3 Disruptive AI Stocks That Could Dominate the Market by 2027

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  • These disruptive AI companies’ strategic moves and tech innovations signify their potential to dominate the market by 2027, influencing the AI space.
  • AMD (AMD): Its sequential uptick in data center and client segments is propelled by demand for EPYC processors and Ryzen 7000 processors.
  • Salesforce (CRM): Salesforce boasts double-digit revenue growth, substantial liquidity, and the successful introduction of Data Cloud and Einstein GPT Copilots.
  • Adobe (ADBE): Its Digital Experience business, with recent innovations like GenStudio, achieves robust revenue growth with key customer wins.
AI stocks to dominate - 3 Disruptive AI Stocks That Could Dominate the Market by 2027

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In the AI space, three prominent companies stand poised to reshape the market by 2027. Each company, a titan in its domain, weaves strategies of disruption. They are charting a fundamental course that promises to redefine AI. This has led to this article on AI stocks to dominate.

The first one’s meteoric rise, fueled by a strategic diversification strategy, showcases a company adept at meeting market demands. On the other hand, the second one demonstrates double-digit revenue growth and introduces game-changing products like GPT Copilots. The company elevates the standard for AI in customer relationship management. Meanwhile, the third one’s digital experience business, propelled by its experience platform and cutting-edge solutions like GenStudio, focuses on staying ahead in the digital experience arena.

This article explores the heart of these companies’ strategies. It analyzes the strategic threads that could lead them to dominate the AI market by 2027.

AMD (AMD)

In this photo illustration, the AMD logo is shown on a smartphone screen.
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AMD’s (NASDAQ:AMD) data center segment is vital to market value growth. For instance, despite reporting flat year-over-year revenue, the sequential growth of 21% is vital in Q3 2023. This sequential uptick suggests a positive response to AMD’s product offerings within the data center space. Also, the solid demand for 3rd- and 4th-generation EPYC processors boosted record quarterly server processor revenue. Notably, 4th Gen EPYC CPU revenue grew more than 50% sequentially.

On the other hand, the client segment, marked by a 42% year-over-year revenue increase and a sequential growth of 46%, suggests AMD’s robust performance in the consumer market. This significant growth reflects the strong demand for AMD’s products and the progressive execution of its market strategies.

Moreover, sales of Ryzen 7000 processors featuring the Ryzen AI on-chip accelerator experienced substantial growth. This is driven by the normalization of inventory levels in the PC market and the return of demand to seasonal patterns, indicating a successful alignment of AMD’s product offerings with market trends.

The profitability achieved in the client segment, with an operating income of 10% of revenue, marks a turnaround from a year ago when the segment reported an operating loss. Hence, this shift reflects AMD’s effective cost management and improved revenue streams in the consumer market. This makes it one of those AI stocks to dominate.

Despite the challenges in the semi-custom space, gaming graphics revenue grew year-over-year and sequentially, driven by increased demand in the channel. Operating income of 14% of revenue in the gaming segment, compared to 9% a year ago, suggests improved profitability, driven by higher revenue from Radeon GPU sales. Overall, these developments suggest the importance of AMD’s strategy to diversify its product portfolio and focus on high performance to edge out competition.

Salesforce (CRM)

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Salesforce (NYSE:CRM) has solid top-and bottom-line growth that may continue to sustain over the long term. For instance, the company reported a progressive quarter and year, showcasing double-digit revenue growth and exceeding non-GAAP margins of 30% in Q3 fiscal 2024.

Three main factors contribute to the excitement surrounding the recent quarter. Simultaneously, there is massive growth in liquidity, particularly the $1.5 billion in operating cash flow, which improved 389% year-over-year. Similarly, free cash flow boosted by 1,088% year-over-year.

Firstly, there’s an impressive 80% growth in deals exceeding $1 million, surpassing expectations. The ability to integrate various cloud services like Tableau, Slack, MuleSoft, Data Cloud, Sales Cloud, and Service Cloud into comprehensive solutions is a considerable achievement. Customer interest is resurgent in such integrated offerings after a downturn in fiscal 2023.

Secondly, a new product, Data Cloud, is introduced, a major source of client engagement. The company gained 1K new Data Cloud customers in Q3. In particular, the product has a solid positive reception in Japan (the second-largest software market).

Thirdly, the introduction of Einstein GPT Copilots, a product that wasn’t even imagined in fiscal 2023. This AI product has a combination of predictive and generative capabilities. It has seen rapid adoption, with 17% of Fortune 100 companies becoming customers within a short time.

Finally, Einstein’s contribution suggests the scale and reliability of Salesforce’s AI CRM platform. This includes over 49 billion product recommendations and over 53 billion marketing messages sent via the Marketing Cloud. Therefore, the large deals, Data Cloud, and Einstein GPT Copilots are fundamental drivers for the company’s growth. All in all, it’s one of those AI stocks to dominate.

Adobe (ADBE)

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Adobe’s (NASDAQ:ADBE) product momentum and top-line growth signifies the growth engine. For instance, in Q4 2023, the Digital Experience business achieved $1.27 billion, with subscription revenue at $1.12 billion, representing a considerable 12% year-over-year growth.

A strong momentum is also noted with the Adobe Experience Platform (AEP) and native applications. This includes real-time CDP, Adobe Journey Optimizer, and customer journey analytics. AEP had its first $100 million quarter of net new business in Q4. It has exited 2023 with a greater than $700 million annualized book of business.

Additionally, the recent release of Adobe GenStudio as an end-to-end solution brings together applications across Creative Cloud, Express, and Experience Cloud with Firefly generative AI. There is notable interest from mega brands like Henkel (OTCMKTS:HENKY), Pepsi (NASDAQ:PEP), and Verizon (NYSE:VZ), along with agencies like Publicis, Omnicom, and Havas, highlighting the solution’s market positioning.

Furthermore, key customer wins include Alshaya, Coca-Cola (NYSE:KO), EY, IBM (NYSE:IBM), Marriott (NASDAQ:MAR), Riyadh Air, Santander Brasil (NYSE:BSBR), Sony (NYSE:SONY), Southern Graphics, Unilever (NYSE:UL), and Vanguard. Hence, Adobe’s recognition in over 25 categories in Gartner’s (NYSE:IT) Critical Capabilities for Digital Experience Platforms confirms its leadership in the space.

At its core, the annual recurring revenue of Adobe’s Digital Media business exited fiscal 2023 with over $15 billion. Looking forward, the conservative outlook derives confidence in the value-growth potential. The guidance considers subscription pricing increases and generative AI features that attract new subscribers.

Lastly, Adobe’s focus on delivering more value contributes significantly to digital media growth. Hence, the mix of subscription plans, including Creative Cloud All Apps, Single Apps, Stock, Express, and Firefly, drives top-line diversification. It’s one of those AI stocks to dominate.

On the date of publication, Yiannis Zourmpanos 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.

Yiannis Zourmpanos is the founder of Yiazou Capital Research, a stock-market research platform designed to elevate the due diligence process through in-depth business analysis.


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