There’s plenty to be excited about regarding machine learning (ML). As a subset of the burgeoning artificial intelligence boom, ML is used for a core facet of generative AI in which algorithms can use existing data to learn without human intervention.
Studying structured and unstructured datasets empowers machine learning to gain a contextual understanding of information and use it to become more proficient at repetitive tasks, interacting with humans and making decisions.
We can also see signs of an industry ripe for growth. Forecasts suggest that the global machine-learning market will rally to a valuation of $209.91 billion by 2029, representing a compound annual growth rate of 38.8%. In addition, the machine learning platforms market will reach $31.36 billion by 2028.
This can offer a significant investment opportunity for individuals seeking to build a tech-focused portfolio. The generative AI boom shows no signs of slowing down. Still, investors have been mostly receptive to technology like ChatGPT and the large-language models (LLMs) that have effectively generated content.
However, ML will be a driving force in the evolution of the industry, which makes the following machine learning stocks strong options to consider.
Snowflake (SNOW)
One of the more curious stocks on this list is Snowflake (NYSE:SNOW), a cloud computing firm specializing in training machine learning algorithms.
Although the industry is forecasted to maintain a major growth rate, Snowflake has struggled to maintain the momentum the stock created before the generative AI boom in late 2021. SNOW ended Q2 2024 65.55% adrift from its former highs.
Despite this, there’s plenty to be excited about for Snowflake’s future. The firm’s first quarter 2024 earnings report showed a 34% revenue increase to $789.6 million compared to last year. SNOW has also managed to maintain a positive free cash flow for many quarters.
Snowflake also appears dead set on growth. In May 2024, it acquired TruEra’s AI observability platform to accelerate its ability to develop ML platforms for customers.
This suggests that the firm’s long-term prospects far outweigh its short-term volatility, and picking up SNOW today following a 28.57% decline in the first half of 2024 could be a great entry point ahead of future growth.
Palantir (PAL)
The beauty of Palantir (NYSE:PAL) is that it’s a stock that offers a little bit of everything for investors.
As a software firm that develops solutions for large enterprises, Palantir has experienced significant growth in recent years thanks to its commitment to cloud and AI innovation, with machine learning close to its core operations.
Palantir’s machine learning solutions are focused on equipping businesses with a better way of gaining insights into their extensive digital data. This challenge will only increase as the AI boom and digital transformation continue to gather pace.
The stock’s fundamentals are pretty special, too. Despite mixed Q1 2024 results that showed earnings beating expectations for the quarter, full-year guidance was lower than expected. Despite this, the company has amassed significant government contracts to develop its technology, including a $178 million contract with the US Army to develop field-deployable sensor stations.
Finally, Palantir also enjoys a status as a meme stock, with a significant level of retail interest in the firm. This has helped sustain a 52.77% rally for PAL over the first half of 2024 and points to further outperformance.
Nvidia (NVDA)
No list covering machine learning would be complete without a mention of the undisputed star of the AI boom on Wall Street, Nvidia (NASDAQ:NVDA).
Nvidia has retained a close focus on machine learning and, in particular, its deep learning subset. The firm has developed its own AI platform for developers with GPU-accelerated deep learning frameworks to help create digital neural networks for businesses without prior GPU programming.
There’s also the matter of the stock itself. NVDA’s growth after the generative AI boom has been nothing short of sensational. In May 2023, Nvidia briefly entered Wall Street’s exclusive $1 trillion market capitalization club. By June 2024, the stock reached a value of $3 trillion.
Between Q1 2020 and Q2 2024, NVDA rallied by 1993.9% and is likely to continue growing alongside the wider generative AI landscape, which itself has been forecasted to become a $1.3 trillion industry by 2032.
Nvidia has been busy cementing its status as a market leader in powering the AI boom, and with this in mind, investors can expect a steady flow of innovations directly focused on machine learning innovations in the future.
On the date of publication, Dmytro Spilka 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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
