Artificial Intelligence (AI) stocks experienced a significant downturn over the summer months, with the VanEck Semiconductor ETF dropping by 25% from its historic peak set in July. However, the potential of AI remains compelling for long-term investors, as we’re still in the nascent phase of this transformative technology. Many advancements in AI are expected to unfold over the coming years and decades, making a strong case for investment in this sector. Below are two standout AI stocks that should be on the radar of investors looking for long-term opportunities.
One stock leading the pack is Palantir Technologies (NYSE: PLTR). This company has positioned itself as a frontrunner in AI-driven data solutions. Recently, Palantir’s announcement of its inclusion in the S&P 500 index sent its shares soaring, contributing to a remarkable 113% increase year-to-date. The company’s financial performance has been impressive, with quarterly revenues climbing to $678 million, a 27% annual increase. Furthermore, Palantir is expanding its presence in the commercial sector, boasting a customer base of 295 U.S. companies — a staggering 83% growth compared to last year. During its latest quarterly report, Palantir revealed that it secured 27 major deals, each valued over $10 million, indicating robust demand for its AI innovations. According to CEO Alex Karp, the company’s growth is fueled by an insatiable demand from customers seeking advanced artificial intelligence solutions that transcend basic academic concepts.
The other compelling stock for investors is Nvidia (NASDAQ: NVDA). Despite mounting concerns over its high valuation, Nvidia remains a top pick for long-term investment. The stock has risen over 600% in just two years, reflecting the soaring demand for its products, especially graphic processing units (GPUs), which are critical in developing AI models. In its most recent quarter, Nvidia reported an astounding revenue of $30 billion — an impressive 122% growth year-over-year. For investors, the trajectory of Nvidia is akin to the ongoing evolution of the internet; its relevance and potential will extend far into the future, making it a critical asset in the AI landscape. The continued evolution of AI technology positions Nvidia to benefit immensely, as it delivers essential tools like the H100 and its upcoming Blackwell chip, which cater to the ever-expanding AI development market.
For those considering an investment in stocks like Palantir Technologies or Nvidia, it’s worth noting that while Palantir did not make the Motley Fool’s list of their ten best stock picks, the rapid growth and potential of these companies in the AI sector cannot be overlooked. The allure of AI continues to capture the interest of investors, and for good reason — the potential returns from these sectors could be monumental in the years ahead.
In closing, the AI sector, exemplified by companies like Palantir and Nvidia, shows promise not just for robust financial returns but also for significant technological advancements that can redefine industries and consumer experiences. Investors looking for opportunities to capitalize on this technological revolution should keep a close eye on these market leaders and create a diversified, forward-looking portfolio centered around the future of AI.