Top 5 Artificial Intelligence Stocks Poised for Rapid Growth

Over the last year, the rise of Artificial Intelligence (AI) has become one of the most prominent subjects in mainstream media. This surge in attention is well-founded, as AI technology poses a formidable threat to various industries and holds the promise of explosive growth.

Consequently, investors are closely monitoring AI-related stocks, hoping to capitalize on this potent megatrend. The implementation and utilization of AI across diverse sectors, including healthcare, finance, manufacturing, and transportation, have unveiled new revenue streams previously unexplored.

Industry experts are now predicting remarkable growth for the AI sector, with a projected compound annual growth rate of 38.1% between 2022 and 2030. During this period, the market is anticipated to reach a staggering value of US $1.8 trillion.

For investors seeking to harness the potential of this megatrend in the coming months, and possibly years, the key lies in identifying companies with distinctive AI technology or applications that confer a clear advantage in their respective fields.

As with any rapidly expanding industry, not all AI stocks will fulfill the early promises. Therefore, it is critical to examine each potential investment carefully, making well-informed decisions that align with your financial circumstances and acceptable risk threshold.

To that end, here are five AI stocks that currently appear primed for significant upside potential in the foreseeable future and warrant a closer look:

Top AI Stock #1 – Snowflake Inc. (NYSE: SNOW)

Snowflake Inc. (NYSE: SNOW) provides a cloud-based data platform in the United States and internationally.

The company’s platform offers Data Cloud, which enables customers to consolidate data into a single source of truth to drive meaningful business insights, build data-driven applications, and share data. Its platform is used by various organizations of sizes in a range of industries. 

Snowflake’s data cloud makes the company an attractive potential utility-like operator within the AI space. Companies could pay for access and usage of data needed to build and train their AI applications.

Data Cloud was designed from the ground up to support machine learning and AI-driven data science applications. In addition, the platform allows users to build their own machine learning models and bring AI into their own businesses.

Snowflake boasts over 8,100 customers, a number that includes 639 client companies from the Forbes Global 2000 list, as well as 402 customers generating more than $1 million in product revenue over the trailing 12-month period. Snowflake’s data cloud sees over 3.3 billion daily queries, and the firm has a work backlog – the remaining performance obligations – totaling over $3.5 billion.

In the past several quarters, Snowflake has seen both its revenue and EPS totals trend upwards. The last reported quarter, Q2 of fiscal year 2024 (July quarter), showed a top line of $674 million, a figure that marked an impressive 35.5% year-over-year gain and beat the forecast by $11.7 million.

Independent analysts have rated the company’s shares a “moderate buy” and established a consensus target price of $190.55, representing a forecasted upside of 15% from its price of $165.39 as of this writing.

Top AI Stock #2 – Palantir Technologies Inc. (NYSE: PLTR)

Palantir Technologies Inc. (NYSE: PLTR) builds and deploys software platforms for the intelligence community in the United States to assist in counterterrorism investigations and operations.

The company provides Palantir Gotham, a software platform which enables users to identify patterns hidden deep within datasets, ranging from signals intelligence sources to reports from confidential informants, as well as facilitates the handoff between analysts and operational users, helping operators plan and execute real-world responses to threats that have been identified within the platform.

It also offers Palantir Foundry, a platform that transforms the ways organizations operate by creating a central operating system for their data; and allows individual users to integrate and analyze the data they need in one place. In addition, it provides Palantir Apollo, a software that enables customers to deploy their own software virtually in any environment.

Top AI Stock #3 – UiPath Inc. (NYSE: PATH)

UiPath Inc. (NYSE: PATH) is on a mission to uplevel knowledge work so more people can work more creatively, collaboratively, and strategically.

The company’s AI-powered UiPath Business Automation Platform combines the leading robotic process automation (RPA) solution with a full suite of capabilities to understand, automate, and operate end-to-end processes, offering unprecedented time-to-value.

UiPath plugs its robotic process automation (RPA) tools into an organization’s software to automate repetitive tasks like entering data, processing invoices, managing inventories, onboarding customers, and sending out mass emails.

UiPath’s revenue soared 81% in fiscal 2021 (which ended in January 2021), grew another 47% in fiscal 2022…and rose again by 19% in fiscal 2023.

UiPath’s product has remained popular, even as some businesses tighten their budgets. In the first quarter of fiscal year 2024 (ended April 30), UiPath’s annual recurring revenue (ARR) rose 28% to $1.25 billion. Large customers have also grown rapidly, as clients spending more than $100,000 annually rose from 1,574 to 1,858.

Independent analysts have established a consensus price target of $19.84 for UiPath, Inc., which resents a forecasted upside of 10% from its current price of $18.04 as of this writing.

Top AI Stock #4 – Baidu, Inc. (Nasdaq: BIDU)

Baidu, Inc. (Nasdaq: BIDU) offers internet search services in China. It operates through Baidu Core and iQIYI segments.

The company offers Baidu App to access search, feed, and other services using mobile devices; Baidu Search to access its search and other services; Baidu Feed that provides users with personalized timeline based on their demographics and interests; Baidu Health that helps users to find the doctor and hospital for healthcare needs; and Haokan, a short video app.

It also provides Baidu Knows, an online community where users can ask questions to other users; Baidu Wiki; Baidu Experience; Baidu Post; Baidu Wenku; Baidu Maps, a voice-enabled mobile app that provides travel-related services; Baidu Drive; Baijiahao; and DuerOS, a smart assistant platform.

Baidu may now get a fresh tailwind from the sooner-than-expected launch of its ChatGPT-like Ernie Bot.

The company made its artificial intelligence service available to the public on August 31, capping a two-week surge in its U.S.-listed stock. While China approved several firms’ services, Ernie Bot quickly attracted 1 million users and surged to the top of the nation’s app rankings.

Analysts are bullish on the potential for Baidu; 14 independent analysts have issued “buy” ratings on the company’s shares along with one hold rating and no sell ratings. According to these analysts’ consensus price target of $187.06, Baidu has a forecasted upside of 36% from its current price of $137.55.

Top AI Stock #5 – Broadcom Inc. (Nasdaq: AVGO)

Broadcom Inc. (Nasdaq: AVGO) is a California-based semiconductor and computer software company with a thriving AI business. It has integrated AI in its set-top boxes and broadband communications devices.

Broadcom Inc. also unveiled its new chip for wiring together supercomputers for AI in April.

Broadcom Inc. designs, develops, and supplies various semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products worldwide.

The company operates in two segments, Semiconductor Solutions and Infrastructure Software.

It provides set-top box system-on-chips (SoCs); cable, digital subscriber line, and passive optical networking central office/consumer premise equipment SoCs; wireless local area network access point SoCs; Ethernet switching and routing custom silicon solutions; embedded processors and controllers; serializer/deserializer application specific integrated circuits; optical and copper, and physical layer devices; and fiber optic components and RF semiconductor devices.