The U.S. economy is on a positive trajectory under the Biden administration’s high-pressure approach. The country is seeing robust job growth and a historically strong labor market. January brought an unexpected surge of 353,000 new jobs, with 1.4 job opportunities available for every unemployed person, signaling a remarkable revival with manageable inflation levels and flourishing markets. Despite potential challenges from atypical economic cycles and rising costs, the momentum suggests a promising future for the U.S. economy. Expect ongoing innovation in the coming years, driven by these leading AI stocks — capitalize on this trend.
UiPath (PATH)
First on our list of AI stocks is UiPath (NYSE:PATH), a software company specializing in robotic process automation software.
PATH stock is up 6.85% YTD, with eight analysts maintaining a “buy” rating and targeting a price of $26.88 from a current price of $25.50.
UiPath financials are holding up, as revenue in 2023 was up 18.64%, from $892 million in 2022 to $1,059 million. This demonstrates the company’s profitability, indicating healthy growth. Although the firm’s cash and short-term investments have slowed down, the company still maintains solid cash and s-t investments over a total assets ratio of 64.23%.
UiPath competes in the software industry, which has a projected CAGR of 11.90%, predicted to reach $15.86 billion in value by 2030. Primarily, growth is driven by quick developments in technology. These developments include artificial intelligence, machine learning and the Internet of Things. Since they can improve the efficiency and speed of existing technologies, such technologies will allow more innovations in software, resulting in overall sector growth.
A key catalyst for UiPath is its understanding and usage of AI to enhance its products. An example of this is the company’s recently released e-book, which highlights its knowledge on the subject of AI and automation trends. Furthermore, the company has illustrated its ability to implement its solutions, as its Clipboard AI was named one of TIME’s Best Inventions of 2023.
Because of its strong knowledge of artificial intelligence, UiPath is a must-have option in AI stocks.
Palantir Technologies (PLTR)
Palantir Technologies (NYSE:PLTR) is a software company specializing in software platforms for data analytics. It has reached a valuation of $23.61, 184.12% more than last year.
Palantir Technologies’ financials have been outstanding on every level. Revenue growth YOY of 16.75% was 246.89% more than the sector median. EBIT growth was also lofty at 34.11%, or 394.12% more than the sector median, and gross profit margin was through the roof at 80.62%. These metrics differentiate PLTR from the competition by showing potential investors the story of a large successful company, one that will continue growing while turning a profit.
PLTR is emerging in AI via its AIP Logic platform, which allows it to leverage its large language model data without having to use complex computer coding. As the market trends up to AI, this platform should be very profitable. The AI market is still in its prime and so PLTR’s investment in it is bound to pay off.
Qualcomm (QCOM)
Qualcomm (NASDAQ:QCOM) is an American multinational company with operations in semiconducting, software and wireless technology services. It has a valuation of $151.00, 15.68% more than last year.
Qualcomm’s recent financials were impressive, at $35.82 billion with an EBIT Margin of 24.81% YoY, 420.77% more than the sector. Gross profit margin was also solid, at 14.63% greater than the sector. Levered FCF Growth was 110.22% which is nearly 519.95% more than the sector median. Price / Sales and EV / Sales were 56.23% and 54.11% more than the median respectively, displaying that valuation was monumental. Overall, these metrics paint the picture of a company with solid rising financials and a bright long and short-term future by discussing both short- and long-term profit projections.
Qualcomm is a major researcher and innovator in the AI field, adopting a policy of pushing it to its core capabilities. AI is trending up with the Global AI Market Size which is expected to grow 37% every year from 2023 to 2030. With all eyes set on its capabilities if QCOM does make a breakthrough regarding AI its revenue and eventually its stock price will appreciate. This innovation regarding AI is sure to pay dividends and it should be no different for QCOM. AI pairing with substantial financials is why this company has earned a “buy” rating with benefits dated as soon as February.
On the date of publication, Michael Que 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.
The researchers contributing to this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
