Investing in companies that are about to experience accelerated growth can allow you to earn huge returns in the stock market. It would be better if you could buy these stocks at reasonable valuations relative to their earnings growth potential.
With that in mind, here are two stocks that could deliver exceptional returns over the next five years.
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shares AMD(NASDAQ:AMD) It has soared 49% in the past six months and is close to a new high. Investors could stand to gain more as AMD targets the $1 trillion artificial intelligence (AI) computing market.
AMD is not growing as fast as NVIDIA It leads the graphics processing unit (GPU) market, but investors don’t necessarily have to catch up to competitors to do well on the stock. Demand for AMD Instinct data center GPUs is accelerating, with its data center business growing 22% year-on-year in the third quarter.
AMD expects its revenue growth to continue accelerating in the coming years. The catalyst for 2026 is the Helios rack system. Helios aims to close the gap with Nvidia’s data center system solutions. It weighs 7,000 pounds and features multiple chips, including AMD’s MI455 GPU and EPYC central processing unit (CPU). It provides powerful memory bandwidth and is ideal for artificial intelligence inference, where models learn to make predictions based on new data without human input.
AMD’s MI350 GPU drives growth through 2025, while OpenAI and Oracle Deployment of the MI450 GPU, which will be launched in 2026, is being queued. These top AMD customers provide visibility into near-term revenue growth.
However, AMD will need to prove its ability to become the default AI computing provider to other hyperscalers in order to drive the stock price higher. To this end, it has announced plans to launch the MI500 GPU in 2027, which will improve AI performance by 1,000 times. This signals to investors that the company has a pipeline of products expected to drive long-term growth.
Analysts generally expect AMD’s earnings to grow at an annualized rate of 45% over the next few years, which is consistent with management’s long-term outlook for annualized revenue growth of 35%. Strong demand for data center chips is expected to drive higher profit margins and fuel a significant jump in earnings.
With AMD shares trading at 33 times expectations this year, investors are getting solid value and potentially strong returns on their investment in the coming years.
New chips from Nvidia and AMD require more power to operate, but data centers are already facing power shortages. This gap is expected to widen in the coming years. this is an opportunity clean spark(NASDAQ: CLSK)leading Bitcoin The miner has a portfolio of power, land and data center assets worth more than 1.3 gigawatts to meet this demand.
CleanSpark’s mining operations are delivering solid results. The company holds more than 13,000 Bitcoins generated by mining operations. It’s a profitable business, with earnings of $1.25 per share by fiscal 2025, which will prove valuable as it invests to seize opportunities in artificial intelligence.
Management wants to adjust its data center portfolio to meet the demands of higher performance computing. Although this opportunity comes late compared to other miners, the huge shortage of available power in data centers should leave ample opportunity for CleanSpark.
CleanSpark has acquired 285 megawatts of site in Texas to build artificial intelligence data centers for hyperscale enterprises. It also owns a 250-MW site in Sandersville, Georgia, and other sites around Atlanta, for a total capacity of more than 100 MW.
These megawatts are extremely valuable. For example, core weaving Signs 15-year, $11 billion deal with China Apply numbers last year. That’s 400 megawatts of data center capacity. December, Cabin 8 Signed a 15-year, $7 billion agreement with Anthropic for an initial capacity of 245 MW.
CleanSpark’s primary risk is the execution of the construction schedule, where it is critical to bring these facilities online on time. Offsetting this risk is its profitable Bitcoin mining business, not to mention the stock’s low price, with a price-to-earnings ratio of just 12 times.
Investors are essentially paying a fair price for the mining operation while reaping the benefits of the AI infrastructure opportunity at almost no premium. Over the next five years, investors could reap substantial returns if management manages to strike multiple deals with hyperscalers for its data center pipeline.
Before buying shares of Advanced Micro Devices, consider the following factors:
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John Ballard has worked at Advanced Micro Devices, Bitcoin, and Nvidia. The Motley Fool owns and recommends Advanced Micro Devices, Bitcoin, Nvidia and Oracle. The Motley Fool has a disclosure policy.
2 Monster Stocks Brewing to Buy and Hold Originally published by The Motley Fool
