Nvidia is undoubtedly the name many investors think of today when they think of artificial intelligence (AI). And that’s not a bad thing, as the chipmaker plays a big role in helping companies develop AI models and improve their overall capabilities. But besides Nvidia, there are some strong AI stocks for investors to consider.
Palantir Technologies (NYSE:PLTR), Amazon (NASDAQ: AMZN)And Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) are three stocks that all look unstoppable right now and could be excellent long-term options for AI investors. Let’s find out a little more about these three buy-and-hold AI stocks.
1. Palantir Technologies
Palantir is a name that is becoming increasingly popular among both government organizations and private companies. The company’s focus on data analysis and delivering actionable insights has always had AI connections. But more recently, Palantir made the connection clearer when it launched its Artificial Intelligence Platform (AIP). Customer responses show that they would like to use it.
In 2023, the company reported revenues totaling $2.2 billion, growing 17% year over year. For the current year, Palantir expects revenue to be about $2.6 billion to $2.7 billion, up at a slightly higher rate of about 20%. It also expects to remain negative, as in recent quarters, as a lack of profitability is no longer a major risk among tech stocks.
However, Palantir expects the pace of growth to accelerate, thanks in large part to the more than 500 “boot camps” it has held with customers to help them identify potential opportunities for AI to help their businesses. Securing these types of contracts can take some time, but with a few big wins, the company’s revenues could potentially be much higher in the long run.
Investors expect more growth from the company thanks to AI, but Palantir is receiving more positive attention because it is not only improving its growth rate but also being profitable at the same time. Overall, this could be one of the best AI stocks to own, as Palantir’s mix of government and commercial revenues gives it excellent long-term stability.
2. Amazon
Amazon was a top AI stock to own even before AI was a big buzzword in stocks. The company has long used AI to optimize its e-commerce operations and shorten delivery times. While it is a big name in e-commerce, its other business segments are getting a boost from the increased interest in generative AI. Amazon has invested $4 billion in AI startup Anthropic, which last month rolled out Claude 3, an AI chatbot that could rival OpenAI’s ChatGPT.
Whether or not Claude 3 becomes the best chatbot is ultimately not what matters. Instead, it’s Amazon’s continued commitment to investing in AI and next-generation technologies that makes it a great option for long-term investors. Chatbots are just one of many AI-related growth opportunities for Amazon, especially with its strong cloud business Amazon Web Services.
The company’s deep pockets also put it in great shape to continue growing and investing in AI. Last year, Amazon generated free cash flow totaling $32.2 billion as it focused on efficiency and cutting costs.
3. Alphabet
Another stock that is poised for growth thanks to AI is Alphabet, the parent company of Google and YouTube. It too has entered the chatbot wars with the launch of Bard (recently upgraded and renamed Gemini). However, Google’s rollout was not without its challenges as the chatbots encountered issues in delivering correct and accurate results. But that shouldn’t deter investors; Just because the launch doesn’t go well doesn’t mean its long-term prospects are in trouble.
Alphabet has a wealth of data from YouTube and Google searches, which gives it a major advantage in developing a chatbot that can ultimately be more intuitive and predictive in knowing what people can search for and ask questions about.
The company’s financials are perhaps the best of all three stocks, as Alphabet generates strong margins; Last year, free cash flow was just under $70 billion. With a wealth of data and cash, Alphabet is a great AI stock to buy and hold for the long term.
Should You Invest $1,000 in Palantir Technologies Now?
Consider the following before purchasing shares in Palantir Technologies:
The Motley Fool stock advisor The analyst team has just identified what they think is the 10 best stocks for investors to buy now… and Palantir Technologies wasn’t one of them. The ten stocks that survived the cut could deliver monster returns in the coming years.
Think about when Nvidia created this list on April 15, 2005… if you had $1,000 invested at the time of our recommendation, you would have $526,933!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including portfolio building guidance, regular analyst updates, and two new stock picks per month. The Stock Advisor is on duty more than quadrupled the return of the S&P 500 since 2002*.
View the 10 stocks »
*Stock Advisor returns April 15, 2024
Suzanne Frey, a director at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. David Jagielski has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Alphabet, Amazon, Nvidia, and Palantir Technologies. The Motley Fool has a disclosure policy.
3 Unstoppable AI Stocks Not Named Nvidia That You Can Buy and Hold for Years was originally published by The Motley Fool
