As we look toward the future, artificial intelligence stands out as a critical driver of innovation and economic growth. AI’s potential to revolutionize industries is immense. It’s not just about automation or efficiency; AI promises to unlock new frontiers of creativity and intelligence that we’re only beginning to explore.
AI stocks represent a compelling opportunity for investors aiming to build generational wealth in a market that’s increasingly looking forward. These companies are at the forefront of a technology wave that could define the next century, making them potentially lucrative investments for those looking to contribute to their grandchildren’s financial security.
While the buzz around AI has caused some stocks to soar to high valuations, hidden gems remain that can generate high returns in the long term. Hence, three AI stocks for long term growth that can deliver outsized returns in the future.
Upstart (UPST)
Upstart (NASDAQ:UPST) is known for its revolutionary AI lending model. The company has faced significant fluctuation in its stock price influenced by the Federal Reserve’s interest rate policies.
In early 2022, Upstart’s revenues soared, with quarterly revenues exceeding $300 million and loan origination volumes reaching $4.5 billion. However, the landscape shifted dramatically by 2023, with FED continuing to hike rates and the loan market facing a decline.
Despite the current challenges, the company has maintained a bullish outlook with the potential for rate cuts anticipated to reinvigorate the personal loan market. This optimism is underpinned by the total outstanding consumer credit nearing $5 trillion, suggesting a vast market potential for Upstart’s innovative lending solutions.
Upstart’s growth strategy includes expanding its partnership network, which grew from 10 partners at its IPO to about 100 by early 2024. This expansion enhances its market reach and underpins its revenue generation capabilities. Furthermore, Upstart’s commitment to AI and technology innovation remains strong, maintaining its competitive edge in fintech.
Lemonade (LMND)
Lemonade (NYSE:LMND) is making significant strides in revolutionizing insurance through advanced AI and customer-centric solutions. Lemonade’s innovative approach provides a substantial growth opportunity, especially as it enhances its AI capabilities and expands its geographical footprint.
The company’s strategy to leverage AI to streamline processes and enhance customer interactions has seen it grow its customer base impressively. LMND reported an increase in In-Force Premium (IFP) of 22% year-over-year in the latest quarter, indicating robust demand for its offerings. Moreover, Lemonade reported revenue of $119.1 million, surpassing analyst expectations by about 5%.
The company’s AI-driven platforms, such as Blender, have been instrumental in significantly reducing the Loss Adjustment Expense (LAE) ratio — from 13.2% to 7.6%.
Lemonade’s expansion into the European market and adding new product lines, such as auto insurance, signify its strategic intent to diversify and tap into new revenue streams. The company’s growth in Europe, which has launched in multiple countries, reflects its ability to scale internationally despite the challenges.
Samsara (IOT)
Samsara (NYSE:IOT) is a leading provider of Internet of Things solutions. The company has been making significant strides in transforming how businesses leverage operational data for enhanced efficiency and insights.
Samsara reported impressive Q1 2025 results, demonstrating substantial growth and operational efficiency. The company’s EPS stood at $0.03 for the quarter, surpassing expectations by $0.02. The revenues were reported at $280.73 million, marking a 37.40% increase year-over-year (YoY) and exceeding forecasts by $8.33 million. This performance underscores Samsara’s ongoing expansion and the increasing efficacy of its operational strategies.
Samsara’s competitive advantage lies in its proprietary technology, which has processed operational data across numerous sectors over several years. This historical data accumulation allows Samsara’s AI-enhanced platforms to offer data tracking and deep insights that promote operational improvements. As the IoT landscape evolves, Samsara’s continuous integration of AI into its offerings is expected to keep it at the forefront of the industry.
On the date of publication, Mohammed Saqib did not hold (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.
