By Michael Dubois, Head of Corporate at VG Global Holdings
The commercial word is obsessed with AI technology and investors are rushing in to buy into the companies which are best suited to satisfy this thirst for the new technology, and whose stock is likely to rise in the near to medium future.
There are two types of company within this sector: you can invest in companies that build AI hardware, develop and structure AI solutions, or sell AI development tools, or, you can invest in companies that use AI technology to make better products, improve their marketing, streamline their business, or create efficiencies.
I have picked two stocks well-placed within each sphere to show massive growth potential.
Palantir (PLTR)
Palantir operates AI data mining platforms for government agencies and enterprise businesses, and Gotham, Palantir’s government platform, finds patterns in disparate data so intelligence teams can locate and respond to terrorism threats. Various businesses use Palantir Foundry to house, transform and manipulate organizational data to streamline processes and make better decisions. The company went public in 2020 and reported its first profitable quarter in the fourth quarter of 2022, and now, its recent Q4 earnings confirmed an acceleration in its US commercial business as it closed out its first GAAP profitable year, with shares reflecting the optimism surrounding the company’s commercial segment and bottom line expansion, with shares up nearly 280% since the start of 2023. Analysts have stated that Palantir is “exhibiting multiple signs of acceleration heading into 2024 with an improved fundamental backdrop driven by increasing AI demand. Palantir’s Artificial Intelligence Platform (AIP) is driving a significant acceleration in its US commercial business, while underlying metrics and the bottom line are rapidly improving.” The company’s revenue is poised to show growth accelerated from 17% last year, to 20% this year, and nearly 21% in 2025.
Micron Technology (MU)
Micron Technology makes high-performance memory and storage hardware that powers AI solutions, and its products are used in data centers and self-driving cars. The company strengthened its AI portfolio when it purchased start-up FWDNXT in 2019, a company whose hardware and software solutions power deep learning solutions and neural networks. Micron’s revenue could be impacted by Chinese regulations, but the company, which has a 10% share in the HBM memory market (trailing behind Samsung and SK Hynix), may benefit from market pricing recovery and price increases, and its competitiveness in HBM3e could position it well to capture market share and increase its share to 23% by 2026. The company is well positioned for the future and its stock price at the moment is on the low side.
The author does not own any stock, option or similar derivative position in any of the companies mentioned, and has no plans to initiate any such positions within the next 72 hours. This article only reflect the author’s own opinions. The author is not receiving compensation for it and has no business relationship with any company whose stock is mentioned in this article.
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