2 Artificial Intelligence (AI) Stocks That Could Create Millionaires

Artificial Intelligence (AI) has been an incredible catalyst for many companies over the past year or so, with many of the companies utilizing this technology experiencing a rapid rise in their stock prices.

For example, in early 2023 inNvidiaThe investment of $10,000 is now worth nearly $58,000. This is not surprising, as the company has been a pioneer in the AI space, with graphics cards that allow users to train large-scale language models (LLMs) and deploy AI applications. Early last year forSupercomputer stocka similar investment now worth $110,000, as the company's AI servers have been hotly anticipated.

The good news is that the adoption of AI is still in its early stages. Buying solid AI stocks as part of a diversified portfolio will allow investors to profit from this long-term growth trend.

Palantir Technologies (NYSE: PLTR)respond in singingASML Holding (NASDAQ resonance code: ASML)These are two stocks that investors can consider buying now to capitalize on the popularity of artificial intelligence.

1. Palantir Technologies

Palantir Technologies is a solid performer in the surge in demand for artificial intelligence software. The company's Artificial Intelligence Platform (AIP) is being widely adopted, and Koon said it is helping the company "dramatically compress sales cycles and accelerate new customer acquisition". That's not surprising, since AIP gives companies the ability to integrate large-scale linguistic models into their operations through boot camps, which Palantir organized to help customers understand the use cases for AI and how to leverage the technology to improve their businesses.

AIP has led to a dramatic increase in the number of commercial deals signed by the company. In a February earnings call, Koon noted, "Demand for AIP with boot camps as the delivery mechanism for AIP has exceeded expectations, and we are seeing AIP drive the expanding addressable market."

Palantir's strength in the AI software market is a key reason why analysts expect the company's revenue to grow 22% to $2.71B in 2024-an increase from the 17% growth reported in 2023. What's more, Palantir's AI business is in the early stages of growth, as the AI software platform market is projected to grow at an annualized rate of 311 TP3T through 2030, with revenues reaching $279 billion by the end of the decade.

If Palantir can maintain its impressive deal momentum, its growth will likely accelerate. For example, in the fourth quarter of 2023, the company nearly doubled the number of $1 million-plus deals it closed year-over-year to 103.

The company's Residual Performance Obligation (RPO), which is the value of the carriers Palantir expects to fulfill in the future, also grew 28% year-over-year to $1.24 billion. With RPO growing faster than the top line, the company has a very healthy revenue pipeline.

The company has now entered into an agreement withOracle CorporationThe company is also working to distribute its AI software platform across a wider network, which will help it gain more customers. These promising developments explain why analysts are forecasting the company to grow earnings at an annualized rate of 85% over the next five years.

Increased profitability is likely to generate more revenue for Palantir shareholders, making it a top choice for investors looking for AI growth stocks in their portfolios.

2. ASML Holding

Semiconductors play a crucial role in driving the artificial intelligence revolution, as evidenced by the huge demand for Nvidia chips. However, the manufacturing of these chips would not be possible without ASML Holding's machines.

For example, Nvidia's flagship H100 processor, which is selling like hotcakes, utilizesTaiwan Semiconductor Manufacturer(commonly known as TSMC) at a customized 5 nanometer (nm) node. TSMC utilizes ASML's Extreme Ultraviolet (EUV) lithography system to fabricate chips based on this process node.

The good news for ASML is that demand for advanced process nodes is increasing due to the emergence of artificial intelligence. Nvidia, for example, is rapidly increasing its production of AI chips to meet customer demand. In order to achieve this goal, foundries such as TSMC are reportedly investing more capital. On a previous earnings call, TSMC's management pointed out that of its 2024 total capital expenditure budget of $28 billion to $32 billion, "capital budgets of 70% to 80% will be allocated to advanced process technologies."

In addition, with Nvidia andAppleAs companies such as ASML move to more advanced chip manufacturing using 3nm and 2nm process nodes, the capital expenditure on EUV equipment should increase. This is why ASML's equipment orders have increased significantly in the fourth quarter of 2023.

The Dutch company's net bookings surged to €9.2 billion in the fourth quarter of 2023, up from €2.6 billion in the previous quarter. The company's order backlog amounted to €39 billion. ASML's order book is likely to grow as the AI chip market is expected to grow at an annualized rate of 38% by 2032, which will further drive demand for advanced chip manufacturing equipment.

For example, TSMC is building a third plant in the US to produce 2nm chips, which means it will order EUV lithography equipment from ASML, which has a monopoly in this market. In short, Artech's long-term growth in the AI chip market and ASML's control of EUV lithography are the reasons why the company appears to be poised for strong growth in the future.

It's worth noting that the company's stock price has soared nearly tenfold over the past decade, and the lucrative semiconductor opportunity ahead suggests that ASML stock could be a big winner in the long run.

Should you invest $1,000 in Palantir Technologies now?

Before buying shares of Palantir Technologies, consider the following:

Motley Fool Stock AdvisorThe analyst team has just named what they believe to be the best value for investors.10Only ...... and Palantir Technologies were not included. The 10 stocks that made the list could generate huge returns in the coming years.

Consider April 15, 2005Nvidia) on the list at ...... If you invest $1,000 at the time of our recommendation, theYou will have 540,321dollar! *Stock Advisor provides easy-to-use stock investment tools for investors.

Stock AdvisorIt provides investors with an easy-to-learn blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. Stock Advisor The service has contributed to the S&P 500 Index's return since 2002.translate twiceMuch*.

View 10 Gift Certificates

*Stock Advisory Rates as of April 8, 2024

Harsh Chauhan does not hold any of the above stocks.The Motley Fool holds recommendations for ASML, Apple, Nvidia, Oracle, Palantir Technologies and Taiwan Semiconductor Manufacturing.The Motley Fool has a disclosure policy.

2 Millionaire Stocks in Artificial Intelligence (AI) was originally published by The Motley Fool.