Artificial intelligence (AI) has grabbed investors’ attention thanks to its potential to revolutionize so many industries, from healthcare to automotive. In fact, some researchers predict the size of the AI market could soar past $1 trillion by 2030. So, investors have bought shares of possible winners, including those powering AI models and companies using AI to improve their operations.
This has produced explosive gains in some stocks, which may prompt you to wonder if, in some cases, many years worth of anticipated good news is priced into shares at their current levels. That’s a valid question, and it’s clear that, as with any new, high-growth area, some gainers don’t have what it takes to keep up the pace.
But there are some that do. In fact, two top AI stocks that have climbed more than 200% over the past year seem unstoppable. And that means it’s a great idea to buy these potential winners and hold onto them for the long term. Their gains may just be getting started.
An AI-powered robotic finger and a human finger touch.
1. Nvidia
Nvidia (NASDAQ: NVDA) leaped into the spotlight as it became the go-to company for the essential ingredient to power AI: the chip. The company is far from being new to designing chips, though.
Nvidia developed graphics processing units (GPUs) years ago, and they became the standard for the gaming industry. Their ability to handle many processing tasks simultaneously made them the crucial ingredient for all of the visual elements involved in powering games — and a few years down the road, this same ability made GPUs critical for powering AI too.
Today, Nvidia controls more than 80% of the AI chip market, and the company’s reputation, full suite of products and services, and rising investment in research and development mean it’s likely to stay ahead. Nvidia’s earnings over the past year show an impressive pace of growth, with annual revenue and net income rising by triple-digit percentages. Revenue has set records quarter after quarter, led by the company’s data center unit, which includes its AI offerings.
It’s also important to note Nvidia’s products are in use by all of the major cloud platforms, meaning the company is able to reach customers through services they know and trust — and these cloud platforms work to sell Nvidia products to these customers.
Even considering Nvidia’s enormous gains over the past year and a half, the company only trades for 31 times forward earnings estimates, a reasonable price considering Nvidia’s dominance in the market and the growth prospects ahead.
2. Palantir Technologies
Businesses of all kinds own loads of data that, if collected and managed properly, could be extremely valuable for their operations. This is where Palantir Technologies (NYSE: PLTR) comes in. The software company helps corporate and government clients aggregate data and use it to make key decisions. And AI plays a central role in the process.
Last year, Palantir launched its Artificial Intelligence Platform (AIP), and business has been booming. In the company’s most recent letter to shareholders, Chief Executive Officer Alex Karp referred to AIP as the future of Palantir, and said it has already driven gains in revenue and customers. Palantir’s manner of introducing AIP to potential customers is particularly clever — the company hosts “bootcamps” to highlight its services and show individual companies how AIP could be a game-changer for them.
Palantir once was known largely for serving governments, but these days, it has put its focus on growing its commercial business, and those efforts are bearing fruit. In the fourth quarter, Palantir’s commercial revenue growth outpaced government revenue growth — with a 32% gain versus an 11% gain. And U.S. commercial revenue, in particular, took off, climbing 70% year over year.
Now let’s talk valuation. Palantir’s might seem lofty at 74 times forward earnings estimates, but I’d be willing to pay a premium for this stock, knowing the company is in the process of making an important shift toward increasing its commercial business and growing its newly launched AIP service.
Here, it’s key to imagine potential a few years down the road. And from that angle, considering the momentum in commercial customers and AIP, Palantir looks like a clear buy today.
SPONSORED:
Should you invest $1,000 in Nvidia right now?
Before you buy stock in Nvidia, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of February 26, 2024
Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia and Palantir Technologies. The Motley Fool has a disclosure policy.
News Related
-
, Nov. 28 — One of the most anticipated Android releases for 2023 has been the Google Pixel 8 lineup. The Pixel series is often considered the best of what Android has to offer since it brings the true stock Android experience. The Pixel 8 Pro was globally released on ...
See Details:
Google Pixel 8 Pro Review: Is this the best Android phone of 2023?
-
A blank space or an (NR) indicates no readings received. An (e) indicates that the water level has been estimated. An (w) indicates that the conditions were very windy, resulting in an inaccurate reading. Omatjenne Dam does not have abstraction facilities. The dam contents are according to the latest dam ...
See Details:
Namwater Dam Bulletin on Monday 27 November 2023
-
Dhaka, Nov. 27 — Nobel laureate Dr Muhammad Yunus has been appointed chair of the international advisory board of Moscow’s Financial University (under the government of the Russian Federation). On November 23, he joined a high-level strategic meeting with Prof Stanislav Prokofiev, Rector of the Financial University, and his colleagues. ...
See Details:
Dr Yunus appointed chair of Moscow Financial University's international advisory board
-
In a pivotal encounter at the International Cricket Council (ICC) Twenty20 World Cup Africa Final Monday, the Cricket Cranes faced Nigeria, knowing that a win could significantly boost their chances of securing one of the coveted tickets to the 2024 T20 World Cup in West Indies and the USA.Nigeria won ...
