2 Millionaire-Maker Artificial Intelligence (AI) Stocks

Matt Frankel, The Motley Fool

Sun, May 4, 2025, 7:11 AM 4 min read

Key Points

Roblox has done a great job with growth and has massive potential.
Upstart has been leveraging AI to improve its capabilities.
These aren't low-risk stocks, but they have tremendous potential.

There is no shortage of opportunities in artificial intelligence (AI) stocks. Quite frankly, AI is such a massive tech trend that there is room for many long-term winners.

However, some companies have a rare combination of incredible growth momentum and massive (and largely untapped) market opportunities. Here are two AI stocks in particular that I own in my personal portfolio that could grow to many times their current size in the years to come.

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Person playing computer games while friends cheer for them. — Image source: Getty Images.

Excellent momentum and tons of potential

Gaming and metaverse platform Roblox (NYSE: RBLX) has been growing rapidly. In the first quarter, bookings grew by 31% year over year, and free cash flow more than doubled to $426.5 million. There are now nearly 98 million daily active users (DAUs), 26% more than a year ago, and as a particularly good sign, the number of paying users is growing at an even faster 29% rate. All of the first quarter numbers were above management's recent guidance.

Just how big could Roblox get? Management has said that its long-term goal is to have 1 billion active users in its ecosystem, which would be more than 10x the current size of the business. If the company can achieve this and expand its profit margins to a level comparable to other software businesses, it could be a home run for investors.

There are lots of potential catalysts that could help take Roblox to the next level. For example, there's a new affiliate program that could bring more content creators onto the platform, and the AI potential for Roblox's platform is truly limitless.

In addition to the core gaming business, management has discussed other potential use cases for the platform, like e-commerce, academics, and entertainment, In fact, the global metaverse market itself is expected to roughly 10x in size from 2024 through 2032, according to Fortune Business Insights, so it's completely conceivable that Roblox could grow by the same amount or even more.

AI-powered lending models

Upstart (NASDAQ: UPST) is trading for about 88% less than its all-time high reached in 2021, but its business is far stronger today than it was back then. The company, which uses proprietary AI models to approve loans on behalf of third-party banks, reported impressive results for 2024 and has massive potential over the long term.

We'll start with the recent numbers. In the fourth quarter of 2024, Upstart reported 56% year-over-year revenue growth, $38.8 million in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), up from less than $1 million in the year-ago period. The company expects its first billion-dollar revenue year ever in 2025, and that includes the pandemic-era days when loan demand was off the charts. Plus, data shows that Upstart's lending model does a better job of predicting risk than the traditional FICO model alone.

Upstart's personal loan origination business has plenty of room to grow, but it's the two newer lending verticals, auto lending and home equity lines of credit (HELOCs), that are most exciting. The auto loan industry is more than four times the size of the personal loan market, and due to soaring real estate values and high interest rates, U.S. homeowners are sitting on about $35 trillion in home equity.

The two expansion markets currently make up less than 4% of Upstart's volume, but the recent momentum is encouraging. Auto loan and HELOC origination volume increased, respectively, by 61% and 59% sequentially in the fourth quarter, and that's in an environment where interest rates are historically high and consumer confidence is low. If we get a falling-rate environment over the next couple of years, as many experts think we will, it could be a massive catalyst to take Upstart to the next level.

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Matt Frankel has positions in Roblox and Upstart and has the following options: short December 2025 $95 calls on Upstart. The Motley Fool has positions in and recommends Roblox and Upstart. The Motley Fool has a disclosure policy.

2 Millionaire-Maker Artificial Intelligence (AI) Stocks was originally published by The Motley Fool

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