Artificial intelligence (AI) is the current buzzword in the tech world, driving the stock market and prompting companies of all sizes to introduce new AI features. These features are not only monetizing their products but also helping them gain a larger market share. The AI market shows no signs of slowing down.
Bloomberg Intelligence predicts that generative AI will grow at a compound annual growth rate (CAGR) of 42% over the next decade, becoming a $1.3 trillion industry globally. AI has the potential to revolutionize society, changing everything from our work and social interactions to the entertainment we consume.
Given the high stakes, it’s no surprise that both established companies and start-ups are going all out to gain an edge in the AI race. Here are three AI stocks that could turn a $10,000 investment into $1 million by February 2024.
AI chipmaker Nvidia (NASDAQ:NVDA) is set to report its latest earnings on Feb. 21, and the anticipation is palpable. Forecasts predict earnings per share (EPS) of $4.59, a staggering 700% increase from the same quarter last year. Some analysts are dubbing the upcoming announcement as a pivotal moment for the stock market. Deutsche Bank noted to its clients, “The most important event of the week may be Nvidia’s earnings…this will be very important for sentiment.”
NVDA stock has already seen a 50% increase this year, leading to a 12-month gain of 252%. Data from options analytics service ORATS suggests that Nvidia’s shares could rise a further 11% or more following its latest quarterly results. Nvidia’s market capitalization now stands at $1.8 trillion, surpassing both Amazon (NASDAQ:AMZN) and Google-parent company Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL).
Next, we have Symbotic (NASDAQ:SYM), a lesser-known AI company based in Massachusetts. Unlike Nvidia, Symbotic is not a microchip or semiconductor maker. Instead, it specializes in robotics warehouse automation, building and operating robots and automated systems for warehouses using proprietary AI software. Despite a pullback since the start of this year, SYM stock has risen 155% in the last 12 months and 312% since its public debut in 2022.
Recently, Symbotic reported earnings that exceeded its own forecasts, announcing $14 million in adjusted EBITDA on revenue of $368 million. This represented a 79% increase in sales from the previous year. Symbotic had predicted earnings of $11 million on sales of $350 million. This marks the company’s second consecutive quarter of adjusted profitability, a positive sign for the future. If Symbotic continues to report strong sales and profits, its stock is likely to rally again soon.
Lastly, Alphabet remains a leader in the global AI race. The company recently rebranded its main AI chatbot as “Gemini,” replacing the former name “Bard,” to align with its large-language learning models used to train AI applications. Alongside the rebranding, Alphabet launched a new mobile version of its chatbot and a premium paid-subscription version called “Gemini Advanced,” priced at $19.99 a month. This includes two terabytes of cloud storage that can be shared among family members.
Alphabet is integrating its AI capabilities across its suite of office products, including Gmail, Docs, Slides, Sheets, and Meet. GOOGL stock has gained 53% in the last 12 months. A $10,000 investment in Alphabet’s stock at its 2004 initial public offering (IPO) would be worth more than $300,000 today.
As of the date of publication, I hold long positions in NVDA and GOOGL. The opinions expressed in this article are my own and are subject to the publishing guidelines of the website.
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