See Details:
Victory over Nigeria puts Uganda on the brink
-
Capture 1 The Bank Ghana (BoG) Monetary Policy Committee (MPC) has maintained the key policy rate at 30 percent, while introducing additional liquidity management measures to address excess liquidity and reinforce the disinflation process. Announcing the committee’s decision on Monday following its 115th meeting, BoG Governor Dr. Ernest Addison said ...
See Details:
BoG holds policy rate at 30%, tightens liquidity measures
-
Renita Holmes has been displaced four times in the past three years by rising rents With sea levels rising around the globe, Miami, in the US state of Florida, is facing an urgent need to adapt. As property investors turn their gaze inland, away from the exclusive low-lying beach area, ...
See Details:
When sea levels rise, so does your rent
-
Picture2 In a groundbreaking moment, Mrs. Adelaide Siaw Agyepong, CEO-American International School, has achieved yet another milestone by being crowned ‘Icon of Inspiration and Impact for the Year 2023’. The crowning achievement took place in Accra, where Mrs. Siaw Agyepong surpassed contemporaries to clinch this prestigious title at the 5th ...
See Details:
American International School CEO honoured as ‘Icon of Inspiration and Impact’
-
Freetown’s streets were almost empty on Sunday after a curfew was imposed Gunmen in Sierra Leone attacked a military barracks and freed hundreds of prisoners in a “co-ordinated and properly planned” attack, the country’s information minister has said. Sierra Leoneans spent Sunday under a nationwide curfew amid disarray in capital ...
See Details:
Sierra Leone prison breaks co-ordinated - minister
-
Freetown’s streets were almost empty on Sunday after a curfew was imposed Gunmen in Sierra Leone attacked a military barracks and freed hundreds of prisoners in a “co-ordinated and properly planned” attack, the country’s information minister has said. Sierra Leoneans spent Sunday under a nationwide curfew amid disarray in capital ...
See Details:
Address the rise of single parenthood
-
Freetown’s streets were almost empty on Sunday after a curfew was imposed Gunmen in Sierra Leone attacked a military barracks and freed hundreds of prisoners in a “co-ordinated and properly planned” attack, the country’s information minister has said. Sierra Leoneans spent Sunday under a nationwide curfew amid disarray in capital ...
See Details:
Hyundai Chief Picked as Auto Industry Leader of the Year
-
Freetown’s streets were almost empty on Sunday after a curfew was imposed Gunmen in Sierra Leone attacked a military barracks and freed hundreds of prisoners in a “co-ordinated and properly planned” attack, the country’s information minister has said. Sierra Leoneans spent Sunday under a nationwide curfew amid disarray in capital ...
See Details:
Unmarried People Under 35 Outnumber Married Ones
-
Freetown’s streets were almost empty on Sunday after a curfew was imposed Gunmen in Sierra Leone attacked a military barracks and freed hundreds of prisoners in a “co-ordinated and properly planned” attack, the country’s information minister has said. Sierra Leoneans spent Sunday under a nationwide curfew amid disarray in capital ...
See Details:
European interior ministers in Hungary to discuss migration
-
Freetown’s streets were almost empty on Sunday after a curfew was imposed Gunmen in Sierra Leone attacked a military barracks and freed hundreds of prisoners in a “co-ordinated and properly planned” attack, the country’s information minister has said. Sierra Leoneans spent Sunday under a nationwide curfew amid disarray in capital ...
See Details:
Japan on the watch for unlicensed taxis around Narita airport amid foreign tourism spike
-
Freetown’s streets were almost empty on Sunday after a curfew was imposed Gunmen in Sierra Leone attacked a military barracks and freed hundreds of prisoners in a “co-ordinated and properly planned” attack, the country’s information minister has said. Sierra Leoneans spent Sunday under a nationwide curfew amid disarray in capital ...
See Details:
ECOWAS to send high-powered delegation on solidarity visit to Sierra Leone
OTHER NEWS
Despite doing education at the university, Mellon Kenyangi, also known as Mama Bear, did not think of going to class, and teaching students was her dream job.“Since it was not ...
Read more »
213 Sri Lanka Cricket’s Chairman of Selectors, Pramodya Wickramasinghe reported to the Sports Ministry’s Special Investigation Unit( SMSIU) for the Prevention of Sports Offences yesterday for the second day. He ...
Read more »
137 Malindu Dairy (Pvt) Ltd., a leading food production company in Sri Lanka, won the Silver Award in the medium-scale dairy and associated products category at the Industrial Excellence Awards ...
Read more »
Africans Urged to Invest Among themselves, Explore Investment Opportunities in Continent Addis Ababa, November 27/2023(ENA)-The Embassy of Angola in Ethiopia has organized lecture on the “Foreign Investment Opportunities in Angola ...
Read more »
144 The dynamic front row player Mohan Wimalaratne will lead the Police Sports Club Rugby team at the upcoming Nippon Paint Sri Lanka Rugby Major League XV-a-side Rugby Tournament scheduled ...
Read more »
Dozens of people living with disabilities from New Hope Inclusive in Entumbane, Bulawayo on Saturday last week received an early Christmas gift in the form of groceries. The groceries were ...
Read more »
The East African Community (EAC) Summit of Heads of State has admitted the Federal Republic of Somalia to the regional bloc, making it its 8th member country. The decision was ...
Read more »