Technology is evolving in three key areas right now: artificial intelligence (AI), fifth-generation (5G) wireless, and cloud computing. Taken together, these technologies are expected to revolutionize life as we know it in the coming decades.And while many technology companies play in each sandbox, a handful of companies are dominating and pushing the tech forward.
For investors looking to grow their portfolio, it is important to know which companies are market leaders and advancing the technologies that are reshaping the world. These are the growth stocks that can be counted on to outperform the market and deliver outsized returns to shareholders for many years to come. Here is the tech transformation trio: three stocks leading the charge in AI, 5G, and the cloud.
Advanced Micro Devices (AMD)
In AI, there is Advanced Micro Devices (NASDAQ:AMD). While the company trails archrival Nvidia(NASDAQ:NVDA) in terms of microchips and semiconductors that run AI applications and models, the company is working overtime to catch-up. Early signs are encouraging. As part of its first-quarter financial results, AMD reported that revenue at its Data Center unit grew 80% from a year earlier to $2.3 billion due to strong sales of its new MI300 series AI chip.
Due to overwhelming demand, AMD forecasted AI chip sales this year to be $4 billion. That’s double the amount the company had telegraphed last fall. AMD noted that it has sold more than $1 billion worth of its MI300 AI chips since they launched at the end of last year. While the MI300 chip has only been available for six months, management at AMD says they are already working on new AI chips and successors to the current generation of processors. AMD stock has risen 40% in the last 12 months.
Verizon Communications (VZ)
In fifth-generation wireless, we have Verizon Communications (NYSE:VZ). The telecommunications company’s stock has been on the rise after better-than-expected Q1 financial results and fewer losses among its wireless subscribers. At the end of April, Verizon reported Q1 EPS of $1.15 compared to the $1.12 that was expected among analysts. Revenue totaled $33 billion, which matched Wall Street forecasts.
Verizon credited the results to its flexible plans and streaming bundles that include discounted prices for services such as Netflix (NASDAQ:NFLX). The company also reported that it lost 68,000 monthly bill-paying wireless phone subscribers during Q1, which was much less than an estimated loss of 100,000 subscribers. A year earlier, Verizon lost 127,000 wireless subscribers.
Verizon added that its customers are choosing its premium, customizable “myPlan” option, which has proven popular with consumers. Late last year, Verizon began offering discounted subscriptions to Netflix with its myPlan bundles. VZ stock has gained 13% over the past year.
Amazon (AMZN)
E-commerce giant Amazon (NASDAQ:AMZN) is the leader in cloud computing with a 31% market share. Amazon Web Services (AWS), the cloud computing unit, is increasingly important to the overall company. In Q1 of this year, AWS recorded $25 billion in revenue, beating estimates of $24.5 billion. AWS accounted for 62% of Amazon’s total operating profit during the quarter.
In speaking to analysts and media, Amazon executives credited the company’s growth largely to demand for cloud computing. The strong showing of AWS, which continues to dominate in the cloud space, powered Amazon to an EPS of 98 cents compared to the 83 cents that was forecast on Wall Street. Earnings more than tripled from 31 cents a year earlier. Total sales amounted to $143.3 billion, up 13% year over year.
AMZN stock has increased by 44% in the last 12 months.
On the date of publication, Joel Baglole held a long position in NVDA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelin
