Amid the rising recession fears and global economic tensions, the past week has been rough for the stock market. However, smart investors look at this as an opportunity to load up on high-quality stocks trading at a discount. The first thing that comes to mind is tech stocks and artificial intelligence has been a buzzword of the year. With companies pouring billions into the AI space, it looks like the industry will keep expanding in the years to come. Some of the best-performing stocks for the first half of 2024 were AI stocks including Nvidia (NASDAQ: NVDA).
It has been the biggest beneficiary of the AI boom and reported several quarters of solid financial gains. However, it is time investors looked beyond Nvidia and invested in stocks that show a strong upside potential. If you want to join the AI hype, here are three stocks other than Nvidia that can grow your money. While Nvidia is an industry leader, these three companies aren’t far behind and are making their presence felt amidst the rising competition in the AI space. Let’s take a look at the AI stocks to buy.
Palantir Technologies (PLTR)
One of the best AI companies to invest in, Palantir Technologies (NYSE:PLTR) is two decades old and was once known for catering to government clients. The company has built a heavily diversified business today and has seen a steady rise in commercial clients.
Palantir invested in AI and built an Artificial Intelligence Platform (AIP) which was offered to clients through boot camps. It completed hundreds of boot camps and converted the leads into clients.
For the second quarter, Palantir saw a 27% year-over-year jump in revenue to $678 million and the customers increased by 41% YOY. It closed 27 deals worth over $10 million and the commercial clients jumped 83% YOY.
This is an impressive feat by the company which also continues to attract deals from the Government. The EPS grew 500% YOY to $0.06. Palantir has set a solid momentum for the second half of the year and I believe it could become an industry leader. It has the liquidity to keep investing in the platform and it also has a product that caters to the changing needs of the customers. A diversified business, solid fundamentals, and an impressive history make Palantir a compelling buy.
Up 60% year-to-date, PLTR stock is exchanging hands for $26 and I believe it can hit $40 next year. Getting in early on the AI ride will ensure steady returns over the years.
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Oracle (ORCL)
Oracle (NYSE: ORCL) is a legacy business with a solid presence across multiple industries. The company has seen several market ups and downs and has managed to thrive through them. Up 23% YTD, Oracle stock is trading for $128 today and is on a solid momentum.
The company has partnerships with Nvidia and Palantir which has helped it expand market share. Oracle is already working on building 100 data centers and as companies transition to cloud, the demand for its services will be on the rise.
The company recently partnered with OpenAI for the use of its cloud infrastructure to run AI applications. The growing popularity of OpenAI has brought Oracle to the limelight and several companies may follow the same steps and choose to partner with Oracle for AI tasks.
In the recently announced fourth-quarter results, Oracle saw a 3% rise in revenue to $14.3 billion with a 42% YOY jump in cloud infrastructure revenue. Notably, its outstanding performance obligations stood at $98 billion, up 44% YOY. The company will convert this into revenue in the coming quarters and we could see similar results.
Considering Oracle’s strong performance, steady growth and an impressive clientele, it is one of the best AI stocks to hold on to.
ServiceNow (NOW)
ServiceNow (NYSE: NOW), a cloud computing platform helps manage complex workflows for organizations. It offers the right tools and features which make it easier for organizations to run AI applications. Up 15% YTD, the stock is exchanging hands for $792 and since it is priced at a premium, it could be a stock split candidate.
The company reported impressive second-quarter results with an EPS of $3.13 and a revenue of $2.63 billion. It beat expectations and as companies continue to pour money into AI, ServiceNow will continue to benefit. Its subscription revenue jumped 23% YOY.
The company closed 14 contracts worth more than $5 million in the quarter and it has a partnership with Nvidia which opens new opportunities for the business.
ServiceNow sets itself apart from the industry with its strong subscription rate, it enjoys a renewal rate of 98% which is impressive. This shows that consumers are satisfied with its products and services and with a high subscription rate, the company has nothing to worry about steady revenue growth.
The company has also expanded in the Middle East and will be launching ServiceNow UAE cloud to offer its services in the Middle East.
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