In the 20th century oil revolutionised transportation, powered economic growth, and was critical for industrial production across the globe. It’s also responsible for the fortunes of 100s of businesses and investors. 

But the Big Oil era of the 20th century has been replaced in the 21st.

I’m talking about the new ‘Big Oil’ of Technology!

You see, today we live in an exploding era of technological advancements – Artificial Intelligence (AI), Green Energy, Electric Vehicles (EVs)…you name it.

And all these technologies cannot run without this one thing…

They’re all powered by semiconductors!

What I like to call the new oil of AI tech…

These tiny chips regulate the flow of electric current in modern devices.

Without powerful chips, modern technology and infrastructure would not function.

In other words, the world is likely now more dependent on chips today than it is on oil…

In fact, as of the end of January 2024, the world’s 10 largest oil companies combined are worth about $3.6 trillion.

Meanwhile, the 10 largest chipmakers and chip-related companies combined are worth roughly $4.3 trillion.

The reason why is simple…

New technological advancements have boosted the demand for powerful chips.

Global chip sales over the past 20 years have more than tripled.

Chip demand will grow even more in the years ahead thanks to continued growth in the “Digital Economy” – especially AI.

Computers, smartphones, vehicles, and even appliances are adding AI functions. At this rate, AI will account for 20% of the global semiconductor industry by 2027.

And by 2030, chips will become a $1 trillion industry.

What does it mean for you?

Not only has the chip industry transformed into one– if not the most important sector today… But chip stocks have also become one of the best-performing sectors for investors over the past few years…

For example, the VanEck Semiconductor ETF (SMH) has returned 64% over one year and nearly 300% over five years.

When you look at individual chip companies, the returns are even BIGGER!

For instance,

• Nvidia has returned 230% over one year and 1,747% over five years.
• Broadcom has returned 110% over one year and 348% over five years.
• AMD has returned 120% over one year and 646% over five years.

That’s just a snapshot.

There are many other AI chip stocks that returned hundreds of percent over the same period.

As demand for chips will only grow in the future, there will be plenty more money-making opportunities for investors. For more on big trending investing like this, make sure you are signed up to South African Investor.

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