2 AI Stocks That Could Create Lasting Generational Wealth
Artificial intelligence (AI) is creating tremendous new opportunities in software and computing hardware. The AI market is projected to grow at an annualized rate of 28% through 2030 to reach $826 billion, according to Statista.
This growth will certainly send some stocks skyrocketing in value in the years to come. Here are two great choices to help you profit from this opportunity.
1. Palantir Technologies
The floodgates of enterprise investment in AI are starting to open. Palantir Technologies (NYSE: PLTR) reported accelerating growth for its AI software platforms. The stock more than doubled over the past year, which could be just the beginning of a long stretch of wealth-building returns for investors.
Palantir is delivering strong revenue growth because it is selling software that helps its customers get a structural advantage over their competitors. Here are a few examples of how companies are using the product.
Lowe's is using Palantir's software to speed up the completion of tasks in customer service.
In healthcare, Palantir is helping Cleveland Clinic to better estimate bed capacity and demand.
Cereal maker General Mills uses Palantir to gain better insights in order flow and plan its supply chain.
General Mills is saving $14 million annually with Palantir. That gives investors an important insight into why Palantir's U.S. commercial revenue grew 55% year over year last quarter.
Research company Gartner has found that 92% of businesses plan to invest in AI-powered software, which is quite significant for Palantir's future. This could drive the AI software market to almost $300 billion by 2027. That's a lot of upside for a company with just $2.5 billion in trailing revenue.
Investors should expect ups and downs along the way. Stocks don't move up in a straight line, but the long-term growth of Palantir's business should deliver massive returns for investors.
2. Advanced Micro Devices
Investors are high on the prospects of Advanced Micro Devices (NASDAQ: AMD) due to its data center opportunity. It is the second-leading maker of graphics processing units (GPUs) behind Nvidia, which positions AMD well in the growing $250 billion data center market.AMD's data center revenue jumped 115% year over year in the second quarter.
However, other emerging opportunities add to its growth prospects. Revenue from AMD's client segment, including sales of PC processors, is exploding right now, with revenue up 49% year over year last quarter. Demand for AMD's Ryzen central processing units (CPUs) should only grow in the years to come, as a new generation of AI-optimized PCs come to market.
AMD's Ryzen AI 300 series laptop processors are receiving positive reviews, and the company anticipates more products in the coming quarters from leading PC brands like ASUSTEK Computer, HP, and Lenovo. This positions AMD for further market share gains against Intel in the CPU market.
Adoption of AI PCs is a strong growth catalyst for AMD, considering its client segment makes up a quarter of total revenue. The opportunities to supply GPUs to data centers for AI workloads and CPUs for AI PCs could propel the stock to monster gains over the next decade.
With the stock trading at about 35% off their 52-week high, now is a great time to invest before more growth sends the shares higher.
Should you invest $1,000 in Palantir Technologies right now?
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John Ballard has positions in Advanced Micro Devices and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, HP, Nvidia, and Palantir Technologies. The Motley Fool recommends Gartner, Intel, and Lowe's Companies and recommends the following options: short November 2024 $24 calls on Intel. The Motley Fool has a disclosure policy.
