3 Software Stocks That Can Make You a Millionaire

Do you want to get rich? Of course, professional athletes and entertainment icons do well. However, not everyone has enough talent to become any of them.

Fortunately for the rest of us, it is still possible to become a self-made millionaire even with an average income. The key is to find, buy and then hold the right stocks. It’s also worth mentioning that technology stocks contributed more to long-term gains. And that makes sense. After all, these foundational companies are driving the world’s most revolutionary advancements.

Let’s take a closer look at three software companies – a subset of the tech sector – that can help you become a millionaire if you devote enough time to them.

1. C3.ai

You are probably aware of the recent development of several artificial intelligence (AI) platforms such as ChatGPT, Google Gemini (formerly Bard) or something like that Microsoft(NASDAQ: MSFT) now called Copilot. You may have even tinkered with some of these tools yourself to see what they can do. And if so, you were probably impressed.

Which you probably have NO however, there is practical, widespread commercial use of generalized AI-based chatbots.

Just understand that platforms like ChatGPT or Gemini are not the only AI tools available. Over there If higher-level, business-focused AI platforms that are already generating revenue.

C3.ai(NYSE: AI) is one of the largest brands behind enterprise-class solutions. And there was no problem with selling them. Oil and gas giant Shellfor example, it uses C3 technology to predict which elements or components of physical infrastructure require maintenance, which means less downtime due to unexpected failures. The U.S. Air Force has a similar program in place to ensure that most of its planes remain airworthy. The company’s software has even been used to help fight the Covid-19 pandemic.

The point is that most enterprise customers are still learning the full potential of artificial intelligence and its capabilities. Most of this company’s growth is ahead of us rather than behind it. Precedence Research predicts that the global AI software market will grow at an annual rate of 23% through 2032 as more organizations start paying for access to such tools. C3’s revenue is expected to grow to 23% this year and another 22% next year.

Yes, the company’s recent post-earnings surge makes the idea of ​​going public a bit intimidating right now. But don’t be intimidated. C3 shares are still much closer to their all-time lows in late 2022 than they are to the all-time highs reached in late 2020. There is still plenty of room for further gains.

2. Palo Alto Networks

For almost as long as personal computers have existed, criminals have sought to exploit their vulnerabilities. As long as computers and the networks they are a part of exist in the future, nefarious people will continue to exploit them.

The increasing use of computers (and smartphones) actually creates greater opportunities for cybercrime to be committed. According to reports by the United States Federal Bureau of Investigation, the number of online frauds increased by 10% last year, which led to a 22% increase in monetary losses. In total, the FBI estimates that cybercrime losses in 2023 reached $12.5 billion in the United States alone.

Enter Palo Alto Networks(NASDAQ: PANW). This is one of the elements that helps the world protect itself against digital threats. Firewalls, Internet of Things (IoT) support, malware protection, data protection and secure remote login are just some of the services on offer. And he is good at what he does. Technology market research team Gartner for example, it rates its endpoint protection platform as one of the best available.

Anyone who follows this company and/or its stock probably knows that this advantage hasn’t mattered much lately. Although the company’s stock hit an all-time high in February just before the company released its fiscal second-quarter results, lower earnings forecasts for the full year spooked investors, leading to a sharp decline in earnings after the earnings announcement. Since then, efforts to revive the stock have gained little traction.

But take a step back and look at the bigger picture. The company’s revenue is expected to grow 16% this year and another 14% next fiscal year, with comparable card growth at least through 2028. Profits are expected to grow at an even faster rate over that time frame. That’s slightly faster than the nearly 10% annual growth Inkwood Research predicts for the global cybersecurity industry through 2032. But Palo Alto Networks is poised to capture more than its fair share of that growth.

3. Microsoft

Finally, add Microsoft to your list of millionaire-making software stocks.

It’s an oldie but goodie idea. Microsoft is, of course, the original titan of the software market. The Windows operating system is the primary reason why personal computers became widespread back in the 1990s, although personal work and entertainment software certainly helped usher in the personal computer era.

Microsoft is now also the name behind the Bing search engine, owns LinkedIn, offers cloud computing infrastructure services and produces the Xbox video game console – just to name a few other ventures.

However, it is still primarily a software company, and a very important one at that. GlobalStats data shows that the Windows operating system is installed on almost three-quarters of the world’s personal computers. Its office software, such as Word and Excel, still enjoys strong market share.

This is way however, the software industry is changing – and Microsoft is changing with it – which makes these products essential for most products.

You see, instead of purchasing and installing software right out of the box (from disk), more and more consumers and corporations are “renting” access to cloud versions of these programs. While these monthly and annual subscription fees are relatively modest, it actually represents a competitive advantage. This is because their cost is so low that customers are willing to stick with these subscriptions for a long, long time. This reduces the company’s final marketing costs while increasing the reliability and predictability of its revenues.

That being said, perhaps the most significant driver of Microsoft’s growth is the one that has been least seen. That’s what its cloud computing business is all about. Although the company is still lagging behind AmazonMicrosoft’s cloud market share at 31%, data from Synergy Research Group shows that Microsoft’s cloud computing business is growing faster than that of any other vendor. And with a share of 24%, it is not impossible that Microsoft could become the world’s largest cloud service provider in the near future.

Is it worth investing $1,000 in Microsoft now?

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a board member of The Motley Fool. James Brumley has no position in any of the companies mentioned. The Motley Fool covers and recommends Amazon, Microsoft and Palo Alto Networks. The Motley Fool recommends C3.ai and Gartner and recommends the following options: long January 2026 $395 call with Microsoft and short January 2026 $405 call with Microsoft. The Motley Fool has a disclosure policy.