Typically, millionaire-maker stocks are defined as those that are capable of generating returns of over 1,000%. While equity markets are trading near all-time highs, there are several stocks that can help you derive game-changing returns in the upcoming decade. One strategy to benefit from outsized gains is to identify a portfolio of profitable companies as part of rapidly expanding addressable markets such as artificial intelligence (AI).
Here are two such millionaire-maker tech stocks you can buy right now.
Broadcom stock
Broadcom (NASDAQ: AVGO) is among the largest companies in the world, valued at US$690 billion by market cap. In the last decade, Broadcom stock has returned 2,000% to shareholders, and if we adjust for dividend reinvestments, cumulative returns are higher at 2,610%.
In addition to capital gains, Broadcom investors will also benefit from a steady stream of dividends. Broadcom pays shareholders an annual dividend of US$2.10 per share, translating to a yield of 1.4%. Comparatively, the company’s free cash flow per share is US$4.24, which indicates the payout ratio is less than 50%.
Broadcom has almost doubled its free cash flow from US$12 billion in fiscal 2019 to US$21.9 billion in the last four quarters. A widening base of cash flow has allowed Broadcom to lower its balance sheet debt and pursue highly accretive acquisitions in this period.
AVGO stock rose by double digits after it reported revenue of US$12.49 billion and adjusted earnings of US$10.96 per share in the fiscal second quarter (Q2) of 2024 (ended in April).
Broadcom is a diversified company that offers solutions across verticals such as semiconductors, software, and cloud computing. It is well positioned to benefit from the AI boom and emphasized that AI-related sales stood at US$3.1 billion in the last quarter.
In fiscal 2024, analysts expect Broadcom to increase sales by a whopping 43.6% to US$51.45 billion, while adjusted earnings growth is forecast at 13%. Priced at 31 times forward earnings, AVGO stock is reasonably valued and trades at a 32% discount to consensus price target estimates.
Advanced Micro Devices stock
The second millionaire-maker stock on my list is Advanced Micro Devices (NASDAQ: AMD), which has trailed the broader markets in 2024. Down 9% in 2024, AMD stock trades 37% below all-time highs and has returned over 3,000% to shareholders in the past decade.
Valued at US$217 billion by market cap, AMD reported revenue of US$5.84 billion and adjusted earnings per share of US$0.69 in Q2 of 2024. Comparatively, analysts forecast sales and earnings at US$5.72 billion and US$0.68 per share, respectively.
AMD is the second largest manufacturer of data centre GPUs, or graphics processing units, and is experiencing strong demand as generative AI platforms continue to gain traction. During its earnings call, AMD chief executive officer Lisa Su stated that revenue in Q2 was driven by higher-than-expected sales of AI chips, while revenue from the MI300 chips surpassed US$1 billion.
The company now expects data center GPU revenue to exceed US$4.5 billion this year, up from its earlier forecast of US$4 billion. AI chip sales are part of AMD’s data center business which reported revenue of US$2.8 billion in Q2, up 115% year over year.
Priced at 39.6 times forward earnings, AMD stock trades at a 40% discount to consensus price target estimates.
