Artificial intelligence (AI) excitement appears to be driving the stock market higher. Here are the stocks that Wall Street sees as his AI winners. Nvidia or super microcomputerwhich has doubled in value over the past year and whose parabolic journey has made investors extremely wealthy.
Perhaps the next big move toward AI will be companies looking to integrate AI technology to better their businesses. Stocks in this category include: UiPath (NYSE:Pass) and Monday.com (NASDAQ: MNDY) remind. These two stocks have performed well over the past 18 months, and could continue to rise even further.
1. UiPath: Accelerate with AI
UiPath is a great example of how artificial intelligence is positively impacting a company’s business model. UiPath is a leader in robotic process automation (RPA). The software can observe, learn, and automate repetitive office tasks such as filling out and filing documents, managing interfaces, and sending correspondence. UiPath has been in business since the early 2000s, so the product has improved with widespread technology improvements, especially over the past decade.
Currently, UiPath implements AI in all three phases of RPA: discovery, automation, and operations. During the company’s fourth-quarter earnings call, management highlighted research that showed demand for AI-powered automation among 70% of executives surveyed. In other words, utilizing AI to improve business efficiency may become a major theme.
UiPath’s revenue growth accelerated from the beginning of last year, ending the year with 24% year-over-year growth.
The business is highly profitable, with analysts expecting profits to grow an average of 35% annually over the next three to five years. With a current forward P/E of just 45, UiPath could be a bargain if it can meet analyst expectations. As a publicly traded company, the company has exceeded analyst forecasts every quarter and has a promising future.
Better-than-expected performance, AI tailwinds, and a cheap starting valuation? UiPath could deliver big returns in the coming years.
2. Monday.com: Change your work environment
Monday.com is rethinking how its employees collaborate, and the addition of generative AI could be a game-changer for the company. Monday.com is cloud-based collaboration software. You can think of it like your work operating system. Rather than working through a number of disparate apps, employees can work seamlessly on Monday.com through a dashboard that can be updated in real time.
The company is adding AI powered by OpenAI and Azure to create ChatGPT-like bots within Monday.com’s platform. Users can ask bots to quickly generate questions, task ideas, and other content.
The company has become more profitable over time. Approximately 28% of revenue is free cash flow.
Will stock prices follow a parabolic curve from here? Monday.com currently has a market cap of $10 billion and trades at just over 11 times earnings. This is a notable discount compared to some of the hottest AI stocks on the market. Palantir Technologies (sales 19 times) cloud strike (19x sales), Nvidia (20x sales). Monday.com, like CrowdStrike, is growing its revenue at a faster pace than Palantir. Indeed, Nvidia is in a group on its own.
There is an argument that Wall Street is asleep on Monday.com. The company must continue to prove its worth by exceeding analyst expectations in the coming quarters. If AI can help his Monday.com do that, perhaps Wall Street will look at stocks in a new light.
Monday.com is small enough but growing fast enough that a positive change in sentiment could send its stock price skyrocketing.
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Justin Pope has a position at Monday.com. The Motley Fool has positions in and recommends CrowdStrike, Monday.com, Nvidia, Palantir Technologies, and his UiPath. The Motley Fool has a disclosure policy.
“2 Artificial Intelligence (AI) Stocks That Could Go Parabolic” was originally published by The Motley Fool.
