This article is an excerpt from the InvestorPlace Digest newsletter. To get news like this delivered straight to your inbox, click here.
In 1999, few people thought much about Nvidia (NASDAQ:NVDA). Its shares traded at less than 0.7% the value of those of Intel (NASDAQ:INTC), and much of its business revolved around helping Microsoft design Direct3D processors. Graphical processing units (GPUs) were not yet invented.
Nevertheless, Nvidia would eventually become a behemoth. Its GPUs would become an essential component to video gaming and editing – and now they are needed for machine learning and the Artificial Intelligence Revolution. Shares have risen almost 200X since 1999.
Picking these types of winners is tricky, of course. For every Nvidia that succeeds, dozens more will fail. It’s why InvestorPlace.com writers like Tyrik Torres usually recommend more stable AI picks, like robotics company Teradyne (NASDAQ:TER), which have proven products and profits.
But history also tells us that investors only need to find a handful of Nvidia-like winners to more than offset the losses. In fact, Nvidia would have turned a 10-stock portfolio from $50,000 to $1 million, even if the other nine picks went straight to zero.
Today, we’re going to look at five companies from across InvestorPlace.com, our free news and analysis site, that have the potential to do the same.
Archer Aviation (ACHR)
In June, shares of flying car stock Joby Aviation (NASDAQ:JOBY) jumped 61% after the company announced it had received approval from the Federal Aviation Administration (FAA) to begin testing its electric vertical takeoff and landing (eVTOL) aircraft. Its high share price makes future gains far less likely.
Fortunately, Muslim Farooque has a new pick:
Archer Aviation (NASDAQ:ACHR).
Here’s from Farooque:
Archer is fanning the flames of innovation in air mobility with its novel electric air taxi. The vehicle can comfortably ferry four passengers and a pilot, boasting an impressive range of 60 miles at speeds of up to 150 miles per hour.
Archer Aviation has also quietly partnered with Safran SA (OTCMKTS:SAFRY) – a French aircraft company that has been experimenting with automated aircraft and autonomous navigation assistance for flying taxis. Safran will produce the components for Archer’s flying vehicles.
The choice of Safran suggests that Archer Aviation is already looking beyond regular eVTOLs. Personal flying vehicles will require immense amounts of AI to make them usable by ordinary people (i.e., those without pilot licenses). And even professional pilots will need AI help to navigate increasingly crowded skies. If Archer plays its cards correctly, the small upstart could quickly use AI to beat Joby at its own game.
IonQ (IONQ)
What would happen if you paired artificial intelligence with quantum computing?
According to SAP research project director Laure Le Bars, the results will be incredible.
Classical computers get overwhelmed by exponential calculations when it comes to these enormous amounts of data… AI and machine learning algorithms are perfect candidates for quantum processing.
In other words, quantum computing will make AI exponentially faster at complex tasks. Optimization… weather modeling… even password cracking will become effortless as AI algorithms gain access to quantum computers.
This week, Marc Guberti writes at InvestorPlace.com about his favorite pick in the space, IonQ (NYSE:IONQ). He calls it the top player in the quantum computing world.
IonQ has positioned itself as the first mover and a leading player in the quantum revolution. The company expects to generate double the bookings next year and anticipates delivering the first quantum system in Europe in 2023. Being a first in an industry with large potential has helped the company command a sky-high valuation.
Essentially, IonQ surged ahead by using atomic ion qubits, a technique that has proven far more reliable to competing qubit platforms.
History tells us that paying a premium for leaders is often profitable. Earlier this year, Rigetti Computing (NASDAQ:RGTI) lost most of its senior officers, including its namesake founder. The startup will likely run out of capital by 2024. Even larger tech firms are having trouble making progress. Though Guberti rightly warns that IonQ is pricey from a fundamental perspective, its high potential upside makes it a bet worth taking.
To learn more, click here to read Luke’s latest analysis on why he believes quantum computing is one of the most underrated, most transformational technological breakthroughs since the internet.
iCAD (ICAD)
ICAD (NASDAQ:ICAD) is a leading image-analysis company that helps radiologists and other healthcare providers detect cancers in mammograms. Doctors miss roughly 10% of breast cancers from x-ray analysis, and iCAD’s AI-powered analysis tools reduce that error rate significantly.
Ordinarily, investors should avoid a company like iCAD. The firm has been unprofitable in 34 of the past 37 years, and growth is nonexistent. History tells us that these unprofitable firms eventually vanish.
