Artificial Intelligence (AI) stocks weathered a storm over the summer. The VanEck Semiconductor ETF, heavily laden with semiconductor stocks affiliated with the AI sector, tumbled up to 25% from its July peak.
Yet, my optimism for AI remains unwavering. We have only glimpsed the preliminary stages of how this technology will revolutionize the world. Further breakthroughs will unfold over years, possibly decades.
This robust argument makes owning AI stocks for the long haul compelling. Here are two picks that stand out to me.
Image source: Getty Images.
Trailblazing Data Analytics Leader
Topping my list is Palantir Technologies (NYSE: PLTR).
The company, known for its AI-fueled big data solutions, is on an upward trajectory. Recently, Palantir’s inclusion in the S&P 500 index was announced. This news sparked a stock rally, leading to a 113% rise year-to-date.
Backing this stellar performance are the company’s solid fundamentals. Despite its youth, Palantir focuses on expanding its customer base and revenue. In the last quarter, quarterly revenue surged to $678 million, marking a 27% increase from the previous year.
Palantir’s American commercial customer count is soaring rapidly. With 295 U.S. commercial customers in the last quarter, a remarkable 83% year-over-year jump was recorded. Moreover, Palantir is attracting larger clients, having sealed 27 deals exceeding $10 million each during the period.
Undoubtedly, Palantir rides the wave of AI momentum with finesse. As CEO Alex Karp emphasized in a recent shareholder letter, “Our growth in the commercial and government spheres stems from an incessant customer demand for AI systems transcending mere performance and theory.”
In essence, Palantir has seized the opportunity and navigated it skillfully. Investors eyeing an AI stock for prolonged ownership should seriously consider Palantir.
The Pillar of AI Innovation
Next in line on my AI stock list is Nvidia (NASDAQ: NVDA).
Nvidia is a stock I endorse not just for buying but for holding for a decade or more. This endorsement stems from the belief that AI, a long-term trend unfolding over many years, mirrors the continual evolution of the internet.
Nvidia stands out in this landscape as the premier choice for constructing the “brains” of various AI models. The company leads in manufacturing graphic processing units (GPUs) favored by AI developers.
The fervent demand for AI-capable GPUs allows Nvidia to command top prices for its products, including the H100 and the upcoming Blackwell chip.
Recall why Nvidia’s stock surged over 600% in the last two years: exponential revenue and profit growth.
Data by YCharts.
In the most recent quarter (ending July 28), revenue hit $30.0 billion, marking a 122% surge from a year earlier. Over the past 12 months, Nvidia’s sales soared to $96.3 billion from $25.7 billion less than two years ago. Profits mirrored this robust growth.
Nvidia’s dominance in AI propelled its stock to new heights. Even after the remarkable two-year run, Nvidia remains an AI stock I’m keen on owning for the next decade and beyond.
Unlocking the Potential of Palantir Technologies
Prior to investing in Palantir Technologies, mull over this:
The Motley Fool Stock Advisor analyst team pinpointed what they deem as the 10 prime stocks for investors to snag now. Palantir Technologies didn’t make the cut, but the listed 10 stocks could yield monumental returns in the forthcoming years.
Reflect on Nvidia’s inclusion in this list on April 15, 2005… an investment of $1,000 at that time would have grown to $710,860 today!
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