Not surprisingly, many high-quality AI stocks have risen to sky-high valuations. Nevertheless, there are still gains to be made on this trend. If you have got a bit of money available to take a position straight away that you simply need not cover your bills or for other contingencies — even when it’s as little as $200 — purchasing these three AI stocks now could strengthen your portfolio over the long haul.
Within the third quarter, its revenue jumped 30% 12 months over 12 months to $729 million while its operating margin was a solid 38%. The corporate also generated free money flow of $435 million.
The rapid adoption of Palantir’s Artificial Intelligence Platform (AIP) drove the 39% year-over-year expansion of the corporate’s customer base to 629 within the third quarter. That included a 77% jump in business customers. Unlike several competing AI platforms that focus totally on model development, AIP has prioritized developing ontologies — i.e., frameworks that establish relationships between digital assets and real-world applications.
Hence, relatively than expending resources on models, that are getting commoditized, Palantir’s strategy has helped it to rapidly implement AI solutions in production environments across use cases.
For one final point within the stock’s favor, Palantir was also recently added to the S&P 500 index. Considering its multiple tailwinds and its increased liquidity, the stock could appreciate significantly in the approaching months.
Within the third quarter, its revenue jumped 89% 12 months over 12 months to $25.1 million. Management expects to report revenue within the $82 million to $85 million range for 2024 and has guided for a variety of $155 million to $175 million for 2025. Moreover, the corporate expects to convert a bookings backlog value greater than $1 billion into revenue in the following six years.
SoundHound has also succeeded in reducing its overreliance on a number of customers. While a single customer contributed almost 72% of its revenue in 2023, that very same client accounted for under 12% of revenue in 2024’s third quarter. Plus, while its top five customers contributed 90% of revenues in 2023, they accounted for under 33% of its 2024 third-quarter revenue.
The rapid adoption of SoundHound’s voice AI and conversational intelligence solutions across the restaurant and automotive industries, amongst others, has helped reduce the corporate’s customer concentration risk.
SoundHound also differentiates itself from competitors with its proprietary Polaris foundational model, which leverages billions of real conversations and thousands and thousands of hours of audio across dozens of languages, collected over the past 20 years. Polaris helps improve the accuracy of its offerings while also controlling hosting costs. Now powering one-third of the corporate’s AI interactions for restaurant industry clients, Polaris could emerge as a robust growth catalyst in the approaching years.
The corporate is just not without risks as an investment. Along with its elevated valuation, SoundHound has a money balance of just $136 million, which seems tight relative to its high money burn rate. The corporate posted a net GAAP lack of nearly $92 million in the primary three quarters of 2024. Considering these challenges, astute investors could be well advised to choose up only a small stake on this stock, allowing them a probability to take part in its upside potential, but limiting their downside risk.
With a 35.8% share within the robotic process automation (RPA) market, UiPath (NYSE: PATH) is a dominant player in its space. Not surprisingly, the corporate stands to be one in every of the important thing beneficiaries of the explosive growth in that market, which Grand View Research forecasts will expand at a compound average rate of 39.9% from 2023 through 2030.
UiPath has built an intensive partner ecosystem that features technology giants akin to Amazon, Microsoft, SAP, and Alphabet, and this has opened it as much as recent business expansion opportunities. Moreover, the corporate differentiates itself from competition by offering low-code tools for automation across each legacy systems and recent applications, which helps its clients avoid vendor lock-in. Plus, UiPath offers enterprise-grade governance services to administer automation agents, people, and models.
It is also helping clients construct, maintain, and deploy automation agents — thereby targeting the greenfield agentic automation space. Agentic automation involves the usage of software agents that may take autonomous actions based on insights provided by large language models, generative AI technologies, large motion models, and other AI tools.
Market research firm IDC expects the agentic labor automation market to expand from zero in 2023 to almost $4.1 billion by 2028. UiPath’s agentic automation offering has already generated strong customer interest — greater than 1,000 organizations have already signed up for personal previews of this agent builder.
Although the corporate’s stock crashed by about 48% in 2024 due partially to leadership changes and reduced revenue guidance, the rapidly evolving agentic automation opportunity could drive a revival within the share price in the approaching years.
UiPath’s recent financial and operational numbers have also been quite healthy. As of the newest quarter, ended Oct. 31, the corporate had a solid balance sheet with $1.6 billion in money and nil debt. It also posted a solid 17% year-over-year jump in annual recurring revenue to $1.6 billion and achieved a 97% customer retention rate.
Given the backdrop of its healthy business and evolving opportunities, UiPath could possibly be an appealing pick for retail investors.
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*Stock Advisor returns as of December 30, 2024
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Idiot’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Idiot’s board of directors. Manali Pradhan has no position in any of the stocks mentioned. The Motley Idiot has positions in and recommends Alphabet, Amazon, Microsoft, Palantir Technologies, and UiPath. The Motley Idiot recommends the next options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Idiot has a disclosure policy.
3 No-Brainer Artificial Intelligence (AI) Stocks to Buy for 2025 With $200 Right Now was originally published by The Motley Idiot