The explosive growth of the artificial intelligence (AI) market has created many millionaires. For example, a modest investment of $3,000 in the AI chip maker Nvidia just 10 years ago it would be worth almost $1.5 million today.
But with a market cap of $3.6 trillion, it could be difficult for Nvidia to match the profits it has made millionaires over the next decade. That’s why investors looking for these kinds of life-changing returns should look for smaller companies that have more room to grow. I believe that these three companies — Symbotic (NASDAQ: SYM), Serve robotics (NASDAQ:SERV)And Lemonade (NYSE:LMND) – could perhaps be the deciding factor.
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Symbotic produces fully autonomous robots for handling pallets in warehouses. It claims that a $50 million investment in just one of its modules (which includes the robots and software) could deliver $250 million in lifetime savings over 25 years. His top customer is Walmartthat mandated that the company automate all of its regional distribution centers in the U.S. over the next decade. That deal accounted for 88% of Symbotic’s revenue in fiscal 2023 (which ended last September). Walmart is also one of Symbotic’s major investors.
Symbotic is largely dependent on Walmart, but has gained more and more major customers Goal, Albertsonsand C&S Wholesale. It’s also supplying more robots to GreenBox, a new warehouse-as-a-service joint venture it launched with its major backer Soft Sofa last year.
Symbotic’s revenue is up 55% in fiscal 2024, and analysts expect revenue to continue growing at a compound annual growth rate (CAGR) of 32% over the next two years as the company continues to honor and maintain its long-term agreement with Walmart . new customers. Analysts also expect it to become profitable under generally accepted accounting principles (GAAP) by 2025.
With an enterprise value of $3.1 billion, Symbotic shares still look cheap at 1.3 times this year’s sales. It faces near-term macroeconomic and competitive headwinds in warehouse automation, but it could become a millionaire stock in the coming years.
Serve Robotics develops autonomous curbside delivery robots. It was originally founded as a unit of Postmates, which was acquired by Uber Technologies in 2020. Uber spun off Serve in 2021, but it still uses its robots to fulfill some Uber Eats orders in Los Angeles.
Serve still generates all of its revenue from Uber and operated just 59 active robots in the Los Angeles area in the third quarter of 2024. But by 2025, it plans to deploy up to 2,000 robots for Uber Eats in LA and Dallas. Fort Worth Metro Areas.
For 2024, analysts expect Serve to generate less than $2 million in revenue, while posting a net loss of $34 million. But by 2025, they expect sales to increase to $13 million, while reducing net losses to $31 million. In 2026, they see turnover more than quadrupling to almost $60 million, while the net loss is reduced to $25 million. We should take these estimates with a grain of salt, but Serve’s business could gain momentum as more companies adopt their robots for short-haul deliveries. That growth could help the company attract more customers and thus reduce its dependence on Uber.
With an enterprise value of $379 million, Serve doesn’t seem very expensive at six times 2026 revenue. It remains a highly speculative stock, but it could still have a lot of upside potential and considers Nvidia one of its top investors.
Lemonade is an online insurance company that simplifies the onboarding and claims process with its AI-powered chatbots. That simple digital-first approach made it popular with younger and new insurance buyers, and more than 70% of customers were under 35 at the time of its IPO in 2020. Initially it only offered renters and homeowners insurance, but now also offers term life insurance, pet health policies and car insurance. It ended its latest quarter with 2.31 million customers, compared to just over 1 million customers at the end of 2020.
For 2024, Lemonade expects prevailing premiums to increase 26%, gross earned premiums to increase 22% to 23% and total revenue to increase 21% to 22%. It also sees its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) improving from negative $173 million in 2023 to negative $151 million-$155 million in 2024.
Lemonade has not yet proven that its business model is sustainable, but it is growing much faster than its larger competitors. With an enterprise value of $2.9 billion, it is trading at just four times next year’s revenue. So it could generate profits for millionaires if it scales up its operations, cuts its losses and widens its position.
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Leo Sun has no position in any of the stocks mentioned. The Motley Fool holds and recommends positions in Lemonade, Nvidia, Serve Robotics, Target, Uber Technologies, and Walmart. The Motley Fool has a disclosure policy.
3 Millionaire-Maker Artificial Intelligence (AI) Stocks was originally published by The Motley Fool
