The 3 Best AI Stocks To Buy for Massive Upside Potential
InvestorPlace - Stock Market News, Stock Advice & Trading Tips Many companies have benefited from their application of AI. But these three AI stoc...
Artificial intelligence (AI) has been the focal point of science fiction for the longest time. However, in 2021, it has become an inevitable reality for many companies. Most of us think of fancy gadgets and sentient robots when it comes to AI. But a lot of it revolves around complex algorithms and software, which enable enterprises to make more effective decisions. AI allows companies to automate repetitive tasks and make decisions based on high-quality data. Therefore, AI stocks represent one of the most lucrative investment options in the stock market.
The AI industry is among the fastest-growing spaces. In fact, it’s expected to grow at a CAGR of 35.6% from 2021 to 2026. The top AI companies to invest in include several bigwigs of the tech world. These companies are already using machine learning, neural networks and other related processes to make better decisions for their business.
The case for investing in AI hasn’t lost steam, as AI proliferated during the pandemic, especially as a tool for public health. As the AI boom gains more momentum in the future, AI stocks are likely to gain impressively. Having said that, let’s look at three of the most impressive companies with substantial upside potential:
AI Stocks to Buy: Nvidia (NVDA)
Nvidia is a no-brainer in any AI stocks to buy list. The company is the leading provider of specialized semiconductors, which have multiple applications in the AI realm. As of Q2 2021, NVDA held an 83% market share in the dedicated GPU sector. Its robust GPUs are used in data centers that process machine learning and AI tasks.
The leading public cloud providers in Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN) and Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google use Nvidia’s top data center products. Its data center revenue shot up 124% to $6.7 billion, representing 40% of its sales in fiscal 2021.
Last year, it purchased U.K.-based chip designer Arm for $40 billion and data center equipment manufacturer Mellanox. Moreover, Nvidia now has plans to develop an AI lab in England featuring an AI-powered supercomputer. Hence, the company’s strategy of going all-in on its AI initiatives has helped push its stock from $25 in 2016 to over $800 recently.
Salesforce is a cloud-based software company that provides customer relationship management (CRM) services to its clients. In addition to its CRM services, it also offers a complementary suite of enterprise applications. Its services enable companies to effectively manage their sales teams, automate tasks and improve customer relationships.
The company provides a robust integrated solution topped off by its AI service called Salesforce Einstein. Salesforce Einstein helps clients scale customer experiences and increase productivity. It provides deep insights about customers, enabling sales teams to strengthen relationships and lead campaigns to drive their business forward.
The company has been on a roll lately, as its revenues surged over 24% to $21.25 billion in fiscal 2021. It expects its 2026 revenues to come in at $50 billion — more than double its figure in 2021.
AI Stocks to Buy: Palantir Technologies (PLTR)
Palantir is a Colorado-based company that provides data mining and big data analytics services for its clients. It operates two main platforms which include Gotham. Gotham is used by government agencies. Private sector customers use its second platform, Foundry. Each of these platforms collect data from distinct sources and process them using AI algorithms. This helps Palantir’s clients make better decisions. Its clients span a wide range of industries, including defense, healthcare and other areas.
The effective integration of its cutting-edge software solutions helped boost its revenue to $1.1 billion last year. That’s an increase of 47% from the previous year. Moreover, the company expects its revenues to grow at a healthy rate of over 30% from 2021 to 2025.
PLTR stock has grown an impressive 170% since going public last year and it still has plenty of upside as it looks to tap into more private sector opportunities.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.
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