Artificial intelligence (AI) is the most prevalent technology in the world right now. Companies everywhere are looking to incorporate tools and software into their products and operations. This high demand for AI software and hardware is a strong indicator of the market potential. To be exact, it was projected that businesses would spend $200 billion on AI investments by 2025.
It’s no surprise that companies that are investing equally as much into developing the latest AI software and hardware are benefitting the most from this boom. Furthermore, the happiest people in this exchange are investors who own shares in these companies. While some AI stocks have fallen flat, these three picks are the best buys if you want in on the fun.
We’ll cover what makes these companies so successful within the fiercely competitive AI market. And these incredible growth prospects can instill confidence for consistent returns for many years.
Intel (INTC)
Intel (NASDAQ:INTC) remains a top tech competitor because of its processors used in personal computers and devices worldwide. However, the tech giant has recently made some exciting moves. Those indicate a transition into a part of the chip market that is more in demand than ever – manufacturing.
While other chip makers like Nvidia focus on designing chips, Intel is focused on hands-on work. It reported plans to invest over $100 billion to build several manufacturing plants throughout the U.S. Since Intel already has much cash to fund its expansion, its new position in the chip market offers fantastic potential. Indeed, the processor giant could become a top pick for U.S. manufacturing.
Further, the demand for AI chips puts Intel in a great position to profit tremendously after this plan is implemented. The scale of this project will certainly cost Intel in the short term. But after bringing in $12.7 billion in revenue in Q1 and a similar amount expected for Q2, Intel seems to be in a comfortable enough position to finance internally.
Thus, Intel is relatively cheap within the tech and AI sector. Its future plans for expansion into chip manufacturing teems with potential for excellent long-term profits.
Palantir Technologies (PLTR)
Palantir Technologies (NYSE:PLTR) is one of the most prominent companies in custom software development solutions for businesses. PLTR integrates AI and machine learning into its enterprise software to help businesses take their operation software to the next level.
While Palantir Technologies has had a few ups and downs, it has been gaining momentum lately. And, Q1 for Palantir saw a 21% growth in revenue year-over-year (YOY) and a 42% increase in customer count. Additionally, Palantir still has to collect over $1 billion in unfulfilled backlog.
Palantir has succeeded in growing it’s customer base by diversifying. The company has a history of providing software to government agencies, including a recent $480 million contract with the Pentagon. However, Palantir has been growing it’s commercial customer base as well, which grew 27% in the most recent quarter.
The company has fantastic potential and is on track to continue growing at a healthy pace for the foreseeable future. Investors can get their hands on it now while it is still undervalued and at a low price.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) has been at the top of AI chips and the AI conversation for some time now. There is no denying the company’s roaring success, holding the largest market share within processing chips for AI technology.
Truthfully, Nvidia is expensive. But in terms of its price-to-earnings and growth ratio, it is priced better than ever. And there is no shortage of growth or earnings from Nvidia. The company has continuously broken its own quarterly record for revenue several quarters in a row. Most recently, the company posted revenue of $26 billion, up 262% YOY.
Thus, it has a clear market share majority and a dominant hold over the chip market in an era when AI is more popular than ever. Hence, Nvidia remains on top and is expected to remain for many years to come.
On the date of publication, Joel Lim 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.
