At this point, everyone has heard an earful about the game-changing nature of artificial intelligence. But it’s not just about the large language models and graphics processing units — the computing applications are lucrative too.
AI computing comprises the hidden industry powering the artificial intelligence systems we interact with every day. These computing systems rely on the aforementioned GPUs to train and run complex machine learning algorithms. Companies committed to this AI training pattern can be classified as AI computing stocks.
At its core, AI computing involves millions of complex mathematical calculations per second. This allows machine learning algorithms to solve layered equations that are applied to analyze patterns and relationship probabilities.
The resulting systems then feed on raw computing power and oceans of data to provide output based on user prompting. As such, the companies that develop the methods for satisfying this industry appetite could provide massive return potential.
ServiceNow (NOW)
Specialized in cloud-based platforms that digital enterprise operations, ServiceNow (NYSE:NOW) has established a profitable niche among AI computing stocks. The company provides platform-as-a-service solutions that allow customers to apply AI for service automation. Thanks to a user-friendly platform that helps organizations improve efficiency and reduce costs, ServiceNow earns a strong reputation among customers.
This has made them indispensable to over 8,100 customers and around 85% of Fortune 500 companies. Moreover, ServiceNow delivered 27% subscription revenue growth in Q4 of its 2023 fiscal year. The company also closed 70 deals over $1 million, and increased platform workflows by 40% in the same quarter.
With the current generative AI improvements accelerating at exponential rates, ServiceNow’s automation opportunities are projected to continue expanding. This has resulted in the company looking ahead confidently, with a newly projected 25% revenue growth for 2024. As such, ServiceNow presents a stable, long-term stock for growth-focused investors.
One Stop Systems (OSS)
A pure play in high-performance computing, One Stop Systems (NASDAQ:OSS) has positioned itself perfectly to grow alongside AI applications. From designing and manufacturing rugged AI computing modules to integrated systems for edge applications, OSS is at the forefront of the industry.
Moreover, the company’s high-reliability servers, computation accelerators and flash storage arrays specifically built to withstand harsh conditions have proven successful. These products also allow for vertical integration across the AI training process from data capture and training to large-scale inference. This approach to AI computing has made OSS popular with sectors like defense, oil and gas, mining and autonomous vehicles.
Because of this niche, the company projects a revenue of $6 million from defense programs for 2024, maintaining its customers. Despite a loss of 17% in revenue year-over-year, OSS’ potential still shines bright as AI becomes more critical to the military and defense contractors.
Oracle (ORCL)
Now it’s time to talk about a big player in the tech world, Oracle (NYSE:ORCL). As one of the world’s largest software companies by revenue, Oracle presents a premium entry to into AI computing stocks. With constant improvements to its Oracle Database product, the company is important to AI developers who store gargantuan training datasets.
Recently, Oracle has focused extensively on expanding in the cloud computing industry. By becoming a dominant force in outsourced computing, Oracle is primed to take advantage of the increase in calculative demand due to AI. Data from Q3 of FY 2024 supports this, as Oracle reported surging demand for cloud services.
With Oracle predicting continued cloud revenue growth, it’s clear the investments in infrastructure and capability are paying off. Thus, as demand for outsourced AI data processing grows, investors should consider Oracle among AI computing stocks to buy.
On the date of publication, Viktor Zarev 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.
