Three AI Stocks with Strong Potential for Long-Term Growth
Retiring a millionaire is a dream for many investors, and it requires consistent investing with the right stocks. While investing in the broader market can help achieve this goal, buying individual stocks, particularly in the artificial intelligence (AI) sector, can provide even greater returns. AI stocks have gained immense popularity due to their potential for unprecedented growth.
In the current market, there are several highly valued AI stocks, but three stand out as strong candidates for beating the market in the long term. These stocks offer reasonable valuations and have promising growth prospects.
1. Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL)
Alphabet has been heavily investing in AI for quite some time. One of its key AI tools is the Gemini generative AI model. This model represents the next evolution in search engine technology. Unlike traditional search engines, Gemini summarizestopics for users, enhancing their search experience.
Although Alphabet initially faced challenges from Microsoft’s Bing, which launched a similar AI model, Gemini has significant potential. The model recently launched a new update that outperforms human experts in language understanding tests and specialized areas like reasoning, math, and code. While Alphabet is yet to recognize revenue from this product, it is expected to come in the following years as more companies adopt the Gemini platform. With a reasonable valuation (trading at 22 times forward earnings), Alphabet presents a great opportunity for investors looking to accelerate their path to becoming a millionaire.
2. UiPath (NYSE: PATH)
UiPath specializes in robotic process automation (RPA) software, which automates repetitive tasks, freeing up employees to focus on more creative and complex work. To ensure accurate automation, UiPath utilizes AI tools to mine data within businesses and identify tasks that can be automated.
UiPath’s solution has gained popularity, leading to rapid expansion. In the third quarter of FY 2024, the company’s annual recurring revenue increased by 24%, reaching $1.38 billion. Moreover, the global RPA market is projected to reach $66 billion by 2032. With UiPath trading at a reasonable 10 times sales, it is a compelling investment choice.
3. Airbnb (NASDAQ: ABNB)
While Airbnb may not immediately come to mind when thinking about AI stocks, the company has been leveraging AI technology to enhance its platform. The introduction of an AI model has helped Airbnb address its past reputation for party houses by analyzing booking factors to identify potential party locations.
Additionally, Airbnb acquired GamePlanner.AI, a company that developed undisclosed AI technology. Led by the creators of Apple’s Siri voice assistant, GamePlanner.AI adds further depth to Airbnb’s AI capabilities. With Airbnb’s focus on integrating AI into its offering and its attractive price-to-free cash flow ratio, the company represents a strong investment opportunity.
These three companies are at the forefront of AI integration and are poised to outperform the market in the years to come. By investing in these stocks, investors can potentially accelerate their journey to becoming millionaires.
Disclaimer: The Motley Fool Stock Advisor analysts have identified the 10 best stocks to buy now, and Alphabet is not among them. However, the selected stocks have the potential to deliver significant returns in the future. The Stock Advisor service provides investors with a blueprint for success, including portfolio-building guidance and regular analyst updates. Since 2002, the service has tripled the return of the S&P 500.
Suzanne Frey, an executive at Alphabet, serves on The Motley Fool’s board of directors. Keithen Drury holds positions in Airbnb, Alphabet, and UiPath. The Motley Fool has positions in and recommends Airbnb, Alphabet, Apple, Nvidia, and UiPath.
