The incredible potential of artificial intelligence (AI) has helped power strong gains for tech stock this year. On the other hand, valuations for many AI stocks have recently pulled back, and some top players in the space continue to trade at significant discounts compared to previous highs.
With the artificial intelligence revolution still just starting to unfold, now could be a great time to build long-term positions in companies that are positioned to win big from this century's most transformative tech trend. If you're aiming to capitalize on the rise of AI, read on to see why two Motley Fool contributors identified these top companies as top buy-and-hold plays right now.
AI will power new growth phases for Amazon
Keith Noonan:Thanks to its incredible technology and resource advantages, I think that Amazon(AMZN 0.74%) has a very good chance of being one of artificial intelligence's biggest winners. With the stock still down 24% from its high and multiple AI tailwinds on the horizon, now looks like a smart time to load up on the tech giant.
The rise of artificial intelligence looks poised to help the company's profit-driving Amazon Web Services (AWS) segment enter a renewed growth phase. As the largest player in the cloud infrastructure space, Amazon has more customers than any of its competitors. It also has access to more data. Because data is the fuel that helps power and improve artificial-intelligence models, Amazon has an important advantage in the AI race. But Amazon is hardly resting on existing laurels when it comes to AWS.
For years, the company has been designing custom chips to power customers' artificial intelligence software through its cloud data centers. It's also rolling out software tools to make AWS a go-to destination for building and expanding AI software. Through Amazon Bedrock, customers are able to take advantage of existing large language models that can be customized to their needs and used to create, run, and scale artificial-intelligence applications.
Even better, I believe AI has the potential to radically improve profitability for the company's online retail operations.Last year, the company's e-commerce focused North America and International business segments accounted for $433.9 billion of the company's $514 billion in sales. At the same time, these segments posted a combined operating margin of -2.4% and an operating loss of $10.6 billion.
As AI opens the door for improved warehouse automation and autonomous delivery services, Amazon should be able to reduce operating costs as a percentage of revenue for its e-commerce business. With the massive sales base for its online-retail business, even relatively modest improvements to operating margins in e-commerce stand to make the overall business far more profitable. Artificial intelligence could be the key to turning Amazon's online retail empire into a massive profit generator.
Netflix is using AI to help you find content to binge-watch
ParkevTatevosian: Artificial intelligence can be implemented in many forms, including large language models, driverless technology, and recommender systems. One growth stock that benefits from the rising effectiveness of artificial intelligence is Netflix(NFLX 1.96%). Better recommender systems keep users engaged for longer, increasing the likelihood they keep their Netflix subscription. Fortunately for investors, the stock is not prohibitively expensive.
With abundant content, Netflix aims to highlight the most relevant content for each subscriber. If it is successful at this task, people will get more value from their subscriptions and stay subscribed. Moreover, those folks would be willing to pay the inevitable price increases Netflix will try to implement over the coming years. Netflix increased revenue from $8.8 billion to $31.6 billion from 2016 to 2022. Helping subscribers derive more value could help the company grow sales further.
I am usually unimpressed with revenue growth unless it results in improved profitability. Netflix is not one of those businesses with unprofitable growth. Indeed, in the same years mentioned earlier, Netflix's operating income jumped from $380 million to $5.6 billion. Given the gain on the top line, it would be reasonable to expect Netflix to boost profits further from these levels. AI can also help Netflix allocate content budgets more effectively by highlighting the films and series most likely to succeed.
In my opinion, Netflix stock is moderately priced at a forward price to earnings of 28. Consumers prefer to watch their content over streaming connections, adding millions of new subscribers annually. There is a good likelihood that if you buy Netflix stock now and hold it for the very long term (a decade or more), it will cause an increase in your wealth.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Keith Noonan has no position in any of the stocks mentioned. Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon.com and Netflix. The Motley Fool has a disclosure policy.
And with its profits growing quickly along with its client base, long-term investors who buy this AI leader's shares today should be well rewarded. Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Microsoft, Nvidia, and Palantir Technologies
Palantir Technologies
The company has three main projects: Palantir Gotham, Palantir Apollo, and Palantir Foundry. Palantir Gotham is an intelligence and defense tool used by militaries and counter-terrorism analysts. Its customers included the United States Intelligence Community (USIC) and United States Department of Defense.
https://en.wikipedia.org › wiki › Palantir_Technologies
The Motley Fool has positions in and recommends Alphabet, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft.
As a leading AI based trading platform, WienerAI also has a research tool that is powered by artificial intelligence to provide users with insightful data and analysis that can guide their investment decisions.
“SoundHound (Nasdaq: SOUN), a global leader in conversational intelligence, offers voice AI solutions that let businesses offer incredible conversational experiences to their customers.
Neil Rozenbaum has positions in Alphabet, Amazon, and Palantir Technologies. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, Nvidia, and Palantir Technologies.
DeepMind is probably the best current AI that we know about, given the current win in Go. There are countless other AI's being used today in government and industry that we don't know about. IBM's suite of narrow AI under the Watson family has many applications where it might be quicker and better than DeepMind.
Dr Fei-Fei Li is a leader in AI that has made critical contributions to the development of machine learning (ML), computer vision, and natural language processing. Dr Li co-founded and led the ImageNet project, a massive dataset of labelled images that revolutionized deep learning research in computer vision.
These have several investment algorithms related to thousands of potential trading contexts. Overnight, probability is shared with traders and this has a success rate of 60% or more.
OpenAI is a privately held company. This means only accredited and institutional investors can invest in the company before its IPO. Investors seeking exposure to OpenAI can invest indirectly via venture funds and investment syndicates, or purchase shares directly on pre-IPO marketplaces like Hiive.
The average price target for C3ai is $30.55. This is based on 13 Wall Streets Analysts 12-month price targets, issued in the past 3 months. The highest analyst price target is $40.00 ,the lowest forecast is $20.00. The average price target represents 15.76% Increase from the current price of $26.39.
The 43 analysts offering price forecasts for C3.ai have a median target of 25.22, with a high estimate of 50.00 and a low estimate of 13.00. The median estimate represents a 100.27 difference from the last price of 25.29.
We regularly see similar ads from the Motley Fool about “all in” buy alerts, sometimes also called “double down” or “five star” buys, and they're generally just the type of steady teaser pitch that they can send out all year, over and over with no updates, to recruit subscribers for their flagship Motley Fool Stock ...
The Motley Fool has positions in and recommends Alphabet, Amazon, Chewy, Fiverr International, Fortinet, Nvidia, PayPal, Salesforce, and Uber Technologies. The Motley Fool recommends the following options: short June 2024 $67.50 calls on PayPal. The Motley Fool has a disclosure policy.
"We found that these AI models significantly outperform traditional methods. The machine learning models can predict stock returns with remarkable accuracy, achieving an average monthly return of up to 2.71% compared to about 1% for traditional methods," adds Professor Azevedo.
Introduction: My name is Lakeisha Bayer VM, I am a brainy, kind, enchanting, healthy, lovely, clean, witty person who loves writing and wants to share my knowledge and understanding with you.
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