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Artificial intelligence has been one of the top trends amongst the growth stocks in the tech industry. Some of the most established companies, along with upstarts, are looking to capitalize on the trend. Though it’s still early in the piece, the technology proves its worth in completing complex tasks in a significantly lower time frame than humans.
According to Fortune Business Insights, the relatively nascent market is expected to grow at a whopping 20.1% from 2022 to 2029. Several AI stocks are trading at multi-year lows and have lost their luster due to the rising interest rates.
However, the pull-back in their prices has created an attractive buying opportunity for those who can tackle the near-term volatility. Here are seven best AI stocks you should invest in now.
AIC3Ai$19.48SPLKSplunk$96.93PATHUiPath$18.33NVDANvidia$163.62UPSTUpstart$26.66IDEXIdeanomics$0.7087DUOTDuos Technologies Group$3.76Best AI Stocks: C3Ai (AI)
Source: ShutterstockC3Ai (NYSE:AI) is a leader in the provision of enterprise AI software. It provides its customizable software applications to its growing client base to effectively leverage the power of its cutting-edge technology.
The bulk of its sales come from the fossil fuel industry, offering a suite of applications to help reduce carbon emissions and anticipate equipment failures. It has partnerships with some of the biggest oil and gas companies, including Shell, Baker Hughes, and others.
Moreover, its association with some of the largest cloud services providers has made its tools accessible to various industries. This is evidenced in its growing customer base, which has grown by double-digit margins over the past several quarters.
Additionally, with a healthy gross margin of over 70%, it has the flexibility to improve bottom-line results without compromising too much on costs.
Splunk (SPLK)
Source: Michael Vi / Shutterstock.comSplunk (NASDAQ:SPLK) has become a major player in the Big Data space, experiencing rapid growth driven by digital transformation and cybersecurity threats.
Virtually every Fortune 100 company uses its remarkably sticky platform to manage its tech infrastructure. Moreover, the growth in its fundamentals has been impressive, boasting double-digit top-line growth over the past five years.
In the past few years, Splunk has looked to move away from its on-premise deployments business to recurring AI and cloud-based contracts. Such a model is likely to result in significantly higher margins and help turn a profit soon.
It finished its last fiscal year with more sales from its cloud business than licensing. Hence, the transition is already paying dividends for Splunk in its efforts to become a giant in its niche.
UiPath (PATH)
Source: dennizn / Shutterstock.comUiPath (NYSE:PATH) has the first-mover advantage in robotic process automation. It offers well-tested and compelling solutions to help companies significantly improve the efficiency of their software development.
Its disruptive technology and growth rates have impressed investors, especially during the pandemic years. Though its recent results show a slowdown in top-line expansion, its long-term case remains intact.
Its first-quarter results show a 32% jump in revenue growth to $245.1 million, which comfortably beat analyst estimates by $19.7 million. Moreover, the dollar-based net retention rate of 138% is highly encouraging considering the current headwinds.
Profitability has been weighed down by sizeable stock-based compensation. Additionally, with the AI-based robot process automation market expected to rise 38.2% from 2022 to 2030, the current stock price is dirt cheap making it one of the best AI stocks at the moment.
Nvidia (NVDA)
Source: ShutterstockTech giant Nvidia (NASDAQ:NVDA) is at the heart of the AI revolution. Its chips constitute over 70% of the burgeoning AI market, supporting an array of tech developments, including medical imaging, automobiles, gaming, and the metaverse.
It partners with some of the biggest names in the tech world, such as Amazon and Alphabet, which effectively use its product offerings.
In the upcoming decade, augmented reality, automation, and virtual reality will become ubiquitous, and Nvidia will likely be a major beneficiary. The company has been developing its software stack rapidly along with its hugely successful hardware business.
Its software offerings, including the Omniverse and GeForce Now, are also using AI to offer a more refined experience for its expanding user base. Hence, NVDA is squarely on a path toward unlocking a mind-boggling $1 trillion market opportunity.
Upstart (UPST)
Source: rafapress / Shutterstock.comUpstart (NASDAQ:UPST) is an AI specialist that has developed a highly effective algorithm-based loan underwriting model to assess the credit worthiness of borrowers.
The goal is to continue refining its data points and improving outcomes to be more competitive against current scoring methods such as FICO. Moreover, it has spread its tentacles in multiple growth areas to expand its total addressable market. It seems close to a trillion-dollar opportunity from just personal and auto loans.
During the first quarter, company sales shot up 156% from the prior-year period to $310 million. Moreover, net income also increased by a whopping 224%. It continues to add new partners across different niches at a robust pace each quarter.
For instance, its bank and credit union partners have risen from 18 in 2020 to 57 at the conclusion of this year’s first quarter. Hence, Upstart offers explosive upside for those willing to stomach the risk.
Ideanomics (IDEX)
Source: ShutterstockIdeanomics (NASDAQ:IDEX) is one of the more risky AI, and EV plays at this time. Its business has undergone multiple changes over the years, but it’s now settled into its role as a holistic EV services provider. It generates sales from its electric car ecosystem, including financing, leasing, charging, and energy services.
With the exponential growth in EV companies, the enterprise is receiving several orders from its partners, which bodes incredibly well for it in the long term. It operates multiple divisions and companies offering a specialized EV service.
For example, its WAVE subsidiary offers wireless charging solutions for heavy-duty EVs. WAVE has been one of its companies that has gained plenty of traction of late, with multiple orders from public and private entities. Hence, IDEX stock has got to be patient to enjoy its upside potential in the future.
Best AI Stocks: Duos Technologies Group (DUOT)
Source: ShutterstockDuos Technologies Group (NASDAQ:DUOT) leverages its AI capabilities to provide its clients with situational awareness and a logistics information platform.
Its primary solution is its cutting-edge railcar inspection portal that can effectively detect teething troubles before they become serious. Its algorithms have proven to have an almost 100% accuracy rate. Moreover, these algorithms and AI capabilities can be applied to multiple markets.
It estimates a colossal $24 billion market opportunity in the North American market. Additionally, its growing order backlog of over $40 million is a testament to its growing traction. It generated $8.25 billion in sales last year and is likely to deliver $16.5 million to $18 million in revenues with improved margins in 2022.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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