Alert to Future Millionaires: Chip Stocks Will Make You Rich in 10 Years

Artificial intelligence (AI) breathed new life into the semiconductor industry. Echoing the early days of the PC wars, when chip stocks fought for dominance by outdoing a rival’s recent advances, AI has now spawned new challengers to the old guard. They seem to offer new features and performance almost daily.

Nvidia (NASDAQ:NVDA) remains the AI ​​chip stock of choice. But you don’t have to put all your eggs in one basket – or all your chips on one waffle. There is a rapidly expanding universe of semiconductor stocks to buy that could make investors millionaires within the next 10 years.

Below are three of the best chip stocks available today to make you rich tomorrow.

Arm stocks (ARM)

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Of course, Arm stocks (NASDAQ:POOR) is not a chip manufacturer per se. It designs chip architectures that come with a set of instructions that semiconductor companies license. However, the chip designer has just announced that he will be producing his first AI chip starting next year. It will not make the chip itself, but will turn to him Taiwan semiconductor manufacturing (NYSE:TSM) and other foundries to ensure they have the capacity to produce the chips. TSM currently produces almost all of Arm’s chips.

Arm Holdings is also expanding into the data center market as its chips’ low power consumption makes them perfect for the segment’s high energy consumption. The AI ​​chip market is currently valued at $30 billion, but is expected to exceed $100 billion within five years.

Energy conservation is also important in the operation of PCs, and Arm’s architecture will be crucial for the future AI PCs that come to market. Analysts at Morgan Stanley say ARM-based central processing units (CPUs) will be the standard for future computers. AI PCs are predicted to reach a 95% penetration rate by 2027, compared to just 8% currently. And Arm CPUs will “initiate changes that impact the global semiconductor industry.”

Broadcom (AVGO)

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Data centers will also be the driving force Broadcom (NASDAQ:AVGO), a chipmaker best known for its cell phone chips. However, the company recently shifted its focus to data center infrastructure and found its custom accelerators were in high demand. AI was, of course, the main driver of adoption, and Broadcom reported that its AI revenue rose 300% to $2.3 billion in the first quarter. AI is now forecast to account for $10 billion this year, or 35% of the total.

Supporting AI demand will double the data center market, measured in gigawatts (GW), by 2030, according to industry analysts in Newark. By 2030, data centers will absorb 35 GW, exceeding the total demand of 17 GW in 2022.

What will help Broadcom stock investors become millionaires by 2030 isn’t just the capital appreciation they’ll get from the stock. Their returns will be boosted by the dividend, which the chipmaker has increased for 14 years in a row. The distribution has increased at a compound annual growth rate of 36% (CAGR) in the last 10 years. The combination of share price growth and dividend payments will make investors fabulously rich and could push AVGO’s value to $1 trillion or more in the coming years.

Microsoft (MSFT)

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Microsoft (NASDAQ:MSFT) was an early adopter of the AI ​​regime and integrated the technology into its products and services. Through its investment in and partnership with OpenAIThe Azure cloud computing infrastructure of the generative AI chatbot Chat GPT is fully equipped with the technology.

Now Microsoft is offering its cloud customers Modern micro devices (NASDAQ:AMD) AI chips as an alternative to Nvidia chips. AMD’s MI300X chips are on sale, which are more powerful than Nvidia’s H100 chips. Although Nvidia has since released even more advanced semiconductors, they are more expensive than the alternative, which can also meet most customers’ AI needs. Microsoft also sells its own AI chips called Maia and is about to launch a new processor called Cobalt 100, which reportedly offers 40% better performance than other processors based on Arm’s design.

Microsoft’s revenue rose 18% in the fourth quarter of last year as artificial intelligence increased adoption of its products. Azure revenue alone increased by 30%. MSFT stock will produce millionaires in the coming years.

At the time of publication, Rich Duprey did not hold, directly or indirectly, any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s publication policies.