3 Artificial Intelligence (AI) Stocks That Could Go Parabolic

3 Artificial Intelligence (AI) Stocks That Could Go Parabolic

If you’re like me, you don’t remember much about your high school geometry class. However, I still remember some things, including the intriguing curve called a parabola.

We don’t often encounter the good old parable in adult life. But investors might have the opportunity to see geometry in action with a select group of stocks. These three artificial intelligence (AI) stocks (listed in descending order by market capitalization) could go parabolic with a rapid increase in price over a short period of time.

1. UiPath

So far in 2024, the trajectory of UiPath‘s (NYSE:PATH) the stock looks more like the left side of a parabola, sloping downward. Shares of the robotic process automation (RPA) software company fell by a double-digit percentage.

This decline, however, does not reflect major problems for UiPath. The company reported record revenue of $405 million in its quarter ended Jan. 31, up 31% year over year.

UiPath also achieved its first profitable quarter based on generally accepted accounting principles (GAAP) since its IPO in April 2021.

Cathie Wood’s ARK Invest predicts that AI software could become a $14 trillion market by 2030, up from less than $1 trillion in 2022. UiPath should be in a great position to take advantage of this tremendous growth.

Everest Group ranked the company’s business automation platform as highest in terms of capabilities, market impact and vision.

UiPath’s relatively small market capitalization of around $11 billion also gives it plenty of room to grow. ARK Invest considers the company to be part of the “sleeping AI wave,” that is, promising AI companies that are not as widely followed as the mega-cap giants. He believes that UiPath’s ease of use and scalability gives it a competitive advantage in the AI ​​automation market.

2. BigBear.ai Headlines

AI-powered business intelligence software company BigBear.ai Holdings (NYSE:BBAI) already went parabolic earlier this year, having more than doubled in early March. However, the stock has since given up all of those gains and more.

Some on Wall Street believe BigBear.ai is poised for a major rebound. The stock’s 12-month average price target reflects 124% upside potential. One analyst predicts the stock price could more than triple over the next 12 months.

This optimism is not based on the latest financial performance. The company’s revenue fell 21.4% year-over-year in the first quarter of 2024. BigBear.ai reported a net loss of $125.1 million during the quarter.

However, the company has gained momentum with recent contracts, including an $8.3 million extension of a deal with the U.S. military. It also recently completed the acquisition of vision AI leader Pangiam.

3. Stem

Stem (NYSE:STEM) is the smallest company on this list with a market cap of just over $200 million. It’s also the worst performer of the group this year, plunging nearly 70%.

The provider of battery systems and AI software for smart energy reported a 62% year-over-year decline in revenue in the first quarter and a sharp deterioration in its bottom line.

Can Stem change things? Several analysts think so. The stock’s 12-month average price target is nearly 240% above its current price. The most optimistic analyst surveyed by LSEGowner of the London Stock Exchange, estimates that the stock could skyrocket more than 8.5 times.

Stem canceled some of its less profitable contracts to focus on others with higher margins. The company expects these measures to improve its profitability. Its recent introduction of the PowerTrack Asset Performance Management suite for managing storage, solar and hybrid portfolios could also accelerate its growth.

There is no guarantee that this stock (or UIPath or BigBear.ai, for that matter) will go parabolic. But the global market for energy storage systems is expected to nearly double by 2031 to $506.5 billion, according to Statista. If Stem can capitalize on this huge opportunity, it could return to the winning path of a few years ago.

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Keith Speights has no position in any of the stocks mentioned. The Motley Fool posts and recommends Stem and UiPath. 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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