Artificial intelligence (AI) may be the hottest investment area right now, but the great news is you don't have to invest a fortune to potentially benefit down the road. Many promising players trade for less than $100, and in fact, some even trade for under $10.
Now let's say you have $100 that you'd like to invest in this high-growth area. With this amount, you actually can get in on three of my favorite AI players, each with a business that helps them stand out from the crowd. It's worth the bet, considering the AI market, at a compound annual growth rate in the double digits, is forecast to surpass $1 trillion by the end of the decade. And this means we could be at the start of an exciting growth story with significant earnings potential ahead.
So, let's check out my top AI stocks, players that together have the potential to significantly grow your $100 as this market takes off.
Image source: Getty Images.
1. Palantir Technologies
Palantir Technologies(NYSE: PLTR) traditionally has been known for its contracts with governments, helping them aggregate their data and make better use of it for various projects. These days, though, growth is taking off at Palantir thanks to its use of AI throughout its platforms, and the idea that this AI-powered technology may be quite useful for companies too.
In fact, commercial use of Palantir's systems is growing thanks to the company's launch of its Artificial Intelligence Platform (AIP) and AIP Bootcamps to show potential users just how transformative this technology could be for their businesses.
This helped Palantir report 70% growth in U.S. commercial revenue in the most recent quarter and a 55% increase in U.S. commercial customer count. This business is driving growth right now, and Palantir Chief Executive Officer Alex Karp says he expects this trend to continue.
Palantir has partnered with top cloud providers, and most recently, the company announced a deal to make its platforms deployable across Oracle cloud infrastructure. All of this could help Palantir more easily reach customers of these particular cloud services.
Today, Palantir shares trade for about $21, but with growth in the U.S. commercial business just getting started, the stock could easily head higher from here.
2. Intel
Intel (NASDAQ: INTC) fell behind in the early days of the AI chip race, but it may have two potential revenue drivers just ahead. The company just announced the upcoming launch of its Gaudi 3 AI accelerator, a chip it says could outperform market leader Nvidia's top chip when used in certain large language models.
Though Intel didn't offer a price range for Gaudi 3, it indicated the chip is cheaper than Nvidia's H100. And this combination of solid performance at a good price could appeal to a wide range of AI customers. Even if Nvidia's highest-performing chip ever -- to be released later this year -- is stronger, some projects may not necessarily require that strength. And those customers could opt for Intel.
Intel also may benefit from the opening of its manufacturing network to others in a quest to become the world's No. 2 chipmaker by 2030. This offers the company an entirely new revenue stream, and as the only U.S.-based foundry, it could appeal to many local customers.
Intel shares trade for about $35, making them a perfect fit for our $100 budget today -- but the aforementioned catalysts could eventually push them to a much higher level.
3. SoundHound AI
SoundHound AI(NASDAQ: SOUN) is an innovator in the area of voice AI, with its platform immediately "translating" speech to meaning thanks to automatic speech recognition and natural language understanding technologies.
Today, SoundHound serves companies such as restaurants using its platform to take customer orders or carmakers integrating voice into vehicles -- but in the future other industries including healthcare and retail represent additional opportunities. In fact, the total addressable market by 2026 may total more than $160 billion.
Though SoundHound is small at the moment, with $17 million in revenue in the most recent quarter, demand for its voice technology looks strong. In the quarter, revenue and adjusted EBITDA both soared 80% -- and revenue reached record levels. The company also reported a subscriptions and bookings backlog of more than $600 million and reached an annual run rate of 3.5 billion queries -- that's up by 50% from the prior year.
SoundHound stock soared earlier in the year on news that top chip company Nvidia had invested in the company but has since pulled back to about $4. This young voice AI player still has a long path ahead to profitability, but today it makes a compelling bet for aggressive investors who don't mind some risk.
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Adria Cimino has positions in Oracle. The Motley Fool has positions in and recommends Nvidia, Oracle, and Palantir Technologies. The Motley Fool recommends Intel and recommends the following options: long January 2025 $45 calls on Intel and short May 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.
