While there are plenty to choose from the best AI stocks hold next-generation potential.
AI is a rapidly evolving industry with plenty of wiggle room for companies to carve out a niche. Experts have suggested that most companies will use AI by 2030, adding over $13 trillion to the world’s economy.
The long-term case for investing in AI stocks remains as compelling as ever, especially with the proliferation of tech during the pandemic.
Moreover, with stocks trading at multi-year lows, many of the AI stocks trading at frothy valuations are now up for grabs. Hence, here are seven of the best AI stocks you should invest in at this time.
| SPLK | Splunk | $88.15 |
| PATH | UiPath | $13.84 |
| UPST | Upstart | $26.65 |
| TWLO | Twilio | $67.90 |
| DUOT | Duos Technologies Group | $4.27 |
| NVDA | Nvidia | $137.14 |
| IDEX | Ideanomics | $.55 |
Splunk (SPLK)
Splunk (NASDAQ:SPLK) is an AI specialist, enabling its clients to make sense of mountains of data.
Its Big Data solutions have been a hit with several of the top firms across the globe, which has enabled it to post double-digit growth across its top line over the past several years.
The enterprise is in the midst of a transition toward a recurring cloud-based services model. The transformation will help boost margins significantly in the long run and help Splunk turn a profit soon.
Splunk serves 90% of the Fortune 100 companies, while clients spending over $1 million annually hit an all-time high of 723 during the quarter. It represents a massive 24% jump from the prior-year period.
Its cloud services continue to drive growth, with an incredible 50% improvement in sales during the second quarter. Hence, the transition is already paying dividends in a big way for the business.
UiPath (PATH)
UiPath (NYSE:PATH) has established itself as a leader in an evolving secular growth sector. The robotic process automation (RPA) provider allows various companies to automate their routine activities through AI effectively.
Since listing on the stock exchange in April last year, PATH stock has endured a rough start.
The business remains largely in stable condition with its annualized renewal run rate, a metric showing its recurring revenues rose an incredible 50%.
Moreover, its net retention rates have stayed above the 100% threshold. According to Grand View Research, the global RPA industry is set to make a whopping $23.9 billion in total sales by 2030. Attaining just a fraction of that market could have UiPath raking in billions in sales each year, making it one of the best AI stocks out there now.
Upstart (UPST)
Upstart (NASDAQ:UPST) is an AI-based lending business that gained immense traction last year.
Naturally, its business model was a massive hit in 2021, when the economy was flushed with stimulus money. The current situation, though, has changed completely with the rampant increase in interest rates. Lenders and loan buyers taking on greater risk are looking for higher profit margins on their loans.
The firm couldn’t find buyers for its loans and was compelled to originate loans at unprofitable prices. Upstart decided to hold portions of these loans instead of selling them at a loss. Hence, the business can hardly rely on buyers in such unprecedented times.
Sensing a need for change, management is looking to change its business model and provide consistent funding regardless of the credit market cycles. Combining that with the robustness of its algorithms, UPST could significantly expand its business over the long term.
Twilio (TWLO)
Twilio (NYSE:TWLO) offers services as a cloud-based AI customer engagement solutions provider.
Its clients can use its platform to embed various communication features into mobile applications and websites. Additionally, it continues to add to its product offerings, dishing out new products such as Flex, which builds cloud-based centers for firms.
The closure of the Flex deal helped Twilio generate an incredible 41% jump in sales during the second quarter. The results came in significantly higher compared to management expectations. What’s heartening is that it was able to pull off such results despite the decelerating economic growth, foreign currency headwinds, and other headwinds.
The stellar results are attributable to Twilio’s aggressive merger and acquisitions strategy and the need for customers to update their communication tools for the cloud sector. Moreover, with a massive cash balance of over $4.4 billion, it can continue to expand its business and serve more customers rapidly.
Duos Technologies Group (DUOT)
Duos Technologies Group (NASDAQ:DUOT) is a budding AI specialist developing algorithms with utility across multiple industries.
Its remarkably accurate algorithms have immense long-term potential in many of the areas highlighted by its management, including railcars, trucks, and aircraft inspection portals, along with 5G Edge data centers.
Moreover, the company is undergoing a transformation of sorts under its new CEO, who is focusing on transitioning the business towards a recurring business model.
Additionally, the goal is to improve the supply chain, organization, core capabilities and talent. Its massive order backlog is a testament to its long-term potential.
Perhaps a near-term catalyst for the firm is its railcars inspection portal that can automatically detect problems to see if there’s anything serious with a railcar at speed. It recently secured a $9 million contract from passenger railroad service Amtrak.
Nvidia (NVDA)
With the proliferation of AI-generated datasets, the need for powerful hardware is imperative. Hence, GPU giants such as Nvidia (NASDAQ:NVDA) are excellent long-term AI plays.
The expansion in AI has spurred incredible growth in the data center segment, software development kits and other segments. Additionally, the business has been a growth juggernaut over the years, with top-line growth averaging in at around 34.6%.
Its key segments have all posted double-digit growth in the past few years and have held up well despite the market headwinds. Also, it was also looking to carve out a niche in the metaverse.
It is positioning itself as a top player in the field and is likely to succeed due to its high-end graphics and AI-related expertise. Therefore, NVIDIA is an AI stock that can’t be missed with its fingers in several AI-related verticals.
Ideanomics (IDEX)
Ideanomics (NASDAQ:IDEX) operates an electric vehicle (EV) and financial services business.
It’s made up of five companies that generate revenues from a fully electric car ecosystem that covers battery sales to financing, leasing, and insurance. In the past few quarters, it has witnessed a healthy uptick in sales, which creates a positive long-term outlook for the business.
Last year, it transformed itself through various acquisitions that enabled it to pursue its vision of becoming a fully-integrated provider of commercial electrification solutions. Hence, it has significantly expanded its competencies in the different EV businesses it operates.
These business areas all offer an enormous growth runway ahead, with multi-billion dollar addressable markets. In its most recent quarter, the company posted a dumbfounding $114.08 million in sales, representing over 326% growth from the same period last year.
On the date of publication, Muslim Farooque 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
