The tech industry has produced significant long-term returns, frequently outpacing the overall market. For instance, the S&P 500 has appreciated by 81% over the last five years, while the State Street Technology Select Sector SPDR ETF saw a 116% increase in the same time frame.
This performance is partly why many billionaire investors favor tech stocks, particularly several major players showing remarkable revenue growth, largely driven by artificial intelligence (AI).
Will AI be the catalyst for creating the world’s first millionaire? Our team recently discussed a little-known firm described as an “essential monopoly,” providing critical tech support for companies like Nvidia and Intel.
Most investors are familiar with Nvidia’s AI chips; these semiconductors essentially serve as the lifeblood for AI innovation. Without them, AI applications might not work at all.
Nvidia’s expertise lies in GPUs, which are versatile and can handle many tasks. Unlike other chips, often designed for specific needs, Nvidia’s offerings cater to a wide range of applications, making them essential for numerous tech enterprises.
Chip manufacturers like Nvidia are in high demand, with major tech firms eager to collaborate. This demand positions Nvidia to become potentially the most profitable public company. The firm’s net income reached $31.9 billion, a remarkable 65% increase from the previous year, right below Apple’s earnings.
Nvidia is looking ahead, planning to introduce new Vera Rubin chips by late 2026. These chips are expected to surpass the existing Blackwell model, likely boosting Nvidia’s revenue even more. Interestingly, despite heavy investments in new chips and research, Nvidia has returned $37 billion to shareholders through share buybacks and dividends in the initial nine months of fiscal 2026.
However, Nvidia isn’t alone in benefiting from the AI trend. Companies like Micron provide crucial components that help scale AI infrastructure. Micron specializes in memory storage that maximizes AI chip performance.
Addressing this key challenge has improved Micron’s profit margins and contributed to sales growth. The company is shifting its focus away from consumer products to prioritize AI infrastructure completely.
Micron’s results for the first quarter of 2026 show why this pivot is wise. Revenue surged 57% year-over-year, and projections indicate both revenue and earnings are set for growth in the near future. It seems 2026 might be a transformative year for Micron, which has seen its stock rise nearly 350% in the past year.
The stock trades at a PEG ratio of only 0.18, which is extraordinarily low. Generally, a PEG ratio of 1 is deemed fairly valued, and anything below is often seen as undervalued. However, it’s important to remember that PEG estimates are based on analysts’ projections. Despite its impressive growth, Micron’s valuation remains much lower than typical tech firms.
Nvidia and Micron have both shown strong performance, unlike Amazon, which has remained stagnant over the past year, only increasing by 36% over five years. While these numbers may not look great, it’s possible tech giants are on the brink of resurgence.
Amazon is well-known for its online marketplace, but its growth drivers include Amazon Web Services and online advertising. Its Trainium chips indicate a new business segment that is on track to exceed $10 billion in annual revenue, showing more than 100% year-over-year growth.
Overall revenue for Q4 2025 climbed 14% compared to the previous year, with a 24% increase in the cloud segment. Net profit also rose by 6% in the same period.
Looking at these figures, it’s puzzling to see Amazon’s stock down 7% this year. Valuation issues don’t seem to apply here as the stock carries a P/E ratio of 34.
There’s a noticeable disconnect between Amazon’s strengthening fundamentals and its stock price trend. Recently, Morgan Stanley raised its price target for Amazon to $300 per share from approximately $210. The firm anticipates that Amazon Web Services will see growth accelerate to 30% year-on-year in the latter half of 2026.
These might be the final months to purchase Amazon shares before they gain traction and draw more general investors.
Before considering Nvidia stock, here’s something to ponder:
According to Motley Fool Stock Advisor, their analysts have pinpointed some top stocks, and remarkably, Nvidia isn’t one of them. These ten picks hold promise for generating considerable returns in the upcoming years.
Reflecting on Netflix, for instance, if you invested $1,000 at the time it was recommended back on December 17, 2004, you would have $420,864! Or consider Nvidia; if you had invested $1,000 upon its recommendation on April 15, 2005, that would now be worth $1,182,210!
It’s noteworthy that the average return for Stock Advisor stands at 903%, which significantly eclipses the S&P 500’s 192% return, signifying a remarkable outperformance in the market.
*Stock Advisor will return on February 25, 2026.
Mark Guberti, the author, holds a position in Apple, while The Motley Fool has invested in and recommends Amazon, Apple, Micron Technology, and Nvidia. You can find their disclosure policy online.
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