Do you think artificial intelligence could boost your portfolio right now? You are right. But what AI stocks beyond the usual suspects: Alphabet Inc. (NASDAQ:GOOG)AApple Inc. (NASDAQ: AAPL), Twilio Inc. (NYSE: TWLO), ServiceNow, Inc. (NYSE: NOW), NVIDIA Corporation (NASDAQ: NVDA) and QUALCOMM Incorporated (NASDAQ: QCOM).
Whether you think some of the famous companies above are bearish and/or overvalued (another argument for another day) or you’re just looking to inject some new blood into your portfolio, let’s review some options you might consider.
But first, in the interest of education, what are AI stocks and which should you be considering right now? Let’s find out.
What are artificial intelligence (AI) actions?
At its most basic level, artificial intelligence (AI) refers to a dynamic algorithm or machine that learns and interprets data given to it. AI mimics the learning abilities of humans and applies them in a wide variety of capabilities, from machine learning to the Internet of Things (IoT), autonomous vehicles, virtual assistants, and smart home appliances. AI stocks come from companies that drive AI.
Global Artificial Intelligence (AI) Market Revenue is Expected to Grow 16.4% Year-over-Year in 2021 to $327.5 Billion, According to International Data’s Worldwide Semiannual Artificial Intelligence Tracker Corporation (IDC). By 2024, AI is expected to generate over $500 billion.
A few quick facts from IDC data:
- The software category accounted for 88% of total market revenue in 2020.
- AI applications took the largest revenue share at 50% in 2020.
- The AI software platform market will have a compound annual growth rate (CAGR) of 32.7%.
- AI system infrastructure software will have a five-year CAGR of 13.7%.
AI can work in your life in ways you never imagined, including through tax assistance, portfolio risk management through your brokerage, quantitative trading strategies, automated savings plans (think acorns) and even banking advice. All of these suggestions only scratch the surface.
Consider These 3 AI Actions to Get Results
Ready to bulk up your portfolio with AI stocks? Let’s find out what you might want to add.
Upstart Holdings Inc. (NASDAQ: UPST)
Upstart Holdings Inc., headquartered in San Mateo, California, is a cloud-based artificial intelligence (AI) lending platform that aggregates consumer loan demand and connects it to its network of the company’s AI banking partners. The platform connects consumers, banks and institutional investors through a shared lending platform.
There’s good news all around: In 2021, Upstart more than tripled its revenue, tripled its profits, tripled the number of banks and credit unions on its platform, and tripled the number of car dealerships it serves.
Its total revenue was $228 million, a 250% increase over the third quarter of 2020 and total fee revenue was $210 million, a 235% increase year over year (YoY). Its banking partners issued 362,780 loans, totaling $3.13 billion across all platforms in the third quarter, up 244%. Last year. Adjusted net income was $57.4 million, down from $12.3 million as well.
What happens in the pipeline? Upstart forecasts revenue of $255-265 million, net income of $16-20 million and adjusted net income of $48-50 million.
Splunk Inc. (NASDAQ: SPLK)
Splunk Inc., headquartered in San Francisco, develops and markets software solutions. Its products include Splunk Cloud, Splunk Light and Splunk Enterprise. According to its site, the Splunk platform breaks down the barriers between data and action and enables teams to ensure that their organizations (including information technology operations, security, IoT, l analytics, business analytics industries) are secure, resilient and innovative.
Splunk just celebrated its first billion dollar cloud quarter – cloud accounting served 68% of its software money generation. The company ended 2021 with 635 customers, up 43% from a year ago.
In Q3, Cloud ARR was $1.11 billion, up 75% year over year and total ARR was $2.83 billion, up 37% from one year to the next. Cloud revenue was $243 million, up 68% year over year, and total revenue was $665 million, up 19% year over year.
The company expects big things for the fourth quarter: cloud ARR is expected to be between $1.325 and $1.350 billion, with total ARR expected between $3.085 and $3.135 billion and total revenue between 740 and 790 million dollars.
Meta Platforms Inc. (NASDAQ: FB)
Okay, we kind of cheated by suggesting Meta Platforms Inc., but that’s the AI impression that can’t be denied. Meta Platforms Inc., headquartered in Menlo Park, California and formerly known as Facebook Inc., is a global social technology company that goes beyond social media applications and into virtual reality products and augmented via mobile devices, personal computers and other platforms. Its Family of Applications (FOA) segment includes Facebook, Instagram, Messenger and WhatsApp and the Reality Labs (RL) segment includes hardware, software and consumer content related to augmented and virtual reality.
Total fourth-quarter revenue is expected to hit the $31.5 billion to $34 billion mark, though it reflected challenges in light of Apple’s iOS 14 changes as well as factors related to macroeconomic indications and COVID-19.
For the third quarter of 2021, Meta Platforms reported revenue of $29.01 billion, up 35% year-over-year. Net income rose 17% to $9.2 billion (or $3.22 per diluted share). Analysts expected Meta to post revenue of $29.58 billion and EPS of $3.19
Facebook had 2.91 billion monthly active users worldwide, up 7% year-over-year but flat from 2020. Facebook, Instagram, Messenger, WhatsApp saw year-on-year increases of 12 %, up 70 million quarter-on-quarter.
Consider AI for your next big move
Why add AI to your portfolio? Easy. Artificial intelligence is surfacing in almost every tech-related business: automotive, financial, industrial, tech, healthcare, and more. The auto industry and digital assistants should continue to deliver on their promise to make everyday life easier and better (think about that the next time you ask Alexa to do something for you). Follow the AI boom, but always consider your personalized investment strategy in advance.