Goldman Sachs notes that the technology sector has been the driving force behind the US stock market since 2010, generating 40% of stock market gains over the past fourteen years.
Many technology stocks have posted outsized gains since 2010. For example, $1,000 was invested in it Advanced micro devices would now be worth more than $23,000. Other companies – including Microsoft, AmazonAnd Netflix — have also been multibaggers during this period Nvidia posted stunning gains thanks to multiple catalysts, the latest of which is artificial intelligence (AI).
With AI still in its early stages of growth, Bloomberg estimates that the technology could generate $1.3 trillion in revenue by 2032, up from this year’s estimate of $137 billion. So if you want to build a million-dollar portfolio, you might do well to buy AI-focused companies and hold them for a long time.
In this article, we take a closer look at two names that could soar in the long term, delivering excellent returns for investors while contributing to a million-dollar portfolio with AI-powered growth.
1. Palantir Technologies
Companies like Nvidia are in the spotlight with their powerful chips that can train AI models. But those models must ultimately be used for real-world applications. Palantir Technologies (NYSE:PLTR) helps customers do just that with its Artificial Intelligence Platform (AIP).
AIP users can build generative AI applications, integrate large language models (LLMs) into their workflows, and deploy off-the-shelf AI applications. Palantir has cleverly organized its “boot camps” to show customers how to leverage generative AI for their business needs. This strategy has yielded significant contracts.
And customers who sign up for AIP reportedly want to deploy the platform across their operations, creating a land-and-expand effect that significantly increases Palantir’s commercial customer base and contract value. That share of its business rose 55% year-over-year in the second quarter, surpassing the 41% increase in its total customer base, which includes government customers.
The company recorded a total contract value of $946 million in the second quarter, an increase of 47% compared to the same period last year. And AI helped boost the net retention rate (NRR) to 114%, an increase of 300 basis points. (A score above 100% means existing customers are spending more money year after year.)
This metric does not include revenue from new customers acquired in the last twelve months, management says, so it does not yet fully capture the acceleration of U.S. commercial activity over the past year.
The 26% year-over-year increase to $4.3 billion in the company’s total remaining deal value is a further indicator of AI’s impact on its business. This measure refers to the total remaining value of Palantir’s contracts at the end of a reporting period. Considering the company generated $2.5 billion in revenue over the last twelve months, the significant value remaining in the deals points to healthier revenue growth going forward.
Palantir said its adjusted operating margin increased 12 percentage points to 37% in the second quarter, thanks to “our company’s strong economic performance.” Translation: The company is generating more profit per customer, thanks to higher spending on its products thanks to AIP.
Consensus estimates put Palantir’s annual earnings growth at 57% over the next five years. And with the global AI market expected to continue growing over the next five years, the company could maintain that healthy earnings growth for a longer period of time.
So if you’re looking for an AI stock with the long-term potential that could help build a million-dollar portfolio, you’d do well to take a closer look at Palantir before it soars higher.
2. Oracle
The software platforms that Palantir offers to customers run on a cloud infrastructure including: Oracle (NYSE: ORCL). The two companies already work together, with Palantir using Oracle’s distributed cloud and AI infrastructure for its AIP, among other things. And it’s not the only company using Oracle’s cloud to reach customers.
Companies rent Oracle’s cloud infrastructure for training AI models, in addition to offering their cloud-based AI services on the cloud platform. Demand for Oracle’s cloud infrastructure was high and exceeded availability. Management said during the September earnings call that its infrastructure cloud services business has reached annual revenue of $8.6 billion, driven by a 56% increase in consumption.
Oracle generated just under $54 billion in revenue last year. Thus, the AI-driven increase in demand for its cloud infrastructure has made a major impact on the market. That robust demand is why residual performance obligations (RPO) increased 53% year over year to $99 billion in the first quarter of fiscal 2025.
RPO refers to the total value of a company’s contracts that will be fulfilled at a future date. So the faster growth in this metric compared to Oracle’s revenue growth last quarter is indicative of stronger revenue growth in the future.
Goldman Sachs estimates that Infrastructure as a Service will generate $580 billion in revenue by 2030, powered by AI, meaning Oracle has a huge opportunity. Consensus estimates predict an acceleration in growth after revenue rose 6% in the previous fiscal year to $53 billion.
Given the enormous opportunities available, Oracle could maintain strong growth in the long term. Finally, with the stock trading at 28 times forward earnings compared to the US tech sector’s average price-to-earnings ratio of 46, investors are getting a good deal on this AI stock. It seems like a good choice if you want to create a million dollar portfolio.
Should You Invest $1,000 in Palantir Technologies Now?
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Advanced Micro Devices, Amazon, Goldman Sachs Group, Microsoft, Netflix, Nvidia, Oracle, and Palantir Technologies. The Motley Fool recommends the following options: long January 2026 $395 calls to Microsoft and short January 2026 $405 calls to Microsoft. The Motley Fool has a disclosure policy.
2 Millionaire-Maker Artificial Intelligence (AI) Stocks was originally published by The Motley Fool
