Investors have been on edge for the past two years. The three major indexes fell into bear territory in 2022, but rebounded in 2023 as growth stocks soared. But it wasn't until about a month ago that the S&P 500 hit a new all-time high, confirming that the bull market was indeed here.
The bull market didn't just start; it's been going on ever since stocks started recovering from bear market lows. Bull markets are always declared long after they start, but they usually last many years, so there's still plenty of time for investors to benefit. And one of the best ways is to invest in stocks associated with growth, as they often grow in bullish environments.
As one of today's fastest growing markets, artificial intelligence (AI) has a lot of great potential. The global AI market has experienced double-digit growth over the past decade, and it is predicted that it could exceed $1 trillion by 2030. With this technology potentially revolutionizing everything from business to daily life, he has three stocks in particular that could come out on top. Here are my monster AI growth stocks to buy fist-to-hand in the new bull market.
Amazon (NASDAQ:AMZN) has made AI a top priority at its cloud computing business, Amazon Web Services (AWS). Cloud Business is working on all three of his “layers” of AI. This includes providing AI chips to companies building their own large-scale language models (LLMs), offering a fully managed selection of existing LLMs that can be customized for companies that don't want to build their own LLMs, and This includes delivering applications such as new AI-powered applications. assistant.
This strategy makes AWS the “go-to” destination for clients looking to incorporate AI into their businesses. And since AWS is already the global cloud market leader, the customers are already there. AWS just needs to offer customers the right mix of products and services.
Amazon predicts that generative AI will generate tens of billions of dollars in revenue over the next few years. AWS is already a major revenue driver for Amazon, and the future is definitely bright for this business unit.
Amazon stock currently trades at a forward P/E ratio of 41x, up from 56x just a few months ago, making it a solid buying opportunity for this top growth stock.
Nvidia (NASDAQ:NVDA) The company was originally a gaming giant, selling graphics processing units (GPUs) that produced the vivid images and action that gamers loved. But in recent years, it has become clear that GPUs can also be used in many other fields, thanks to their ability to process multiple tasks simultaneously. This is how GPUs became indispensable for AI, where high speed is essential.
Nvidia's chips currently dominate the AI market with over 80% share, and this leadership is contributing to the company's revenue growth. In the most recent quarter, revenue increased by triple digits and net income increased by more than 1,000%.
But Nvidia's success doesn't look like a one-time deal. On the contrary, this momentum is likely to continue thanks to the high demand in the AI market and considering his leadership of Nvidia and investment in research and development.
NVIDIA stock currently trades at just 33 times forward earnings estimates, even though it has soared 200% over the past year. This is an absolute steal for a company driving the AI era.
3. Palantir Technologies
Palantir Technologies (NYSE:PLTR), like Nvidia, didn't start out as a commercial AI giant. Instead, for many years, software-as-a-service companies were known for providing services to governments. Palantir is an expert in aggregating vast collections of data and analyzing that data to draw conclusions that are important to specific client operations.
Just last year, Palantir launched its Artificial Intelligence Platform (AIP). It helps clients use generated AI and proprietary data to make better decisions and improve processes. The company combined this with an AI bootcamp or session to introduce the service to potential customers.
The effort paid off. Palantir CEO Alex Karp wrote in his recent letter to shareholders that AIP has been a “significant contributor” to revenue and customer growth.
Importantly, AI provides Palantir with significant commercial market benefits and reduces its dependence on government contracts. In the most recent quarter, US commercial revenue increased by 70% and US commercial customer numbers increased by 55%.
At 73 times forward earnings, Palantir stock may seem expensive, but given that the company is in the very early stages of its AI story, I expect further earnings growth. And that means it's still a great stock to buy empty-handed and hold for the long term.
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John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool's board of directors. Adria Cimino has a position at his Amazon. The Motley Fool has positions in and recommends Amazon, Nvidia, and Palantir Technologies. The Motley Fool has a disclosure policy.
My 3 Monster AI Growth Stocks to Buy Hand Over Fist in the New Bull Market was originally published by The Motley Fool