But Larry Ramer now points out at InvestorPlace.com two catalysts that could power iCAD to profit:
- Booming AI interest. iCAD is benefiting from rising awareness of the power of artificial intelligence. The company recently partnered with Radiology Partners, the nation’s largest radiology practice, and more healthcare providers could join as hospitals (and insurers) realize the importance of AI in cancer detection.
- New leadership. Dana Brown took over the CEO position in AprIl 2023, providing much-needed new leadership. Brown is an industry veteran with experience in turnarounds – a skill set that iCAD’s plateaued business desperately needs.
iCAD has also become an acquisition target. In 2022, the New Hampshire-based firm partnered with Google Health to integrate greater AI capabilities into its breast imaging tools. That makes it a tempting bolt-on acquisition for Google parent Alphabet. A rush by Amazon and Apple into virtual healthcare also makes the buyout case.
Together, these factors could turn iCAD into a billion-dollar business. The company finds itself in the right place, at the right time. All it needs to do now is execute its vision.
Evolv (EVLV)
Peanut butter and jelly…
Salt and pepper…
Metal detectors and long lines…
Detecting weapons has long been an issue of speed. Metal detectors habitually flag keys and cell phones, causing delays. And millimeter wave machines at airports can be even slower, as any weary traveler will know.
That’s where Evolv Technologies (NASDAQ:EVLV) comes in. The Massachusetts-based startup is the leader in using AI to help detect hidden weapons. By using AI to analyze radio frequency (RF) waves at sensor gates, Evolv’s product is smart enough to differentiate between weapons and other metallic devices. Its Express Screens are roughly 10X faster than metal detectors because they allow people to walk full speed through gates.
The result is a hypergrowth firm whose products are found everywhere from Massachusetts’ Gillette Stadium to Wynn’s casinos. Analysts expect for revenues to rise 53% in 2024, and for gross profits to double to $54.2 million.
This week, Chris Markoch also highlights Evolv as a startup to watch. “Right away, you can imagine the potential applications,” he notes. “It’s not hyperbole to suggest that this company’s technology could save lives.”
Shares also have relatively large upside. The $940 million company has a (somewhat depressingly) large addressable market in entertainment venues, workplaces, houses of worship, schools, and hospitals. Evolv believes these alone represent over $20 billion in annual spending. An airport contract with the Transportation Security Administration (TSA) could further increase demand.
That makes Evolv an AI company to watch. If the firm can execute effectively, it will be worth billions in just a few years.
International Business Machines (IBM)
In a recent update, Eric Fry identified three AI-driven stocks that could be the next trillion-dollar companies.
Two of his picks have seen significant recent gains. Together, Intel and Meta Platforms (NASDAQ:META) have added over a half-trillion dollars in market capitalization since January.
Eric’s third pick could be next: International Business Machines (NYSE:IBM).
Here’s why Eric believes that’s the case:
Since 2019, IBM has divested 17 legacy businesses, while also making more than 30 acquisitions. One of the most impactful acquisitions during its shopping spree was Red Hat, which IBM acquired in 2019 for $34 billion…
Red Hat’s capabilities are [now] so formidable that more than 90% of Fortune 500 companies rely on its platform.
He explains that IBM has since integrated its “Watson” AI with Red Hat, creating an opportunity to cross-sell AI products.
It’s working.
Since 2021, IBM’s profits have been on the rise. And though Big Blue still has a long way to go, Eric believes this overlooked company will one day become a dominant leader of the AI boom.
The AI Revolution Portfolio
These five companies are only a tiny part of the vast AI opportunities in front of us. It’s not hard to imagine a future where entire TV shows are generated on demand… or where a personalized AI tutor helps you understand new subjects based on your preferred learning style. But there’s also a darker side to AI.
That’s because AI could put millions of people out of work. It doesn’t matter if you’re a white-collar worker or a blue-collar one; AI and robotics are becoming smart enough to replace both.
That’s why Louis Navellier, Eric Fry, and Luke Lango have been warning of AI driving a massive divide between the “haves” and the “have nots.” Some will learn to harness AI technologies, while others will be replaced by it.
We want to make sure you end up on the right side of the divide. That’s why Louis, Eric, and Luke just revealed brand-new AI research and nine hypergrowth AI stocks that could climb 1,000% or more starting today. If you want the chance to make a lot of money from the AI Revolution, they believe these nine stocks are your best shot. Learn all about it here.
As of this writing, Tom Yeung 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.
