Investing in underappreciated AI stocks offers significant growth potential as AI technologies revolutionize various sectors. With increasing adoption and advancements, AI is poised to drive innovation and create substantial economic opportunities in the coming years. Enterprise AI as an industry is booming, with a projected CAGR of 34.6%, and is forecast to reach $155.2 billion by 2030. The industry’s most important driver of growth is technological advancements, as AI is currently seen as the most promising aspect of future technology. The additional need for complex data sets and innovation will drive growth for underappreciated AI stocks.
AI is reigning supreme in terms of technological industry growth and profit delivery. The only question is what specific companies to invest in. Below are three of the best underappreciated AI stocks.
Netflix (NFLX)
Netflix (NASDAQ:NFLX) began as a DVD rental service in 1997 but quickly moved onto streaming services. The company saw its biggest rise in the 2010s, establishing the streaming service as an international giant.
Netflix has incorporated itself into the artificial intelligence game. The service utilizes AI-based algorithms in its customer interface. Netflix launched its data science campaign to use AI recommendations that best suit a customer’s interest in show recommendations. This allows Netflix to grow its connection with customers and its use of AI.
Netflix has seen success with its promotion of artificial intelligence. Many studios and show makers they work with utilize Netflix’s AI approach to revive old characters and emulate scenes that could have never been done before. This has led Netflix to become a giant in the artificial intelligence industry, working with many other companies to succeed and grow.
C3.ai (AI)
C3.ai (NASDAQ:AI) is a technology company specializing in enterprise artificial intelligence. Its main products include large-scale AI applications, an application development platform and generative AI software.
C3 stock is down 13% YTD. However, recent trends have shown investor optimism in the stock, as it skyrocketed 11% in the last month. Three out of eight analysts on Yahoo Finance rate the stock as a buy or strong buy. Those analysts target an average price of $29.73.
The company has demonstrated solid financial growth within the past year. Revenue was up 5.55% in 2023. And, it potentially has more income coming in the future, with $135 million in accounts receivable.
C3.ai’s most valuable asset is its experience in the AI industry. Established in 2009, the firm has had a head start within the sector. This allows the company to capitalize on opportunities, and with the recent AI boom, it is faced with limitless opportunities to increase. C3 has rapidly started initiatives, such as offering its generative AI as a product and partnering with Paradyme, a technology solutions company, to produce AI solutions for the U.S. intelligence community.
Symbotic (SYM)
Symbotic (NASDAQ:SYM) is an American robotics innovator with a focus on creating automotive technology and integrating artificial intelligence software. SYM has witnessed solid growth year-over-year, with a 37% increase in valuation.
The automated robotics industry, where Symbiotic holds a firm footing, is reportedly expected to encounter exponential growth in the following years. In 2024, the market will reel in $45.85 billion in revenue, with forecasts slating $95.93 billion by 2029. The market has a projected CAGR of 15.91% with high expectations for companies within.
SYM’s financials leaped in Q2 2024, mainly in year-over-year gains compared to Q1 2023. SYM established strong returns on revenue with $424.3 million, marking a significant YoY growth of 59%. Although not profitable, the net profit margin climbed 32.31% YoY to -1.55%. Furthermore, Symbiotic’s strong financial outing was partly due to the heavy outperformance of industry forecasts, such as beating EPS projections by 801.78% and reaching negative 7 cents.
Symbotic’s list of highly valued partners aids its claim to fame in the automation industry. Specifically, SYM’s collaborative efforts with Walmart (NYSE:WMT) improved the retail giant’s speed and efficiency in distributing goods. Additionally, a joint venture with SoftBank (OTCMKTS:SFTBY) upgraded SYM’s AI capabilities for retail in the future. These two extensive collaborations, among others, improve SYM’s name brand and outreach in the robotics sector and will continue to do so as 2024 progresses.
On the date of publication, Michael Que 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.
The researchers contributing to this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
