Which artificial intelligence (AI) stock is most likely to achieve a 5x gain by 2030: Alphabet, Amazon, Microsoft, Meta or Nvidia?

You don’t have to look hard to find well-known stocks that have been multibaggers in recent years. alphabet‘S (GOOG 0.78%) (google 0.77%) Since 2014, the stock price has risen more than four times. Amazon‘S (AMZN -0.83%) During the same period, the stock price rose more than 9 times. microsoft (MSFT -0.71%) I gained more than 10 times the profit. meta platform‘ (meta -1.22%) The stock price soared seven times. Then there nvidia (NVDA -5.55%)The stock soared a ballpark 19,400%.

But those impressive returns are now history. Which of the following stocks has the potential to return 5x by 2030?

Strong growth prospects globally

I think all five of these stocks should have strong growth prospects going forward. They share a common tailwind that is expected to blow significantly in the coming years: artificial intelligence (AI).

As IT spending moves from on-premises to the cloud, Amazon Web Services, Microsoft Azure, and Alphabet’s Google Cloud are poised for tremendous growth. The scramble to build AI capabilities will accelerate this trend. Nvidia will almost certainly be a direct beneficiary of this migration. The company’s GPUs remain the most preferred chips for powering AI apps.

Meta is not a cloud provider or chip manufacturer. But the company’s open source approach to AI development could pay off in the long run. Meta CEO Mark Zuckerberg believes the benefits of this strategy include improved AI safety and security, greater ability to integrate new AI innovations into Meta products, and a competitive advantage through hiring the best developers and researchers.

But AI isn’t the only growth driver for these five stocks. Amazon still has plenty of room to operate in other areas it is expanding, including the e-commerce market and healthcare. Microsoft’s opportunities include gaming, particularly through its recent acquisition of Activision Blizzard. Alphabet has some notable “other bets” like the healthcare-focused Calico and Verily. Meta is investing heavily in the development of the Metaverse. Nvidia’s early success came from supporting gaming apps, which still represent a major growth market.

Narrow the list

I like all of these stocks. I think all of them can deliver solid long-term returns. But to choose a winner, you’ll need to narrow down the list.

What gets removed first? My choice is meta. The company will not directly benefit from AI like the three cloud service providers or Nvidia. Meta’s big investment in the Metaverse may not pay off until 2030 (or perhaps ever). Social media platforms continue to dominate, but they don’t have as much growth potential as they once did.

For me, the next chopping block is Amazon. E-commerce remains the company’s largest source of revenue. As previously mentioned, this is still a growth opportunity for Amazon. However, the opportunity is not as great as that of other companies on our list. This could make it more difficult for Amazon’s stock price to rise fivefold by 2030.

I would reluctantly leave Microsoft off the list as well. My main deciding factor here is valuation. Based on Wall Street’s five-year growth projections, Microsoft’s price-to-earnings-to-growth (PEG) ratio is more than 2x, the highest multiple of any stock except Amazon. Of course, these growth projections may be overly pessimistic. Nonetheless, I think it will be more difficult for Microsoft stock to increase fivefold in the future due to its initial valuation.

finalist

This leaves two final candidates: Alphabet and Nvidia. Choosing between them is difficult.

In addition to continued growth through its current apps and Google Cloud, Alphabet could gain significant growth momentum from its Waymo self-driving car business. Cathie Wood’s Ark Invest predicts that the robotaxi market will be worth $9 trillion by 2030. Waymo is likely to be the leader in this market. Google is also considered a top innovator in quantum computing technology, which could be another game changer.

But Alphabet faces some risks. Ark Invest’s robotaxi market forecast may be too optimistic. Achieving the potential of quantum computing may take much longer than anyone expects. AI-based virtual assistants could undermine the growth of Google Search in the future. Alphabet’s “other bet” may disappoint.

What about Nvidia? It is arguably the most important company in the world today. Every other company on our list (and thousands of others) relies heavily on Nvidia’s GPUs. CEO Jensen Huang believes the shift toward accelerated computing and generative AI will “double the global installed base of data center infrastructure within the next five years and create a market opportunity worth hundreds of billions of dollars annually.” If he’s right, Nvidia could realistically quintuple its profits by 2030.

On the other hand, NYU finance professor Aswath Damodaran believes that Nvidia is by far the most overvalued “Magnificent Seven” stock, even considering its strong growth prospects. The company is also facing increasing competition in the AI ​​chip market, which could intensify in the coming years.

Most likely you will get a 5x profit.

So which stocks are most likely to deliver a 5x gain? I’m giving the nod to Nvidia. The company should benefit from virtually every technology growth market, including AI, gaming, self-driving cars, and the metaverse. That said, I don’t think it will be easy for Nvidia to become a 5x company again (because of the challenges already mentioned).

Perhaps the most important takeaway from this hypothetical experiment is that all of these stocks could make investors a lot of money in the long run. I don’t think you’ll have any problems buying Alphabet, Amazon, Microsoft, Meta, or Nvidia as long as you hold the stocks long enough.