SPECIAL REPORT The Top 7 Stocks for 2024

AI Innovators: 3 Stocks Shaping the Tech Landscape

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  • AI innovators have been some of the top performing stocks in recent years.
  • Nvidia (NVDA): The company’s GPU chips are fueling AI growth.
  • Microsoft (MSFT): Copilot is a new AI product that strengthens Microsoft 365 apps.
  • Palantir (PLTR): The company is expanding into the private sector and is tapping into new revenue opportunities.
artificial intelligence stocks - AI Innovators: 3 Stocks Shaping the Tech Landscape

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Artificial intelligence has helped companies offer better products and services that translate into higher revenue. The technology has been a boon for investors, with some of the top artificial intelligence stocks tripling in value within a few years. Some stocks have achieved those gains year-to-date (YTD). 

Many companies and consumers benefit from the continued innovation in artificial intelligence. However, there are a few key corporations that are driving a large percentage of the innovation. Investing in the leaders of artificial intelligence can lead to enticing long-term returns. 

Investors looking to get exposure to innovators in the industry may want to consider these top artificial intelligence (AI) stocks.

Artificial Intelligence Stocks: Nvidia (NVDA)

Nvidia (NVDA) investment growth and profit trading concept. Nvidia company logo on screen of smartphone against blurred background of up trading stock chart
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Nvidia (NASDAQ:NVDA) has been one of the top-performing artificial intelligence stocks in the market. Shares have gained 226% YTD and are up by 1,167% over the past five years. 

Despite the recent gains, Nvidia still has an attractive valuation. Shares currently trade at a 24-forward P/E ratio and a 0.50 PEG ratio. The company has been posting excellent financials in recent quarters as the company experiences strong demand for its data center business.

In the third quarter of fiscal 2024, Nvidia achieved 206% year-over-year (YOY) revenue growth and 1,259% YOY net income growth. The company has posted incredible quarter-over-quarter growth rates as well. 

Nvidia’s GPU chips help to form the backbone of artificial intelligence. This technology relies on advanced chips to operate and grow, and Nvidia has a clear lead.

Nvidia’s other business segments are also performing well. The Gaming segment grew by 81% YOY while the Professional Visualization segment expanded by 108% YOY.

Microsoft (MSFT)

Black and cyber blue illustration of brain made out of light of circuit board with chip at the center of the brain, representing artificial intelligence (AI) stocks
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Microsoft (NASDAQ:MSFT) has exposure to many industries, including AI. The firm made a $13 billion investment in OpenAI, the company that created and launched ChatGPT. Microsoft stock is currently the best way to get exposure to OpenAI.

The tech giant isn’t exclusively relying on OpenAI for its AI initiatives. Microsoft Azure has been a growth driver for several years and helped the company grow revenue by 13% YOY in the first quarter of fiscal 2024. Azure also offers generative AI for businesses that want to enhance their productivity and gain market share.

Generative AI allows businesses to integrate AI with their business models. Azure customers can train AI to perform various tasks and use built-in tools to have a better experience with AI. Microsoft Azure bridges the gap and makes innovative artificial intelligence technology more accessible to small businesses and large corporations.

Microsoft is also using artificial intelligence to improve the workplace. Copilot is an AI bot that acts as a virtual assistant as you navigate various Microsoft 365 apps. The AI bot can create PowerPoint presentations with a few inputs and perform other tasks that allow people to save time. Copilot strengthens the value proposition of Microsoft 365 apps and can increase retention. 

Palantir (PLTR)

Palantir Logo. Palantir Technologies (PLTR) is a publicly traded American company that focuses on the specialized field of big data analytics.
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Palantir (NYSE:PLTR) shares have been on a wild ride since the company’s IPO in 2020. After almost quadrupling in a few short months, Palantir crashed hard. The stock lost over 80% of its value from peak to trough. However, shares have been recovering and have gained 217% YTD.

Palantir has multi-year contracts with several governments which has resulted in steady revenue. The company has always been good at delivering double-digit revenue growth, but a switch to profitability and expanding margins make the stock more compelling.

Palantir recently reported its fourth consecutive quarter of GAAP profitability and has expanded into the private sector. The company is still expanding its presence among governments. That revenue segment grew by 12% YOY. However, the company also increased commercial revenue by 23% YOY. U.S. commercial revenue grew by 33% YOY.

Palantir is tapping into a new market that is on the path to surpassing its government contracts. Government contracts yielded $308 million in the quarter while commercial revenue totaled in at $251 million. 

Palantir’s technology helps consumers and businesses “develop, integrate, and operationalize AI.” Companies and governments use the technology to analyze significant amounts of data points in days instead of weeks. The firm has partnered with many big tech companies and looks ready to gain more market share.

On this date of publication, Marc Guberti held long positions in NVDA and MSFT. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Marc Guberti is a finance freelance writer at InvestorPlace.com who hosts the Breakthrough Success Podcast. He has contributed to several publications, including the U.S. News & World Report, Benzinga, and Joy Wallet.


Article printed from InvestorPlace Media, https://investorplace.com/2023/12/ai-innovators-3-stocks-shaping-the-tech-landscape/.

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