3 disruptive actions that could turn $ 200,000 into $ 1 million by 2030

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As history clearly suggests, the biggest gains in the stock market are over the long term. The 3,600% increase in S&P 500 over the past 40 years is proof that time in the market is more important than timing in the market.

But some innovative companies have crushed the performance of larger indices. To take Amazon, for example, which has climbed 191,000% since its IPO in 1997. Given the rapid pace of change in technology, the next Amazon-like opportunity may be imminent.

These Motley Fool contributors think Nvidia (NASDAQ: NVDA), Snowflake (NYSE: SNOW), and Palantir (NYSE: PLTR) could be the next tech disruptors to beat the market this decade (and beyond).

Image source: Getty Images.

Graphics are the future of reality

Anthony Di Pizio (Nvidia): Semiconductors have become the most important component of modern manufacturing. These are the advanced computer chips that power digital consumer goods like smartphones, game consoles, and even cars. As products move more and more towards digitalization, the demand for these chips increases and Nvidia is a premier producer.

The company is best known for its graphics cards, which make it a key player in futuristic technologies such as virtual reality, augmented reality and even autonomous vehicles. But right now, Nvidia’s graphics products are consumer favorites for PC gaming applications, to the point that the global supply is constantly running out. In fact, the company sold more than $ 3 billion worth of gaming-related graphics cards in the most recent fiscal second quarter, up 85% from the same quarter last year.

Overall, assuming Nvidia’s current price-to-sales ratio stays the same, it needs to increase its revenue by 20% per year until 2030 for its inventory to increase fivefold from here on out, and therefore turn $ 200,000 into $ 1 million. Right now, he’s crushing that growth rate.

Metric

Fiscal year 2020

Fiscal year 2022 (Estimate)

TCCA

Returned

$ 10.9 billion

$ 25.7 billion

53%

Data source: Nvidia, Yahoo! Finance. CAGR = compound annual growth rate.

But Nvidia is also very profitable. It generated record earnings per share of $ 6.90 in fiscal 2021, which is 53% growth from fiscal 2020, and led the company to pay out $ 395 million in dividends. throughout the year. It’s not often that tech companies offer solid profitability to support their astronomical growth rates, so Nvidia’s investment case certainly stands out.

But it’s the smaller segments of the business – professional visualization and the automotive industry – that could become the main drivers of long-term growth. After all, the future of tech seems to be dominated by augmented realities and autonomous vehicles.

A computer motherboard with wires in the shape of a snowflake.

Image source: Getty Images.

Snowflake: the epitome of neutrality

Jamie Louko (snowflake): It can be difficult to find disruptive businesses that could deliver huge ROIs over the next 10 years, but Snowflake, a company that has capitalized on the business’s move to the cloud for data storage, could be. the maid. Snowflake is a data warehouse provider, which means that when companies collect data from their business operations and want to store it for later use, they can access Snowflake to store it.

Snowflake competes with Amazon’s AWS, Microsoft‘s Azure, and AlphabetGoogle Cloud, but Snowflake has a major competitive advantage: neutrality. If a business has data stored on both AWS and Azure, the business will have to go through both systems individually to receive its data in order to use it – which takes enough time – and with it stored in two different zones, it can be difficult. to analyze it effectively. With Snowflake, it would pull this data from either of the data warehouses for the customer and transform the data into an easily understandable format so that it could be analyzed.

The company has storage space on AWS and Azure so businesses can choose where they want to store data for the future. While this poses a risk for Snowflake – by permanently giving money to its competitors – this is how the company remains the neutral party. This aspect of the business appears to be important to customers – Snowflake has 116 customers spending more than $ 1 million on the platform as it increased its second quarter 2021 revenue by 103% on a year to reach $ 272 million. It has a high net retention rate of 169%, which means customers spend 69% more today than during the period a year earlier.

Despite the company’s operating loss of 58% of sales, it is valued at 110 times sales. The company is running on all fronts, however, and its total addressable market is huge and growing: Snowflake expects enterprise cloud spending to grow 235% to $ 356 billion per year by the time. 2025. While its valuation is sky-high, there is no doubt that this company will continue to capitalize on the blizzard of data being created while disrupting the way it is stored.

A person looking at a dashboard filled with digital data.

Image source: Getty Images.

Silicon Valley’s most secret start-up

Trevor Jennevine (Palantir Technologies): Modern businesses create a lot of data, which is both good and bad. Data is knowledge, and knowledge can be powerful. But extracting information can be difficult, as data is often spread across different applications and infrastructures. This is where Palantir can help.

The company – named after an omniscient crystal ball of The Lord of the Rings – provides analysis software that helps clients integrate and make sense of siled data sets. In turn, this enables leaders and executives to make informed decisions, and it enables data scientists to create powerful artificial intelligence (AI) models.

In 2003, Palantir began working with the US intelligence community. The Pentagon and the CIA have deployed its Gotham software to Iraq and Afghanistan, where it has played a critical role in helping US special forces detect roadside bombs and track down terrorists (including Osama bin Laden). Since then, Gotham has been adopted by many other government agencies, including the U.S. military, air force, and coast guard.

To complement this product, Palantir’s Foundry platform offers similar functionality to commercial organizations and has been adopted in 40 different industries. For example, Foundry helps retailers forecast demand, helps manufacturers monitor supply chains, and enables pharmaceutical companies to accelerate drug discovery. More importantly, customers can access archetypes (that is, workflow models) that accelerate the time to value for existing use cases. And as Foundry adapts to new use cases, the number of archetypes available is expected to increase.

Despite intense competition, Palantir differentiates itself in two ways: First, its past work with classified information underscores the security of its platform. Data privacy is a significant issue, and few other companies (if any) have been given national secrets to the same extent as Palantir. Likewise, the company’s third platform (Apollo) is a continuous delivery solution that keeps Gotham and Foundry up to date, but it also enables these Software as a Service (SaaS) products to operate in environments atypical.

Specifically, SaaS is typically deployed in public clouds, but Palantir’s SaaS runs in public clouds, private data centers, and even classified networks. In fact, its platforms have been deployed in submarines, airplanes, and Humvees. Management believes this makes Palantir unique. Not surprisingly, the company is growing at a steady pace.

Metric

Q2 2020 (TTM)

Q2 2021 (TTM)

TCCA

Customers

137

169

23%

Returned

$ 901.1 million

$ 1.3 billion

47%

Data source: Palantir SEC Filings, YCharts. TTM = 12 rolling months.

I like the prospects for Palantir’s future growth. Management assesses its market opportunity at $ 119 billion and the company recently won several large contracts, including a deal with the U.S. military worth $ 823 million.

More importantly, as digital transformation brings about the creation of ever-growing data treasures, organizations hoping to leverage it will need powerful analytics tools, and Palantir meets that demand perfectly. This is why this stock could be multiplied by five by 2030.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.


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