stocks to consider – with price tags below $500. These picks may not yield a doubling in a year's time, but they boast solid growth prospects, and at reasonable multiples, they could double your money within five years.
1. AMD: Meet the Next-Gen AI Chip Powerhouse 💡
Leading cloud providers have spat out billions to augment their data center infrastructures for AI model training. Although Nvidia holds the pole position in the statistics-processing-unit (GPU) market, unquenchable demands for computational power continue to surpass one company's capacity.
Step up, AMD! With Nvidia's share price soaring after intelligent growth, turning your focus to AMD could be the smart move. Q3's data center sales skyrocketed a whopping 122%, while total revenues grew 18%, signaling a record-breaking revenue year. AMD is set to witness additional growth in 2025, placing it in a strong position to fulfill the relentless demand for AI chips.
Corporate giants like Microsoft rely on AMD's chips for Chaperone and Azure services, while Netflix and Uber Technologies rely on AMD's CPUs to keep their operations humming. As AMD's non-AI segments recover, guess what? The stock value will soar. With analysts predicting an annualized earnings growth rate of 44%, AMD's current P/E multiple of 24 positions you perfectly for profit if the firm achieves a mere 15% earnings growth per year through 2030.
2. Google: Don't Count the Tech Giant Out 💪
Google's digital advertising dominance remains robust, reporting impressive earnings results in 2024, sending the stock soaring 36% ahead. Integrating AI puts a magnifying glass on new revenue streams and immense opportunities to revamp its in-demand services.
Recent advancements, such as AI Overviews and Circle to Search, expand users' search horizons, further increasing ad placement options. Google reported a 10% year-on-year revenue surge to $65 billion, and the future remains bright as Google continues to refine its AI-powered products.
Google Cloud services offer business AI application development tools, enabling smoother AI integration and opening new doors for user monetization opportunities. As the third-ranked cloud provider, Google Cloud is closing the gap on its rivals, with annual revenue soaring 35%. Driven by these robust earnings, Google Cloud's profit margins are on the upswing.
Suppose we're in the days of double ears. In that case, Google's gross profits per share increased from $1.55 in Q3 2023 to $2.12 in Q4 2024, demonstrating a screamworthy 37% uptrend. Yet the stock remains modestly priced, with a P/E multiple of 22, placing you in the catbird seat to double your money within five years.
In the context of investing in the stock market, it's essential to consider companies with solid growth potential, even if they may not double in value within a year. With AMD's strong performance in the data center sales sector and a predicted annualized earnings growth rate of 44%, investing in AMD could potentially double your money within five years.
Given Google's robust digital advertising earnings and its focus on integrating AI, the tech giant's stock remains modestly priced with a P/E multiple of 22, offering a potential for doubling your money within five years as well.
