2 Tech Stocks That Could Help Make You a Fortune

Investing in the stock market can turn a small investment into a large fortune if done wisely. It is crucial to choose your stocks carefully and to keep your portfolio diversified. While there is no guarantee that any stock will perform as expected, a well-constructed portfolio of growth stocks can significantly increase your chances of achieving outstanding returns.

This article will look at two promising companies that could potentially multiply your initial investment over the long haul.

C3.ai

The rising demand for enterprise artificial intelligence (AI) software presents a great opportunity for investors. According to Statista, the AI market is expected to grow at an annual rate of 27% through 2030, reaching a value of approximately $826 billion. C3.ai (AI -4.50%) is a leading provider of AI software targeted at U.S. military and major corporations, with revenue growth aligning with these estimates.

C3.ai has experienced accelerated revenue growth for seven consecutive quarters, reporting a 29% year-over-year increase in its most recent quarter. A significant factor contributing to this growth is C3.ai's strategic partnerships with major cloud service providers, such as Microsoft's Azure cloud. Recently, Microsoft intensified its partnership with C3.ai, a sign that bodes well for the company's expansion.

In the last quarter, C3.ai signed 58 new agreements with notable clients, including ExxonMobil, Coca-Cola, and various U.S. government agencies. However, C3.ai faces challenges regarding profitability, having reported an adjusted net loss of $0.06 per share in the previous quarter, which has affected its stock performance.

Despite this, investors can anticipate future profits as management projects revenue growth to outpace expenses in the long term. If C3.ai meets its targets, the stock's value could significantly increase over the next decade. Currently, C3.ai operates with a trailing revenue of $346 million and maintains a solid cash position of $730 million in cash and short-term investments. Investors prepared to endure some short-term volatility may find substantial rewards in the future.

Shift4 Payments

Shift4 Payments (FOUR -2.05%) is a fast-growing company that specializes in software and payment processing, particularly within resorts, restaurants, and sports entertainment, where it often holds a leading or strong second position.

In the last two years, Shift4 has averaged a remarkable 36% year-over-year revenue growth, indicating a significant opportunity ahead. One key factor driving this growth is the trend of merchants consolidating from numerous software providers to a single system. For example, a hotel might incorporate separate systems for check-in and dining, resulting in inefficiency. Shift4 Payments addresses this issue by providing a complete solution that manages all aspects of payments, security, reporting, and analytics for merchants.

Shift4 Payments is building a competitive edge that could support its continued growth. The company has expanded through acquisitions, thereby gaining access to large customer bases. After acquiring a new business, Shift4 can cross-sell its bundled services to thousands of new clients.

While the company has taken on $2.8 billion in long-term debt to finance its growth, it also possesses $1.4 billion in cash. Notably, Shift4 is starting to see improvements in its profit margins. For the first three quarters of 2024, it reported a 56% year-over-year increase in net income, amounting to $113 million.

Reflecting its growth trajectory, the company’s stock has risen 86% over the past three years, offering the potential for compounding returns for investors. Currently, the stock trades at 22 times this year's earnings estimate, presenting a reasonable valuation for a rapidly growing payments company.

Investors are reminded that investing in growth stocks involves risks, and it's vital to carry out thorough research before making any financial decisions.

investing, stocks, growth