To generate robust returns in the stock market over many years, you need to find companies with strong competitive positions and excellent long-term growth prospects.
To help you in your search for these fortune builders, here are two elite companies that will benefit from perhaps the most powerful growth trend of all: artificial intelligence (AI).
1. Gun ownership
From the smallest sensors to the largest supercomputers, Arm positions (NASDAQ:ARM) provides the underlying technological architecture on which billions of its customers’ products are built. As artificial intelligence (AI) drives a semiconductor renaissance, Arm’s chip design business is booming.
Arm’s semiconductor designs help power some of the world’s most popular devices and computing tools. Apple uses Arm’s chip technology in its iPhone and Macs. NvidiaThe new Blackwell accelerated computing platform includes Arm-based processors. And Microsoft is working with Arm to develop custom-designed general purpose computing chips for use in massive cloud data centers.
These partnerships fuel Arm’s growth. The British chip architect’s revenue rose 47% year over year to $928 million in the fourth quarter. Free cash flow, in turn, grew 40% to $637 million.
There is still a lot of growth ahead. Arm’s energy-efficient chip designs are gaining market share in fast-growing markets such as cloud computing, the Internet of Things (IoT) and automotive technology.
AI will likely be the company’s most powerful growth driver over the next decade. “From the most complex AI cloud applications to the smallest edge devices, AI on Arm is everywhere,” CEO Rene Haas and Chief Financial Officer Jason Child wrote in a letter to shareholders.
2. Palantir Technologies
The world is a volatile place. Due to increasing geopolitical tensions, government agencies are turning to them Palantir Technologies (NYSE:PLTR) for data analysis. At the same time, companies are rushing to implement Palantir’s powerful AI tools.
Palantir helps its customers gather actionable insights from a variety of data sources. The analysis software specialist has been active in the American defense and intelligence services for a long time. For example, the US military is working with Palantir to build AI-powered ground stations that collect and integrate information from a range of terrestrial, air and space-based sensors.
Companies are also showing great interest in Palantir’s AI services. The software star’s new Artificial Intelligence Platform (AIP) combines secure access to state-of-the-art AI models with real-time data aggregation and analytics tools.
Palantir conducted 660 hands-on “boot camps” in the first quarter to give companies the opportunity to see how AIP can benefit their specific businesses. The strategy works. Palantir’s US commercial revenue rose 40% year over year to $150 million, driven by a 69% increase in customer numbers to 262.
Additionally, Palantir’s strong ties to the defense sector continue to pay off. Government revenues rose 16% to $335 million. “There is essentially no conflict in the world involving Western allies, and the stakes are life and death, with Palantir not being the first call,” CEO Alex Karp said during a conference call with analysts on May 6.
Notably, Palantir is becoming increasingly profitable as it scales its revenue base. Adjusted operating profit rose 81% to $226 million. That marked the company’s sixth consecutive quarter of expanded adjusted operating margin.
With its powerful AI solutions proving popular among businesses and government agencies alike, Palantir still has a long way to go for further expansion. And with earnings growing rapidly along with its customer base, long-term investors who buy this AI leader’s stock today should be well rewarded.
Should You Invest $1,000 in Palantir Technologies Now?
Consider the following before purchasing shares in Palantir Technologies:
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Apple, Microsoft, Nvidia, 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 Unstoppable Artificial Intelligence (AI) Growth Stocks to Buy and Hold for the Next Decade was originally published by The Motley Fool
