The artificial intelligence (AI) hype is fueling the market to new highs. As per a report from PwC, AI could contribute $15.7 trillion to the global economy by 2030. And the greatest economic gains will be in China and North America. Nasdaq and S&P 500 hit new highs driven by the soaring “Magnificent Seven”. If you are not investing in the multibagger AI stocks, you are missing out on big gains.
These companies continue to dominate the market and remain the best in the industry. However, other AI companies are overlooked right now and could become multi-baggers in the long term. If you missed the chance to own one of the Magnificent Seven, you can still buy AI stocks that are set to grow.
Let’s take a look at three AI stocks that are multi-baggers in the making. These companies have made big moves in 2023 and could be on a roll this year.
Palantir Technologies (PLTR)
An emerging leader in the big data space, Palantir Technologies (NYSE:PLTR) sold its products to the government for many years. However, after it announced the AI platform (AIP), changes began for the company.
To promote the platform, the tech company offered boot camps which helped convert the leads into clients. Palantir Technologies managed to close 103 deals worth at least $1 million in the fourth quarter. Also, the management mentioned that there was a backlog of bootcamps. These may continue to drive revenue growth.
The success of its AI platform has helped PLTR stock soar 158% in the year and 26% year-to-date (YTD). Trading at $22 today, the stock has pulled back lately.
The company is integrating AI across its products and services. Also, the surge in commercial clients is further proof of the platform’s success. Palantir Technologies saw a 70% surge in U.S. commercial revenue in Q4, leading to a 19% stock surge.
For the first quarter, management is aiming for revenue in the range of $612 – $616 million, up from $608 million in Q4. Palantir Technologies is set to report results on May 6.
Generating significant revenue from government contracts, a Palantir Technologies investment can be a safe way to dip your toes into AI. Thus, it’s one stock that can double your money by 2025.
Advanced Micro Devices (AMD)
The biggest competitor of Nvidia (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD) is leaving no stone unturned to grow its market share. After launching MI300X, the company recently unveiled new chips to beat the competition.
Calling them the most powerful chips for business PCs, the company said that its Ryzen Pro 8040 processors and Ryzen Pro 8000 processors are built with the latest nanometer technology.
Also, AI-enabled PCs can help improve the market for desktops and laptops. Further, the company has strong financials and reported a revenue of $6.17 billion in Q4 with an EPS of 77 cents. For this year, it is aiming for AI chip sales of $3.5 billion.
Already, AMD has won the confidence of some of the biggest companies. Specifically, Microsoft (NASDAQ:MSFT) and Meta Platforms (NASDAQ:META) have shown interest in using the MI300X accelerator microchips. Several companies lack time and resources to wait for Nvidia’s chips. So, they consider its biggest competitor, AMD.
Trading at $152 today, AMD is up 69% in the year and 7% YTD. With increasing AI demand, the company could see higher revenue growth. TD Cowen analyst has a price target of $200 over the next 12 months with a buy rating.
Oracle (ORCL)
An overlooked AI stock, Oracle (NYSE:ORCL) has a rich history as legacy software developer. The company is making the most of the AI revolution. Expanding capacity at the current data centers, it stands ready for tremendous growth over the next five years. The company will invest $8 billion through 2034 in Japan for AI infrastructure and cloud services.
Additionally, Oracle has global expansion plans, striking a partnership with Microsoft to build 100 new data centers. This will help meet the rising demand for Microsoft’s Azure. The union extends across multiple countries. Also, Oracle has entered into a partnership with Palantir to provide cloud infrastructure and AI solutions to companies.
And, another interesting partnership with Nvidia allows both companies to join forces to run Nvidia’s applications on Oracle cloud infrastructure. These partnerships show Oracle’s potential and ability to offer solutions that meet changing industry demand.
Oracle reported impressive growth in Q3 results with a revenue of $13.3 billion, up 7% year-over-year (YOY), and an operating income of $3.8 billion. Its backlog was up 29% and stood at $80 billion, a record high.
Therefore, I’m optimistic that the company will beat expectations in the upcoming results. Trading at $115, ORCL stock looks undervalued to me and could become a multi-bagger in the next five years.
On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.