Consider Ditching Nvidia and Investing in These Stocks Predicted to Bolster Wealth?
Nvidia has been a fiery investment in the market over the past couple of years, with its semiconductor giant shares soaring due to the surge in demand for AI chips in data centers. This remarkable rise has made some investors quite wealthy in the last decade. For instance, an initial investment of $3,700 in Nvidia stock a decade ago is now worth over a million dollars.
Smart investors who invested that amount in Nvidia stock at the time and held onto it have likely amassed wealth. The company's growth has been solidified by AI, serving as a potential booster for its future success as well.
Despite Nvidia's massive market cap of nearly $3.6 trillion, replicating its past decade's returns in the future seems challenging. Investors seeking the next significant growth stock for their portfolio might want to explore other companies still in their growth phase and poised to seize lucrative market opportunities.
Two such promising companies include:
AI software demand could propel this company's growth potential
The demand for AI software is projected to skyrocket in the future. According to ABI Research, the AI software market could experience a staggering annual growth rate of 30% up until 2030, culminating in an annual revenue of $391 billion at the end of the forecast period. Investing in C3.ai (AI: 2.76%) could enable investors to capitalize on this substantial opportunity.
C3.ai specializes in enterprise AI software solutions for customers, and its business has been thriving in recent quarters. The company's revenue increased by 21% year over year to $87 million in the first quarter of fiscal 2025 (ending July 31). This growth surpassed the 11% revenue growth recorded in the same period the previous year, indicating an expansion in customer base and increased business.
Intriguingly, C3.ai signed 71 agreements during the quarter, marking a significant increase of 122% from the previous year. Additionally, the company entered into 52 new pilot projects, a jump of 117% from the past year. Notably, C3.ai's business relies heavily on partnerships with major cloud computing providers like Alphabet's Google, Amazon, and Microsoft.
More specifically, 51 of its agreements last quarter were through partners, jumping by 155% from the same period the previous year. The company recorded 40 agreements solely through Google Cloud. C3.ai offers its suite of enterprise AI tools through partners, enabling businesses to construct, deploy, and scale generative AI applications to enhance processes across various industries.
The success that C3.ai is achieving with its partnership model sheds light on their focus on improving this channel further. They recently extended their partnership with Microsoft, making C3.ai's entire suite of enterprise AI applications available on the Azure Marketplace. Both companies will collaborate on product development and marketing, which should help C3.ai expand its presence in the enterprise AI software sector.
According to C3.ai's press release, the agreement "establishes C3 AI as a preferred AI application software provider on Microsoft Azure." This development incited a positive response from investors due to the potential for accelerated growth in the future.
C3.ai anticipates a $382.5 million revenue in fiscal 2025 at the midpoint of its guidance range, representing a 23% increase over fiscal 2024. Analysts forecast the company to maintain a robust double-digit revenue growth rate throughout the next few years.
The possibility of C3.ai recording faster revenue growth cannot be dismissed, considering the pilot projects it is involved in, its presence on major cloud platforms, and the explosive growth in the demand for AI software. As a result, investors may want to consider buying and holding C3.ai stock for the long-term, given its potential to yield healthy returns and contribute to a million-dollar portfolio.
This company is outperforming giants in the digital advertising space
The digital advertising market is currently substantial, generating an estimated $680 billion in revenue last year. By 2028, this market's size is projected to surpass $965 billion, with further growth expected in the years following. Tech giants like Alphabet, Meta Platforms, and Amazon dominate this vast sector, accounting for over 60% of global digital ad revenue last year.
However, one company is giving these heavyweights a run for their money. The Trade Desk (TTD -2.23%) provides a programmatic advertising platform that empowers marketers and brands to automate their ad inventory purchases, optimize campaigns, and enhance audience targeting in real time using data.
The company's income during the first three quarters of 2024 climbed by 27% to hit $1.7 billion. Similarly, its earnings per share soared by the same percentage point, reaching $1.07. Meanwhile, Meta Platforms experienced a 22% earnings boost in the same time frame. Google's ad income, conversely, recorded a 11% increase throughout the first nine months of the year.
In light of this, The Trade Desk has managed to snatch a substantial share from its larger competitors in the digital ad sector. This trend isn't shocking, given the rapid expansion of programmatic advertising within the digital ad sphere. Market analyst TechNavio predicts that the programmatic ad market could yield an additional $725 billion between 2024 and 2028, with an annual expansion rate surpassing 38%.
As a result, The Trade Desk appears to be embarking on a steady growth trajectory that could maintain substantial expansion for an extended period. Experts estimate that the company's revenue will surge beyond 26% in 2024 to reach $2.46 billion, with further growth anticipated over the next few years.
Since its initial public offering nearly a decade ago, The Trade Desk's stock has provided remarkable returns. An initial investment of $100 has ballooned into over $4,100 during this time.
The vastness of the digital ad market and the handsome revenue potential of programmatic advertising have been widely recognized. Given this scenario, The Trade Desk's impressive growth is likely to persist beyond the next two years. With the right strategy, it could repeat its extraordinary growth in the long term, making it an excellent candidate for a substantial investment portfolio.
Investors looking for potential growth in the AI software market might want to consider investing in C3.ai, given its projected annual growth rate of 30% up until 2030 and its partnerships with major cloud computing providers.
Despite The Trade Desk's relatively small size compared to digital advertising giants like Alphabet, Meta Platforms, and Amazon, it has managed to grow its income by 27% in the first three quarters of 2024, outperforming its competitors in the programmatic advertising market.
