Unless you’ve been living under a rock, you’ve probably noticed how fast the world is changing around us. Every single aspect of our lives is getting disrupted.
And at the heart of it all is technology.
Our daily lives, our homes, our jobs are all going through a process of computerization, automation, and technological adoption. Every day different technologies are becoming an increasing part of our life. And the companies behind them are growing at breakneck speeds, eating up market share, and becoming multibillion-dollar and even trillion-dollar organizations virtually overnight.
For example…
- In the past 10 years, Netflix, Inc. (NFLX) has climbed as much as 2,000% because it changed how we consume movies and TV shows.
- com, Inc. (AMZN) has soared in the past decade by taking over online retail.
- Meta Platforms, Inc. (META), which controls companies like Facebook and Instagram, has taken over advertising.
- Uber Technologies, Inc. (UBER) revolutionized the taxi industry.
Meanwhile… these new businesses and technologies are wreaking havoc on the established infrastructure. Even in a year like 2022, when tech stocks fell out of favor, these businesses continued to dominate, even earning record amounts of revenue.
History shows us over and over again that if a revolutionary technology improves our lives, or makes things cheaper, or more efficient – then the adoption of that technology spreads like wildfire no matter what.
With each passing day, technology is accelerating at an incredible rate, regardless of what’s happening in the rest of the world.
And now, we’ve reached a new technological tipping point, and the vast majority of Americans are not paying close attention to the massive disruption headed our way.
The way we work… the way we travel… the way we shop… how we communicate with each other, it’s all dramatically different than just a few years ago.
And this level of change is only accelerating. It’s happening in every sector of the economy. It’s creating and destroying businesses at an incredible rate.
In fact, it’s literally splitting the stock market in two – winners on one side, losers on the other.
This phenomenon is called the Technochasm. Essentially, technology is splitting the world in two and creating a deep chasm, or divide, between the 1% and the other 99%.
At the heart of the Technochasm is exponential progress… and how it impacts innovation and the rate of adaption. Unfortunately, millions of employees, entrepreneurs, CEOs, and investors are getting caught off guard. They simply don’t understand how the Technochasm and exponential progress impact their industries, no matter how large those effects are.
Those on the right side of this force are building wealth faster than they’d ever dreamed.
Those on the wrong side are already getting left behind.
This Technochasm – this divide between “haves” and “have nots” – is driven by the ever-increasing speed, power, and progress of technology.
And now the artificial intelligence (AI) Revolution is dumping gasoline and lighting a match on the Technochasm.
If you thought the blistering pace at which Netflix demolished Blockbuster was fast, or the pace at which Amazon demolished many brick-and-mortar retailers was fast, you haven’t seen anything yet.
However, thanks to the rapid development of AI, there will be dozens of opportunities every year to make 10 times your money or more. The key is knowing how to identify one of these innovative companies before they fall under Wall Street’s radar.
I want you set on the right side of this Technochasm divide. In order to do so, I used my Portfolio Grader to scan more than 6,000 stocks – and I found the top three AI stocks that are primed to benefit from this AI Revolution.
Buy These 3 AI Stocks Today
Let’s dive in…
Top AI Stock No. 1: Extreme Networks
Based in San Jose, California, Extreme Networks, Inc. (EXTR) uncomplicates network connections by providing affordable and efficient connectivity. The company put itself at the forefront of digital transformation by building the first Gigabit Ethernet switch and developing the only fourth-generation cloud architecture. Extreme Networks also has armed itself with more than 1,100 patents globally.
Primarily, Extreme Networks provides software-driven networking solutions that enable universities, global corporations, sports leagues, healthcare facilities, resorts and even small towns to connect and operate more efficiently. To ensure that networks operate effectively, Extreme Networks utilizes AI, machine learning, automation and analytics.
Extreme boasts that more than 50,000 customers rely on its solution and services, and it does business in more than 80 countries around the world. A few of the company’s customers include ArcelorMittal, Baylor University, the city of Milwaukee, Eldorado Resources, Lincoln University, Manchester United, NASCAR, New Jersey Transit, the NFL, the NHL and Novant Health.
So, not too surprising, Extreme Networks recently posted robust results for its fourth quarter and fiscal year 2023. During the fourth quarter, revenue rose 31% year-over-year to $363.9 million and earnings jumped 120% year-over-year to $0.33 per share. The consensus estimate called for earnings of $0.31 per share on $343.53 million in revenue.
