Unlocking the Power of Artificial Intelligence: 2 Stocks to Watch
Artificial intelligence (AI) has been a driving force behind the US stock market’s growth since 2010, generating a staggering 40% of the equity markets’ gains over the past 14 years. With AI still in its early phases of growth, experts estimate that the technology could generate $1.3 trillion in revenue by 2032.
Palantir Technologies: A Leader in AI Deployment
Palantir Technologies is helping customers deploy AI models for real-world applications through its Artificial Intelligence Platform (AIP). The company’s “boot camps” have landed sizable contracts, and customers are signing up for AIP to deploy the platform across their operations. This has led to a significant increase in Palantir’s commercial customer base and contract value.
- Total contract value booked in Q2: $946 million, up 47% year-over-year
- Net retention rate (NRR): 114%, up 300 basis points
- Remaining deal value: $4.3 billion, up 26% year-over-year
Consensus estimates project Palantir’s annual earnings growth at 57% for the next five years. With the global AI market expected to continue growing, Palantir could sustain healthy earnings growth for a longer period.
Oracle: A Partner in AI Infrastructure
Oracle provides cloud infrastructure for Palantir’s AIP and other companies’ AI services. The demand for Oracle’s cloud infrastructure has been strong, with an annualized revenue run rate of $8.6 billion. This has driven a 56% increase in consumption, and Oracle’s remaining performance obligations (RPO) shot up 53% year-over-year to $99 billion.
- Revenue generated in the past year: $54 billion
- RPO growth: 53% year-over-year
- Estimated infrastructure as a service revenue by 2030: $580 billion
Consensus estimates project an acceleration in growth for Oracle, and the stock is trading at 28 times forward earnings, making it a good fit for investors looking to create a million-dollar portfolio.
Investing in the Future of AI
Both Palantir and Oracle are well-positioned to benefit from the growing demand for AI solutions. As the technology continues to evolve and improve, these companies are likely to see significant growth and returns. For investors looking to create a million-dollar portfolio, these two stocks are definitely worth considering.
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