Artificial intelligence (AI) stocks have been dominating the market lately, and the reasons are crystal clear. This cutting-edge technology has already begun fueling significant revenue spikes for companies in the AI sector. As customers continue to invest in AI tools, they are driven by the potential of AI to transform their businesses in various ways. From expediting drug development to enhancing vehicle safety and usability, the possibilities seem endless.
Investors have taken notice of this potential goldmine, propelling the S&P 500 index to climb almost 20% thus far in the current year. While many AI companies have witnessed exponential surges in their stock prices, there are still plenty of intriguing opportunities to explore. In particular, two AI companies stand out as prime candidates poised for remarkable growth. Let’s delve into them.
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Palantir Technologies: A Disruptor Making Strides
Palantir Technologies (NYSE: PLTR) excels in assisting its clientele in aggregating complex data webs and leveraging this data to drive decision-making. Historically reliant on government contracts for revenue, the two-decade-old firm has embraced a new avenue for growth in recent times.
By tapping into its commercial segment, Palantir has witnessed a meteoric rise, thanks to its heavy investment in AI. Launching the Artificial Intelligence Platform (AIP) last year marked a significant milestone, offering a powerful AI-driven system for clients to extract insights from their data rapidly. To showcase the platform’s prowess, the company ingeniously conducts bootcamps, allowing potential clients to experience its capabilities firsthand.
The bet on AIP is proving fruitful, propelling growth in both the government and commercial sectors, with the latter now leading the charge. Recent figures reveal a 55% surge in U.S. commercial revenue, outshining the 24% uptick in U.S. government revenue. Just four years ago, Palantir boasted a mere 14 commercial clients, a number that has now skyrocketed to nearly 300, illustrating remarkable progress in a short span.
Super Micro Computer: Powering the AI Revolution Behind the Scenes
Super Micro Computer (NASDAQ: SMCI) plays a pivotal role in the AI landscape as a critical infrastructure provider for AI data centers. From workstations to full-rack scale solutions, the company equips these facilities with essential equipment. While not the only player in this space, Supermicro has outpaced industry norms, recording fivefold growth over the past year.
The recipe for this success lies in its close collaborations with top chip designers worldwide, notably industry leader Nvidia. By swiftly integrating cutting-edge innovations into its products, Supermicro stays ahead of the curve. Moreover, its building blocks approach, featuring products with interchangeable parts, emphasizes speed and customization, assuring clients of swift access to state-of-the-art solutions.
This strategic alignment has propelled substantial revenue growth for Supermicro, with quarterly figures this year eclipsing its entire annual revenue from as recently as 2021. Looking ahead, the company is well-positioned to address a significant pain point in AI data centers – heat accumulation – through its direct liquid cooling (DLC) technology. With projections indicating that up to 30% of new data centers will adopt DLC in the next year, Supermicro appears poised to dominate this niche.
Considering an Investment in Palantir Technologies?
While the future appears promising for AI stocks like Palantir Technologies and Super Micro Computer, it’s essential to weigh your options carefully. Should you be considering an investment in Palantir Technologies, bear in mind:
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Adria Cimino holds no positions in any of the stocks discussed. The Motley Fool has stakes in and recommends Nvidia and Palantir Technologies. The Motley Fool adheres to a strict disclosure policy.
These reflections represent the author’s personal views and do not necessarily align with those of Nasdaq, Inc.
