It is projected that artificial intelligence (AI) will contribute significant value to the world economy by generating cost reductions and increasing productivity in the near future. Investors stand to potentially earn substantial profits by investing in the correct stocks.
While some AI stocks As the stock market fluctuates and distinguishes between successful and unsuccessful companies, investors can increase their chances of success by putting their money into leading technology companies that are already experiencing an increase in demand for their products or services.
Here are two affordable stocks, priced under $200, that are experiencing growth due to the rise of artificial intelligence.
Palantir Technologies is a company.
Palantir Technologies is a company that specializes in data analysis and software development. ( PLTR 2.01% ) The AI software platforms of the company are experiencing rapid growth. While the company is recognized for its connections with the U.S. Department of Defense and intelligence organizations, its increasing number of business partnerships highlights the significant worth of its AI platform. This indicates that the company’s stock has the potential to be successful in the long run.
Palantir experienced a 27% increase in revenue from subscription services in the second quarter compared to the previous year. This marks a significant improvement from the 13% growth in Q3 2023, with the company’s quarterly growth steadily increasing over the past year.
The government’s income has continued to increase rapidly by 23% annually, totaling $371 million in the second quarter. However, Palantir has seen a significant growth in its U.S. commercial customer base, which almost doubled in the past year, leading to U.S. commercial revenue of $159 million in the last quarter.
Palantir is currently entering into agreements with companies in various sectors such as healthcare and consumer products. Recently, the company inked a long-term partnership with Cleveland Clinic to implement Palantir in additional hospitals over the next decade. Additionally, it broadened its existing agreement with… General Mills The company that produces Cheerios is cutting costs by $14 million every year with the help of Palantir.
The range of Palantir’s software capabilities is demonstrated by these agreements. While the majority of its earnings have come from the U.S. government, Palantir is establishing itself as a feasible choice for major global entities. The business has significant potential for substantial growth in the future.
The key point to note is that Palantir is a successful company, making a net profit of $134 million in the second quarter. Although the stock has experienced fluctuations in recent years, it is expected to mirror the business’s overall long-term growth trajectory.
2. Arm Holdings is a company that specializes in the design of computer processors and semiconductor technology.
Arm Holdings ( ARM 1.72% ) Arm is a prominent player in the semiconductor sector worldwide. Almost all smartphones across the globe are equipped with Arm-designed processors. There is a significant growth potential for Arm in the data center industry, especially as cloud firms enhance their infrastructure to accommodate artificial intelligence technologies.
One key aspect to grasp about Arm, which explains why it is a smart investment, is that the company earns money by licensing its chip products to other semiconductor companies and manufacturers.
Additionally, once a product is licensed, the company receives royalties for each unit of processors that are shipped and utilize its technology. These royalties are typically calculated as a percentage of the average selling price of the chip.
It can be inferred that Arm has a highly profitable business model. In the latest quarter, the company reported an adjusted operating profit of $448 million from $939 million in revenue, resulting in an impressive margin of 47%.
Arm’s Armv9 chip technology is currently responsible for 25% of its revenue and is being widely accepted, indicating promising prospects for future earnings from royalties. Apart from smartphones, there is a high demand for Armv9 in cloud computing, with Arm’s presence in the cloud market increasing to 15% over the past two years. Additionally, Arm is expanding its market share in automotive, consumer electronics, and networking devices.
AI-optimized data centers use specialized equipment, giving Arm a competitive edge. Arm is focusing on assisting manufacturers in creating tailor-made chips, leading to its growing presence in the cloud industry.
Arm has very promising opportunities for growth within the $600 billion market. The sector that produces semiconductors. The recent decrease in the stock’s value presents investors with a chance to purchase shares at a more affordable rate.
