What a stunning year Nvidia (NASDAQ:NVDA) has had. The share price has risen by $312, translating to a 218% gain year-to-date.
Of course, most investors never had a chance to jump on board the trend. The stock simply bolted from the gates at the start of the year and never pulled back. For investors hopeful of getting in on the action, hope was quashed early in the year when Stanley Druckenmiller, who owned shares prior to the run-up, stated that this may be a new normal, and a pullback may not be on the cards. History shows that he couldn’t have been more right.
So let’s assume you missed out on Nvidia stock, what are the next stocks to get an AI boost similar to Jensen Huang’s company?
Stock That Could Be The Next Nvidia?
C3.ai is a stock so committed to artificial intelligence that it is literally in the firm’s domain name and the ticker symbol for the firm is AI.
The company has enterprise artificial intelligence in its DNA, a founder with a proven history of growing a company from inception to acquisition, and a global customer base.
It’s also got a highly impressive track record of growing revenues, which grew 71% in 2020 before slowing to 16.9%, 38% and 5.6% in the subsequent three years.
Like other AI stocks, C3.AI had a good run in 2023, and appears fully valued at this time close to analysts consensus price target of $26.09 per share. Nevertheless, this is a stock to keep on your radar for a pullback in the overall market might drag even these stalwart AI stocks down with it.
Another stock that has demonstrated enormous capability in the AI space is Palantir (NYSE:PLTR). Interestingly, this too is a company that Stan Druckenmiller of Duquesne Family Office has been on a ride with for a long time.
Where Palantir has found a unique value proposition is in military applications. For example, the CEO famously stated that Palantir technology was effective in helping Ukraine to rebuff the advances of Russia by targeting strategic assets and sites.
Palantir hung around the sub-$10 mark for a very long time but when it burst higher it had a lot of momentum, and that’s in part due to the AI wave it has been riding but also the company’s commercial business, which has been growing. Investors had been concerned about the company’s excess reliance on government contracts and it’s not to say the company has weaned off them so much as to say it has supplemented them with corporate sector contracts.
Moving to larger market cap stocks that are deploying AI, the bellwether is Microsoft. In retrospect, it made a monumentally smart bet on Open AI, the company that sparked the AI revolution in the first place with its ChatGPT product.
Microsoft, according to Elon Musk, essentially has Open AI in its grasp. Microsoft can both leverage the technology prowess of Open AI on its own software products as well as take ownership of Open AI should it wish to bring it fully under the hood. Those details are claimed by Musk and likely true. If so, perhaps the biggest winner of all AI stocks will be Microsoft in the coming years.
Last but not least, don’t forget about Alphabet’s own Bard. Famously back in 2014, Google acquired DeepMind, and with it much of the AI talent in the world.
Slowly but surely, competitors emerged. Elon Musk bet on Open AI with the vision that it would become an open source competitor to Bard.
Over time, Alphabet’s Bard has the potential to seriously challenge Open AI for accuracy, though admittedly its first forays into demonstrating its software prowess fell somewhat short of the mark. Don’t discount Alphabet too soon, it’s got the capital, talent and track record to compete and win against the best in the world.
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