Yahoo Finance 5 AI-Related Growth Stocks to Supercharge Your Investment Portfolio
The surge in demand for generative artificial intelligence (AI) has led to rising interest in stocks with exposure to this new trend.
Companies can leverage the generative AI trend to boost their top and bottom lines for many years to come.
If you include such growth stocks within your portfolio, you can tap into the rising boom and have a front-row seat in witnessing the latest developments within the generative AI space.
Here are five AI-related stocks you can consider that are well-positioned to supercharge your investment returns.
Nvidia (NASDAQ: NVDA)
Nvidia was the inventor of the graphics processing unit (GPU) back in 1999 which sparked the growth of the personal computing market.
Today, Nvidia’s AI platform allows full-stack innovation across its infrastructure so that its clients’ projects can reach production faster and have higher accuracy and efficiency.
The GPU manufacturer’s share price has more than tripled in the past year to close at US$898.78 recently.
There may be more to come.
For its fiscal 2024 (FY2024) ending 28 January 2024, Nvidia saw its revenue surge 126% year on year to US$60.9 billion.
Operating profit catapulted more than seven-fold year on year to US$33 billion while net profit soared more than six-fold year on year to US$29.8 billion.
Free cash flow for FY2024 came in at US$27 billion, a sharp increase from just US$3.8 billion a year ago.
Nvidia provided an outlook for revenue to come in at US$24 billion for the first quarter of fiscal 2025 (1Q FY2025).
Assuming it can meet this guidance, it will represent a more than tripling of revenue from 1Q FY2024’s US$7.2 billion.
C3.ai (NYSE: AI)
C3.ai is an enterprise AI application software company with a family of fully integrated products along with an end-to-end platform for developing and deploying enterprise AI applications.
For the first nine months of FY2024 (9M FY2024) ending 31 January 2024, C3.ai saw total revenue rise 15.2% year on year to US$224 million.
Around 88.5% of its revenue is made up of subscription revenue.
For the third quarter, the company closed 50 agreements, up 85% year on year, including 29 new pilot projects representing a 71% year-on-year jump.
New agreements were entered into with Boston Scientific (NYSE: BSX), T-Mobile (NASDAQ: TMUS), and Holcim (SWX: HOLN), among others.
Partner-supported bookings soared 337% year on year and management believes the company has a huge total addressable market (TAM) that can allow it to grow its business further.
Alphabet (NASDAQ: GOOGL)
Alphabet is the holding company for search engine giant Google and the company also owns video-sharing website YouTube and offers a cloud service called Google Cloud.
In December last year, Alphabet introduced Gemini, its largest and most capable AI model to date.
This software is multi-modal and can understand, operate across and combine different types of information including text, code, audio, image, and video.
Technology giant Apple (NASDAQ: AAPL) is said to be in talks with Alphabet to license Gemini for future iPhones.
Alphabet has also pulled off an impressive financial performance for the first quarter of 2024 (1Q 2024).
Revenue hit US$80.5 billion for the quarter, up 15% year on year, while operating profit came in at US$25.5 billion, 46% higher than the level reported a year ago.
Net profit clocked in at US$23.7 billion, climbing 57.2% year on year.
Advanced Micro Devices (NASDAQ: AMD)
Advanced Micro Devices, or AMD, develops computer processors and related technologies for the personal computing market.
The company produces products to power generative AI and large-language models (LLMs) including some of the world’s fastest supercomputers.
Just last December, AMD introduced its new flagship AI GPU accelerator, the Instinct MI300X, along with a new APU (accelerated processing unit) MI300A.
An APU is a type of central processing unit (CPU) with integrated graphics processing functions.
The company reported a respectable set of earnings for 1Q 2024 with revenue inching up 2% year on year to US$5.5 billion.
Operating profit came in at US$36 million, reversing the US$145 million loss in the prior year.
Net profit stood at US$123 million, a sharp turnaround from the net loss of US$139 million a year ago.
AMD CEO Dr Lisa Su commented that the widespread deployment of AI is driving demand for more computing power which will benefit the company in the years to come.
Palantir (NYSE: PLTR)
Palantir uses AI on its software platform to deliver analytics for its clients.
The company was ranked number one in an IDC worldwide AI software study in terms of 2021 market share and revenue.
Palantir’s software is deployed in more than 50 industries including manufacturing, health sciences, finance, and government.
Revenue for 1Q 2024 rose 20.8% year on year to US$634.3 million.
Operating profit leapt more than 19-fold year on year from US$4.1 million to US$80.9 million.
Net profit soared more than six-fold year on year to US$105.5 million.
Palantir also closed 87 deals above US$1 million and saw its US commercial customer count grow 69% year on year to 262.
The company’s total customer count jumped 42% year on year to 554.
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Disclosure: Royston Yang owns shares of Apple and Alphabet.
The post 5 AI-Related Growth Stocks to Supercharge Your Investment Portfolio appeared first on The Smart Investor.
