Artificial intelligence (AI) has been a transformative force propelling numerous technology firms for close to two years, culminating in the Nasdaq-100 Technology Sector index surging by a remarkable 78% since November 2022. Remarkably, the embracement of this revolutionary technology is still in its nascent stage, with global AI market estimated at $136 billion last year and expected to skyrocket to nearly $827 billion by 2030, making the investment in steadfast AI stocks for the long term a strategic wealth-building move for discerning investors.

Analyzing the Growth Trajectory Fueled by AI Software Demand

The intensifying focus of companies and governments on leveraging AI capabilities has generated a burgeoning demand for software tailored to help seamlessly integrate this technology into their operations. Projections by S&P Global Market Intelligence indicate that the generative AI software market could witness a staggering compound annual growth rate (CAGR) of 58% through 2028, hitting annual revenues of $52 billion at the end of the forecast horizon from $5.1 billion in the previous year.

C3.ai, renowned for its generative AI software, is seeing a surge in demand as organizations channel more resources towards adopting generative AI software to enhance operational efficiency and foster innovation. The company recorded a 16% revenue uptick in fiscal 2024, amounting to $310.6 million, with projections standing at $382.5 million for the current fiscal year, signifying a 23% growth compared to fiscal 2023. This growth trajectory can be attributed to the increasing number of customers opting for C3.ai’s enterprise AI software offerings.

C3.ai not only provides off-the-shelf applications to enterprises but also furnishes development tools for crafting custom AI apps, and a software platform empowering customers to construct, launch, and operate generative AI applications to suit their unique requirements. Besides, C3.ai offers its AI software solutions through leading cloud computing partners such as Google Cloud, Amazon Web Services, and Microsoft Azure.

In fiscal 2024, C3.ai signed 52% more agreements compared to the prior year, with the partner network being pivotal in driving this growth, as evidenced by a 62% rise in partner origin agreements to a total of 115. Noteworthy is the 63% spike in the pipeline of qualified leads sourced through the partner network in the same period, underscoring a promising outlook for C3.ai, aptly reflected in consensus estimates projecting a near 51% compound annual growth rate in its bottom line over the next five years. As such, C3.ai emerges as an eminent AI contender for long-term investment, positioning savvy investors to capitalize on its growth potential.

As of now, the stock trades at 9 times sales, a reasonable valuation compared to the U.S. technology sector’s average price-to-sales ratio of 8. Although not profitable yet, C3.ai is anticipated to tip into profitability within a couple of years, driven by the anticipated acceleration in its growth trajectory that could propel its shares to new heights in the future.

Riding the Wave of Surging Generative AI Smartphone Adoption

The resurgence in the global smartphone market, abetted by the advent of generative AI-enabled devices, is proving to be a tailwind for Qualcomm (NASDAQ: QCOM). Notably, in the third quarter of fiscal 2024 closing on June 23, the semiconductor specialist, deriving a substantial chunk of its revenue from smartphone chip sales, witnessed an 11% year-over-year revenue surge to $9.4 billion. Concurrently, adjusted earnings soared by 25% year-over-year to $2.33 per share, with the company projecting $9.9 billion in revenue in the ongoing quarter at the midpoint of its guidance range, translating to a 14% upswing from the same period last year.

Of paramount significance is Qualcomm’s anticipated 26% year-over-year uptick in adjusted earnings, signaling an imminent growth trajectory that’s poised to gain momentum, propelled by the vast potential in AI smartphones. Market intelligence firm IDC forecasts a staggering 336% uptick in the sales of generative AI smartphones this year, totaling 234 million units. By 2028, IDC foresees a meteoric rise in generative AI smartphone shipments to a remarkable 912 million units annually.

Qualcomm stands to reap substantial benefits from this secular growth trend, with 63% of its revenue stemming from smartphone processor sales. Noteworthy is the company’s estimated 23% share of the global smartphone application processor market, as denoted by Counterpoint Research, with leading smartphone original equipment manufacturers (OEMs) such as Samsung leveraging its chips to fuel generative AI smartphones.

The burgeoning generative AI opportunity partly underpins the heightened analyst expectations in Qualcomm’s earnings growth, indicative of the promising prospects that lay ahead for the company. Siemens anticipates that Qualcomm’s earnings could stack up positively in the imminent future, bolstered by its entrenched position in the generative AI smartphone segment, a trajectory that could pave the way for sustained growth and shareholder value creation in the long haul.