Two top tech stocks that can make you a millionaire

A common hope among growth investors is to find a stock that will make them a millionaire with a small investment.Technology stocks, e.g. Amazon and Microsoft Such a feat has been achieved for long-term investors.

But because these companies are mature and growing at a slower pace, their goal is to find the next Microsoft. The following two small companies have growth prospects that could translate into millionaire potential.

1. Digital Ocean

digital ocean (NYSE: DOCN) It may not look like a millionaire at first glance, but it is one of many cloud infrastructure providers, and with competitors such as Amazon and Microsoft, you may be wondering how it can compete with a cloud computing infrastructure provider? Market value Less than $4 billion.

DigitalOcean primarily serves small and medium-sized businesses (SMBs), of which there are 33 million in the United States alone, according to the U.S. Small Business Administration. To do this, the company developed a business model that larger businesses couldn’t compete without. Destroy your own business.

First, it has transparent pricing, which means businesses only need to purchase the services they need; second, it offers the DigitalOcean Community, a combination of educational materials and additional user access that helps small businesses solve IT-related issues , without the need for expensive personnel.

Additionally, the emergence of artificial intelligence (AI) is likely to spur demand for its services. Nvidia The price of each H100 AI chip is about US$30,000, which is too expensive for most small and medium-sized enterprises. But DigitalOcean can provide access to the technology through its Paperspace platform, making it more likely that small and medium-sized businesses will switch to the company.

This value proposition may help income It will reach US$693 million in 2023, an increase of 20% from 2022. DigitalOcean turned a profit, posting a net profit of $19 million, compared with a loss of $28 million the previous year, thanks to efforts to limit growth in operating expenses.

The stock’s behavior suggests there is some uncertainty. The stock is up just 15% in the last year, but still sells at a 70% discount to its 2021 highs. Additionally, the company has recently undergone top-level changes, with the appointment of Paddy Srinivasan as its new CEO in February.

Srinivasan has extensive leadership experience in the industry, most recently at software-as-a-service company GoTo and several other technology companies, and his leadership could reinvigorate DigitalOcean.

Its forward price-to-earnings (P/E) ratio is 24, making it cheap by any measure. As more businesses turn to the cloud and artificial intelligence, DigitalOcean appears to be well-positioned to serve a large base of small and mid-sized businesses, which could ultimately see its stock price rise significantly.

2. Nu Holdings

Nu Holdings (NYSE:NU) Runs one of the largest digital banks in the world, but you might be overlooking it.And Warren Buffett’s Berkshire Hathaway As an early investor, it’s easy to overlook Nu Holdings, which only operates in Brazil, Mexico, and Colombia.

Those who pay attention to the company may also miss its value proposition. Unlike the United States, Latin America is a region with few traditional banks. This leaves many people unable to obtain bank accounts or credit cards.

The company’s Nubank changed that, giving millions of Brazilians their first credit card. Since most Latin Americans own smartphones, the bank can interact with customers without maintaining physical branches.

This approach has been so successful in Brazil that 88 million customers, or 53% of the country’s adult population, have at least one Nu account. Additionally, as the bank saturated the Brazilian market, it has expanded into Mexico and Colombia, where accounts in those two countries serve approximately 6 million customers. Early signs of success in these countries suggest Nu’s rapid expansion could continue for several years.

These increases lead to revenue reaching $8 billion in 2023, up 68% from a year ago. Nu Holdings recently turned a profit for the year, hitting a net profit of $1 billion after a loss of $365 million in 2022.

Investors have begun to take notice of the stock, which is up more than 180% over the last year.

Nu Holdings is also priced attractively for new investors. At a P/E of 58 and a forward P/E of 31, the stock is cheap considering its rapid growth. This price-to-earnings ratio could be a good time to buy before more investors find out. This financial technology stock.

Should you invest $1,000 in DigitalOcean right now?

Before buying DigitalOcean stock, consider the following factors:

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John Mackey is the former CEO of Amazon subsidiary Whole Foods Market and a board member of The Motley Fool. Will Healy Holds positions in Berkshire Hathaway, DigitalOcean and Nu. The Motley Fool owns and recommends Amazon, Berkshire Hathaway, DigitalOcean, Microsoft and Nvidia. The Motley Fool recommends Nu and recommends the following options: Buy January 2026 Microsoft and Call Options Short January 2026 Microsoft call at $405. Motley Fool has a disclosure policy.

Two top tech stocks that can make you a millionaire Originally published by The Motley Fool

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