For fiscal year 2023, Extreme reported earnings of $1.09 per share and revenue of $1.3 billion. That translated to 41.6% annual earnings growth and 18% annual revenue growth. Analysts expected full-year earnings of $1.08 per share and revenue of $1.29 billion.
This marks our second consecutive year of double-digit growth,” company management commented. “We’re outgrowing our competitors, gaining share, and winning new logos, which helped drive more than 30% growth in the value of deals over $1 million.”
Looking forward to fiscal year 2024, Extreme Networks remains positive that it will be another great year. For the first quarter, it expects total revenue between $342 million and $352 million and earnings per share (EPS) between $0.28 and $0.33. That compares to revenue of $282.9 million and earnings of $0.20 per share in the first quarter of 2023.
Top AI Stock No. 2: Lattice Semiconductor
With operations around the world, Lattice Semiconductor Corporation (LSCC) is a leading provider of field-programmable gate arrays, or FPGAs. If you’re not familiar with FPGAs, let me explain. An FPGA is an integrated circuit (IC) that is more flexible than other custom or semi-custom ICs in that it can be programmed and reprogrammed with the right software.
Developers can use FPGAs to program and reprogram a device to perform practically any function – and they can be used everywhere. Lattice’s FPGAs are used in several applications in a number of markets, including automotive, communications, computing and consumer. The company’s FPGAs are particularly popular for artificial intelligence, machine learning and edge computing, as well as 5G, factory automation and robotics.
During its fiscal year 2022, the Portland, Oregon, area-based company introduced Lattice Avant, a power-efficient FPGA platform that doubled the firm’s addressable market and expanded its product portfolio. The company also achieved full-year revenue of $660.36 million, or 28.1% annual revenue growth. Earnings grew 65% year-over-year to $1.75 per share.
For its first quarter in fiscal year 2023, revenue rose 22.5% year-over-year to $184.31 million, while earnings increased 37.8% year-over-year to $0.51 per share. Analysts expected earnings of $0.50 per share on $180.01 million in revenue.
The company also posted better-than-expected earnings and revenue results for its second quarter. Second-quarter adjusted earnings rose 23.8% year-over-year to $0.52 per share, while revenue increased 17.8% year-over-year to $190.08 million. The analyst community expected adjusted earnings of $0.51 per share on $188.04 million in revenue.
Looking ahead to the third quarter, LSCC expects revenue between $187 million and $197 million, which compares to $166.28 million in the third quarter of 2022. The outlook is in line with analysts’ current projections for $192.18 million.
Top AI Stock No. 3: Opera
For the past 25 years, Opera Ltd. (OPRA) has enhanced online experiences throughout the world. The Norway-based company offers web browsers for all devices (laptops, mobile, etc.), as well as AI-driven news platforms, shipping solutions and gaming products. Opera boasts an active user base of more than 350 million.
Company management recently noted that it’s integrating AI services into its browsers, with an AI assistant aimed to help make browsing more efficient. In fact, Opera partnered with OpenAI and introduced the first browser with integrated generative AI services in the first quarter. And the $2.3 billion market-cap company has already experienced demand for its AI services, as early adopters take advantage of the features.
Thanks to strong demand for both search and advertising, Opera achieved its ninth-straight quarter of more than 20% revenue growth. In the first quarter, revenue rose 21.6% year-over-year to $87.05 million, and earnings surged from a loss to $15.48 million. Earnings soared to $0.17 per share, compared to a loss of $0.08 per share in the first quarter of 2022. Analysts expected $0.23 per share, so the stock pulled back following the earnings release.
This dip is our buying opportunity.
Opera is transitioning from negative earnings to positive earnings, and the company increased its revenue guidance for 2023. Opera expects full-year revenue between $373 million and $390 million. For the second quarter, the company also anticipates revenue between $92 million and $94 million, which is above analysts’ estimates.
In the wake of the strong outlook, analysts have increased second-quarter earnings estimates. Second-quarter earnings are now forecast to jump to $0.16 per share, compared to a $0.03 per-share loss in the same quarter a year ago.
Conclusion
Make no mistake about it… AI is the fastest-evolving tech in history, and 2023 will go down as the year that everything changed.
And if you want to be in the “haves” and not the “have nots” that the Technochasm is creating amid the AI Revolution, then consider the three AI stocks I shared with you today: Extreme Networks, Inc. (EXTR), Lattice Semiconductor Corporation (LSCC), and Opera Ltd. (OPRA). They are deep in the AI space and could prosper immensely as the AI Revolution continues to gain momentum.
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Sincerely,
Louis Navellier
