3 Artificial Intelligence (AI) Stocks That Could Go Parabolic

3 Artificial Intelligence (AI) Stocks That Could Go Parabolic

Are you looking for new high-growth stocks to add to your portfolio? You might start with the most obvious option at the moment: artificial intelligence (AI) players.

Describing AI as a unique investment opportunity no longer seems like hyperbole. Even without knowing exactly what the AI ​​industry will look like in just five years, it’s clear at this point that it will live up to the hype. The main challenge now is simply determining which companies are best placed to benefit.

This brings me to three AI stocks that are not yet fully valued in light of their potential. Arguably, each of these three tickers could explode higher once investors connect the dots.

1. Palantir Technologies

You’ve probably heard of OpenAI’s ChatGPT, and you may have noticed that the software giant Microsoft (NASDAQ:MSFT) has merged its Bing search engine with an AI-powered conversational assistant called Copilot. You may have even DIYed this tool, or with AlphabetIt is (NASDAQ:GOOG) (NASDAQ:GOOGL) comparable chatbot, Gemini (formerly called Bard). There’s no denying that these tools are fun to use, in addition to being legitimately useful to those who use them.

From a monetization perspective, however, these platforms do not seem to have much commercial appeal. ChatGPT and Copilot, however, do not represent the best use cases for artificial intelligence technology. AI platforms designed specifically for businesses are proving much more marketable.

Enter Palantir Technologies (NYSE:PLTR).

As a consumer, you will not have used its service. Companies like General millsthe CBS television network, and Aramark are among its new customers, however, joining a growing number of companies using Palantir’s offerings to help them do something constructive with the mountains of digitized data they’ve been collecting for years. The company’s software is also used by the U.S. military and intelligence agencies, as well as an energy company. ExxonMobiland drug manufacturer Sanofi, just to name a few. There simply hasn’t been a data analysis option powerful enough to pay off…until now.

Palantir Technologies has only scratched the surface of its potential, however. Analysts expect its revenue to grow 21% this year, then repeat that feat next year. CEO Alex Karp’s only complaint is that the company I can’t respond to the request.

By the way, stocks are performing well. They have increased by more than 50% in the last year and more than 130% in the last two years.

There is reason to expect that Palantir shares could move higher, given the company’s profitability as well as the fact that it is already a market leader in its niche. Technology Market Research Outfits Gartner And Forrester Search both consistently rank it as one of the leading names in the AI ​​data analytics space, comparing it to much larger players like Microsoft and Alphabet.

2. Super microcomputer

Almost everyone understands NvidiaIt is (NASDAQ:NVDA) hardware is at the heart of most artificial intelligence data centers. Analysts at Mizuho Securities suggest it controls about 90% of the AI ​​processor market.

These graphics processing units (GPUs) and similar powerful processors are just one piece of the technological puzzle that is an AI data center. AI servers are actually huge banks of individual computers that must be built around a processor and then linked together on one or more giant racks. Some companies have to make these computers and then assemble the towers they are part of.

That’s what Super microcomputer (NASDAQ:SMCI) do. Whether a customer prefers Nvidia’s technology or Intel‘s, and if this client wants to use AmazonMicrosoft’s cloud computing service or Microsoft’s Super Micro Computer can offer.

And it works like crazy. Revenue last quarter increased 200% year over year, continuing a well-established growth trend that is expected to continue into the future. Analysts expect revenue growth of 60% in the next fiscal year.

3 Artificial Intelligence (AI) Stocks That Could Go Parabolic

SMCI Revenue Chart (Quarterly)

This is just the beginning. Precedence Research predicts that the AI ​​infrastructure market will see annualized growth of more than 27% through 2033, as more organizations race to create the AI ​​platforms they are increasingly realizing more than they will need if they want to remain competitive.

Super Micro Computer’s stock price has drifted sideways after retreating from the March high. It is very likely that it is simply taking a break, before its next stage of rise.

3. Alphabet

Last but not least, add Alphabet to your list of AI stocks that could go parabolic in the foreseeable future.

It’s a well-respected tech name, but some might have a hard time viewing Google’s parent company as an AI play. While its Gemini/Bard chatbot is a clever use of AI technology, there aren’t many practical business applications. Furthermore, the company’s core business is advertising. Adding an AI profit center to the mix could be a big undertaking.

However, Alphabet is taking on the task and is better positioned than you might think to make it worthwhile.

You see, Alphabet doesn’t aimlessly create an AI company from scratch, just to see what happens. It uses artificial intelligence as a way to further improve its existing advertising business. Last week, the company announced that it would soon allow advertisers to use, for example, AI-generated ads. The company also says ads will soon start appearing in its new AI Previews, which are a separate category of search results for anyone using the Google search engine. Of course, more meaningful user data from Google helps advertisers as well as Alphabet.

What could really support, or even accelerate, the stock’s current rise is renewed optimism from the analyst community. Bank of America Analyst Justin Post recently reiterated his Buy rating on Alphabet stock, citing the latest advances in its AI advertising technology. Goldman Sachs analyst Eric Sheridan said the same thing.

Both recognize that advertising is and will remain Alphabet’s main breadwinner well into the distant future. Its foray into artificial intelligence is complementary to this profession, without however conflicting with it. Investors may be underestimating how much revenue growth awaits them here.

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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. James Brumley holds positions at Alphabet. The Motley Fool holds positions and recommends Alphabet, Amazon, Bank of America, Goldman Sachs Group, Microsoft, Nvidia and Palantir Technologies. The Motley Fool recommends Gartner and Intel and recommends the following options: long January 2025 $45 calls on Intel, long January 2026 $395 calls on Microsoft, short January 2026 $405 calls on Microsoft, and short 47 calls $ in May 2024 on Intel. The Motley Fool has a disclosure policy.

3 Artificial Intelligence (AI) Stocks That Could Go Parabolic was originally published by The Motley Fool

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