In 2023, Nvidia has been a standout performer, but 3 AI Stocks Poised for Greater Growth Than Nvidia, Wall Street suggests that it may not be the only AI stock set to shine in the coming months. Should investors follow Wall Street’s lead and consider these three AI stocks for their portfolios? While it’s important to acknowledge the potential risks, particularly the profitability concerns as none of these companies are currently profitable, there are compelling reasons for the more aggressive investors to explore these opportunities.
Each of these companies demonstrates strong AI technology capabilities and operates in promising markets. SoundHound AI, Schrodinger, and Symbiotic could be intriguing contenders to outperform Nvidia in the ever-evolving world of AI. It’s worth noting that while the integration of artificial intelligence is becoming ubiquitous, not every company is equally poised to harness its full potential. Two companies that stand out as potential beneficiaries of the AI revolution are Atlassian and Cloudflare.
3 AI Stocks Poised for Greater Growth Than Nvidia
SoundHound AI: Unveiling Hidden Potential
Wall Street has its eyes set on SoundHound AI, with an average 12-month price target indicating an astonishing potential for over 160% growth. While some might find this optimism surprising given Sound Hound’s roller-coaster performance this year, Wall Street remains bullish on the company’s voice AI technology’s future prospects.
SoundHound itself shares this optimism, reporting a remarkable 42% year-over-year revenue growth in the second quarter of 2023. Projections suggest that full-year revenue could increase by nearly 50%, with a strong presence in auto manufacturing and restaurants, boasting clients such as Honda, Hyundai, Oracle Food and Beverage, Beef O’Brady’s, White Castle, and more.
Schrodinger: Unleashing the Power of AI in Drug Discovery
Schrodinger (NASDAQ: SDGR) is another AI stock on Wall Street’s radar, with a 12-month price target that exceeds the current stock price by almost 90%. The company’s appeal extends beyond analysts, attracting attention from prominent investors like Cathie Wood’s Ark Genomic Revolution ETF and the Bill & Melinda Gates Foundation Trust.
Schrodinger stands out for its application of AI in drug discovery, with a platform that rapidly identifies promising molecules for testing, ultimately reducing the cost of new drug development. Additionally, Schrodinger collaborates with major pharmaceutical companies, including Bristol Myers Squibb and Eli Lilly.
Symbotic: Revolutionizing Warehouses with AI-Powered Robotics
Symbotic (NASDAQ: SYM) has been one of the AI success stories in 2023, witnessing an astounding surge of nearly 160% in its stock value. Wall Street’s outlook remains positive, with an average price target suggesting potential growth of nearly 80%.
Symbotic addresses the evolving challenges of managing modern warehouses with a cutting-edge AI-powered robotic technology. Among its notable clients, Walmart is a major partner and stakeholder, while other industry giants like Albertsons, C&S Wholesale Grocers, and Target also rely on Symbotic’s warehouse automation solutions.
In July 2023, Symbotic embarked on a joint venture with SoftBank to tap into the lucrative $500 billion-plus warehouse-as-a-service market, a deal valued at around $7.5 billion over six years.
Atlassian: AI Enhancing Productivity
Atlassian, renowned for products like Jira and Confluence, is at the forefront of integrating AI into its offerings. The company’s virtual assistant, Atlassian Intelligence, is currently in early access and holds substantial promise in enhancing user productivity.
What sets Atlassian apart is its AI assistant’s ability to tailor output based on individual customer data, a far cry from generic results. This feature proves invaluable to customers utilizing Confluence as a knowledge base, as it can leverage institutional data throughout Atlassian’s product suite.
Beyond enriching its product portfolio, AI integration can accelerate Atlassian’s transition from software licenses to subscription-based software. While this shift may temporarily impact short-term profits, recurring subscription revenue is expected to provide greater predictability and stability. Furthermore, cross-selling cloud versions of its software becomes more feasible, given the seamless integration between Atlassian’s products.
Despite challenges posed by the macroeconomic landscape, Atlassian’s growth remains impressive, with a 24% year-over-year increase in revenue. The company’s commitment to AI features could potentially sway customers and contribute to future growth.
Cloudflare: Powering AI Inference and Storage
Cloudflare’s developer platform, housing various serverless computing products, is well-positioned to make a significant impact in the AI inference market. While AI model training demands robust AI accelerators, model inference can often run on more modest hardware. Cloudflare aims to capture this market, believing it will surpass the AI training sector in size.
One of Cloudflare’s innovations, Constellation, enables customers to execute machine learning models directly on the company’s edge network. This feature, albeit in private beta, allows for the utilization of pre-trained and customer-trained models for tasks such as text translation, sentiment analysis, image classification, and question answering.
Beyond AI inference, Cloudflare’s R2 object storage product offers an economical solution for storing AI-generated content. Unlike traditional cloud platforms that bill for bandwidth, Cloudflare offers bandwidth without additional charges.
While Cloudflare’s AI endeavors are still in their early stages, its ability to meet the demand for rapid, cost-effective AI inference tasks and storage is a compelling reason to keep an eye on this AI-driven stock.
In conclusion, 3 AI Stocks Poised for Greater Growth Than Nvidia the AI landscape is rife with opportunities, but not all companies are equally positioned to capitalize on this technological revolution. SoundHound AI, Schrodinger, and Symbiotic are AI stocks to watch, each with its unique strengths and potential. Additionally, Atlassian and Cloudflare stand out as promising investments with their distinctive roles in the AI ecosystem. Investors should carefully consider their risk tolerance and investment goals before following in Wall Street’s footsteps.
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