History proves the stock market is one of the greatest vehicles for generating long-term wealth, and there's no shortage of spectacular examples.
Apple is currently the world's largest company, with a valuation of $2.4 trillion, and an investment in its initial public offering (IPO) in 1980 has yielded a return of 155,000% to date. Similarly, shares of Microsoft have soared 382,700% since its IPO in 1986.
But where will the next market leaders come from? Companies developing technologies like semiconductors, artificial intelligence (AI), and cybersecurity might be the best candidates. Through that lens, here are five stocks that could be among the world's most valuable by 2050.
Advanced Micro Devices (AMD -2.32%) is one of the world's leading semiconductor companies. Its advanced computer chips power some of the hottest consumer products, from the infotainment systems in Tesla's electric vehicles to gaming consoles like the Microsoft Xbox and Sony PlayStation.
But the data center is the company's most valuable opportunity. AMD is a go-to chipmaker for the top providers of cloud computing services. Moreover, its $49 billion acquisition of Xilinx last year sets it up to lead the high-performance computing industry -- including areas like artificial intelligence.
Xilinx's adaptive technology allows chips to be reconfigured after the manufacturing process, significantly shortening the upgrade cycle, which is exactly what the AI sector needs to speed up its progress.
The semiconductor industry was valued at $573 billion in 2022 with a 12.2% annual growth rate, according to Fortune Business Insights. If it continues to expand at that pace, AMD could be playing in a $14 trillion market by 2050. But that's not all, because the AI sector could absolutely trounce that opportunity (more on that later).
If you've never used one of Meta Platforms' (META 0.85%) social networks, chances are you know someone who has. Facebook, Instagram, and WhatsApp have a combined 3.7 billion monthly users, which is close to half the population on Earth. Meta is focused on maintaining that advantage and it's doing so in a few ways.
First, it's investing in its Reels feature, which curates short-form video content using AI, primarily to fend off a competitive threat from ByteDance's TikTok. Second, it's pouring billions ($13.7 billion in 2022, to be precise) into building a virtual world called the metaverse.
Meta thinks virtual reality could be the future of social and professional connection, so it's developing both the hardware and the software to cement its leadership position. Some estimates suggest the value of that opportunity could fall between $2 trillion and $30 trillion within the next decade, and it could grow even even more in the long term as the technology improves.
It will be difficult for a competitor to challenge Meta's current dominance, because it has already done the hard part of attracting such an enormous user base. So as long as the company continues to innovate to keep those users engaged, it should maintain its position among the most valuable companies in the world when 2050 rolls around.
Like AMD, Nvidia (NVDA -1.51%) makes some of the world's most advanced semiconductors. But it's focused on becoming a platform computing company, in which it also develops software, especially in segments like artificial intelligence, where it's already a widely recognized leader.
Nvidia's graphics chips are extremely popular in the gaming community, but it's the data center segment that holds the most promise. Its hardware has turned data centers from a place to store information into a training ground for AI and machine learning models -- including OpenAI's ChatGPT. The company's chips also power the most advanced supercomputers on the planet, and for the first time ever, businesses will soon be able to access them online through cloud providers like Microsoft Azure.
The Nvidia Drive platform also holds long-term promise. It's an end-to-end hardware and software solution for car manufacturers wanting to build autonomous self-driving capabilities into their vehicles -- an industry that could generate $14 trillion in value as soon as 2027.
Simply put, Nvidia has inserted itself into almost every aspect of the AI industry. End users will find it difficult to access the technology without an Nvidia hardware or software product, and that is going to drive substantial long-term value creation.
CrowdStrike (CRWD -2.23%) is a cybersecurity industry leader thanks to its continued development of AI to improve accuracy and reduce response times. The corporate world continues to shift its day-to-day operations online using cloud computing technology, and it's leaving organizations more vulnerable than ever.
Hosting valuable assets and applications online leads to a much larger attack surface; hackers can effectively strike from anywhere on the planet. CrowdStrike offers a leading portfolio of solutions to protect the cloud, the endpoint, and user identities, the latter two of which are especially important for organizations with remote workforces.
The company's AI and machine learning models are fed 2 trillion events per day, so they continue to improve at a rapid pace. CrowdStrike currently serves over 23,000 customers, and the more it attracts, the faster its models learn and the better its products become.
A 2022 survey by Morgan Stanleyrevealed cybersecurity is the last expense corporate leaders plan to cut, even in the event of a recession. The fact is, this technology is absolutely critical, and as the world becomes increasingly digital, there's no going back.
Let it be known: C3.ai (AI 1.53%) is my riskiest, most outlandishpick of this bunch, though it's packed with potential. The company is worth just $2.4 billion right now, but it has pioneered a brand-new industry called enterprise artificial intelligence. It sells AI applications to businesses, whether they need ready-made software or an entirely custom solution.
I touched on the potential value of AI earlier in this piece. Ark Investment Management, led by tech investor Cathie Wood, thinks the technology could add $200 trillion in output to the global economy as soon as 2030 through productivity increases in areas like computer programming. If that happens, software providers like C3.ai will have a $14 trillion revenue opportunity.
C3.ai already provides AI applications to the largest organizations in the world from fossil fuel giant Shellto the U.S. Department of Defense. Moreover, the top three cloud computing platforms -- Amazon Web Services (AWS), Microsoft Azure, and Alphabet's Google Cloud -- have partnered with C3.ai to integrate its AI technology into their own services.
Programmers using C3.ai on AWS, for example, can build applications 26 times faster than on AWS alone, with 99% less written code required. C3.ai is already delivering the productivity increases Ark is referring to.
Even if I'm wrong about C3.ai becoming one of the world's most valuable companies by 2050 -- and I very well might be -- there's still room for significant upside in its stock given the disparity between its tiny valuation today and its enormous long-term opportunity.
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Prediction: These Will Be 5 of the Most Valuable Stocks by 2050 - The Motley Fool
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