Let’s face it, every growth-oriented investor dreams of riding the coattails of the next tech giant, imagine, being among the early backers of the next Amazon, Microsoft, or Alphabet and reaping millionaire-making gains. While the grandeur of these tech giants still looms large, some smaller tech stocks are quietly positioning themselves to potentially pave the way for new millionaires in the coming decades. Snowflake, DigitalOcean, and Wolfspeed are the unsung heroes in this narrative, often overshadowed by the bigger or flashier peers. These companies may harbor similar potential for wealth creation, provided investors recognize the latent prospects embedded within these underdogs.
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Snowflake: Unpacking the Data Warehousing Disruptor
If you’re looking for a story of David versus Goliath, Snowflake perfectly embodies it in its battle against tech titans such as Amazon, Microsoft, and Alphabet. Snowflake’s approach of integrating data warehouses into a wide array of public cloud platforms without operating its own cloud infrastructure gives it the agility to appeal to a broader market. Moreover, its stellar revenue growth trajectory, compound annual growth rate (CAGR) of 98% from fiscal 2020 to fiscal 2023, shows no signs of slowing. With a projected product revenue of $10 billion in fiscal 2029, it’s evident that the formidable potential of Snowflake could still mint new millionaires despite its current premium valuation.
DigitalOcean: Carving Its Niche in the Cloud
DigitalOcean, often underestimated in the shadow of tech behemoths like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud, is thriving thanks to its unique offering. By catering to smaller companies with its “droplets” of servers, it has secured a distinct space in the cloud infrastructure services market. Notably, its cost-effective stock, with margins on the rise and anticipated first full-year profit in 2023, positions it as a potential goldmine for long-term investors. Its recent foray into AI applications further bolsters its appeal, making it a tantalizing acquisition target for industry leaders.
Wolfspeed: Paving the Way for Semiconductor Evolution
Formerly known as Cree, Wolfspeed is rewriting the narrative of traditional silicon chips with its wide-bandgap (WBG) semiconductors. These innovative chips, tailored for a plethora of applications from electric vehicles to 5G base stations, are set to capture a significant share in the burgeoning WBG market. Despite a projected temporary revenue decline, Wolfspeed’s strategic expansion plans and its stock’s undervaluation at just 4 times next year’s sales underscore the potential for long-term gains for discerning investors.
Before jumping into Snowflake or any investment, it’s always critical to analyze your investment strategy and consider professional advice. If you’re planning to invest in Snowflake, dig into this for additional insights.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Leo Sun has positions in Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, DigitalOcean, Microsoft, Nvidia, Snowflake, and Wolfspeed. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
