Discover the High-Velocity Shares with Potential to Propel Your Wealth into Millions
Discover the High-Velocity Shares with Potential to Propel Your Wealth into Millions
Finding an investment that can instantly turn you into a millionaire might be a challenge. However, there are some companies out there that have managed to do just that for some lucky investors. For instance, a $10,000 investment in Nvidia a decade ago is now worth $2.72 million, and the same amount invested 12 years ago in Tesla is now worth over $2 million. These companies were often overlooked, but those who held onto them saw significant returns even during market fluctuations.
Instead of chasing the elusive unicorn of a millionaire-making investment, it might be wiser to search for an investment that can help speed up your journey towards becoming a millionaire. This can be achieved by focusing on stocks that consistently outperform the market year after year.
Consider the example of an initial investment of $10,000. If you manage to secure a yearly return of 10% (the market average) or an impressive 15%, it will take 48 or 33 years, respectively, to reach the millionaire milestone. If you can find a stock capable of delivering a 15% return or higher each year, then you've struck gold.
One such stock that could potentially offer this kind of growth over the next couple of years is Taiwan Semiconductor Manufacturing (TSM -0.26%). Given its strategic position in several secular trends, this company stands out as a potential investment winner.
Taiwan Semiconductor: A Key Player
Taiwan Semiconductor is the world's largest contract chip manufacturer. They produce chips in their foundries and create chips for some of the world's most technologically advanced companies, such as Apple and Nvidia**. As a cutting-edge company, Taiwan Semi is currently producing 3 nanometer (nm) chips, the most advanced chips available in the market. In 2025, it is expected to release its 2nm chips, which will further boost the company's revenue growth.
Taiwan Semi's management is confident that its revenue will increase by 15% to 20% at a compound annual growth rate (CAGR) "over the next several years." Given that a stock often grows at a similar pace to its sales growth in the long term, this optimistic projection indicates that Taiwan Semi's stock has strong potential to maintain a high-teen percentage growth rate over an extended period.
One significant factor contributing to Taiwan Semi's growth potential is artificial intelligence (AI) revenue. In the second quarter of 2023, management projected that AI-related revenue would increase at a 50% CAGR for the next five years. This figure originally accounted for 6% of TSMC's revenue. However, management's initial forecasts underestimated the true potential of AI.
During TSMC's latest earnings call, management revised its outlook. For 2024, it now expects AI revenue to triple and account for a mid-teens percentage of its total revenue. This substantial upgrade from its previous forecast suggests that TSMC's stock might experience rapid growth in the near future. Moreover, there seems to be no sign of AI revenue slowing down, enhancing the likelihood of TSMC's stock exhibiting remarkable growth.
Robust Growth in the Near Future
Wall Street analysts also share a favorable view of TSMC's growth prospects.
Their forecasts for the following two years suggest a 26% increase in 2025 and a 18% increase in 2026. This aligns with TSMC's management's projections and serves as a clue that the stock may display solid growth in the coming years.
Furthermore, the stock is not overvalued. Although it was more affordable at the beginning of 2024, with a price-to-earnings ratio (P/E) of 32.5 and a forward P/E ratio of 28.9, it's still a reasonable price to pay for a technological leader like Taiwan Semiconductor. Compared to other big tech companies like Apple and Microsoft, which are growing at a much slower pace, TSMC is relatively cheaper.
Although Taiwan Semiconductor may not immediately transform you into a millionaire, its growth potential is strong enough to deliver market-beating returns. With the AI sector poised for rapid expansion, Taiwan Semiconductor's stock could be prepared for a spectacular 2025.
Investing in Taiwan Semiconductor Manufacturing (TSM) could be a strategic move for those aiming to boost their wealth more quickly. Considering the company's expected growth in revenue and AI-related revenue, as well as the positive outlook from Wall Street analysts, TSMC might provide market-beating returns.
With Taiwan Semiconductor's potential high-teen percentage growth rate and its role as a key player in the lucrative AI sector, this stock may contribute to an individual's journey towards financial prosperity, even if it doesn't guarantee overnight success.