3 AI stocks to watch with huge long-term potential

Artificial intelligence is undeniably an ongoing theme in the stock market. Its potential overshadows most sectors of the market due to its potential to revolutionize certain industries. The sector promises efficiency, innovation and cost-effective solutions, providing investors with opportunities to grab AI stocks with long-term potential.

According to CompTIA’s IT Industry Outlook 2024, approximately 22% of US technology professionals surveyed highlighted that they are already aggressively pursuing AI integration. Another 33% are already implementing with limited capacity. That shows the continued adoption and future growth of artificial intelligence.

The next question now is: which stocks should you bet on? I believe it is always best to consider industry leaders and recognize the potential opportunities they present. So when we pick our top three, we’re looking at the best-performing AI stocks with long-term potential.

In this article, I have selected the three highest weighted stocks in the sector Wisdom Tree Artificial Intelligence and Innovation Index and sorted them based on annual revenue (YTD). Investors who own these stocks get exposure to AI and can sleep well at night knowing that barring catastrophe, they can hold them for more than a decade.

Metaplatforms (META)

This photo illustration shows the Meta logo on a smartphone and the Facebook logo in the background

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Metaplatforms (NASDAQ:META) owns social media and messaging platforms such as Facebook, Messenger, WhatsApp and Instagram. The company is a technology juggernaut that has made significant efforts to invest in AI tools and applications through its FAIR (Fundamental AI Research) research team. The project aims to promote AI through open research, to everyone’s benefit.

In addition to research, the company has two major language models. The first is LLaMA, which was intended for non-commercial use. The second language model has a very creative name: LLaMA 2.

With LLaMA 2, individual developers and enterprises can use the second-generation language model to create numerous commercial applications that can drive the development of AI in this field.

Looking at the financials, Meta reported revenue growth of 16% year-on-year (YOY) for FY’23. Diluted earnings per share also grew by 73%. This excellent result has translated into a strong price performance of more than 43% since the beginning of the year.

With a strong position on social media platforms and innovative AI research, Meta is one of the best AI stocks with long-term potential.

ARM holding companies (ARM)

ARM company logo or ARM Holding plc logo on smartphone hardware.  is a British semiconductor and software design company owned by the SoftBank group

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Snapdragon is a popular processor for Android mobile devices. ARM companies (NASDAQ:ARM) is the semiconductor intellectual property company that owns and manufactures Snapdragon CPUs and has IP for product development across devices.

ARM offers AI-ready product families with scalable and highly versatile AI-optimized platform architecture. The products and platforms enable high efficiency and performance across all devices to run machine learning workloads. These include:

  • Cortex CPUs: Today’s leading and best-in-class CPU in power efficiency.
  • Ethos NPUs: NPUs are optimized for machine learning inference in IoT, automotive, infrastructure, and other industry segments across performance, space, and energy economics.
  • Mali GPUs: GPUs that target workloads associated with graphics-intensive machine learning and that require high performance for applications in the video, gaming, and imaging domains.

The company debuted on Nasdaq last September 14, 2023, with an excellent reception by investors.

With its IPO initially priced at $51.00 per share, ARM Holdings continued to rise as investors gambled on its potential during this AI boom. ARM’s share price is already up more than 43% since the beginning of the year.

Astute investors may have noticed that ARM’s net profit fell 52% this quarter, but for good reason. The company saw costs rise as it expanded its engineering and sales staff to ramp up production and research.

ARM’s solid presence in the technology sector and its foray into AI products are good growth indicators. So add ARM to your list of AI stocks with long-term potential.

Nvidia (NVDA)

Nvidia (NVDA) investment growth and profit trading concept.  Nvidia company logo on smartphone screen against blurred background of trading stock chart

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Is anyone even remotely surprised by that? Nvidia (NASDAQ:NVDA) is on a list of the best AI stocks with long-term potential?

The company is one of the biggest winners of the AI ​​revolution. Its proprietary GPU technology, including CUDA, and the endless application of generative AI took data center sales to new heights. That excellent growth cemented its position as a clear leader in the industry, which could continue until the technology matured.

Nvidia also has a strong portfolio of products outside the AI ​​market, such as its RTX and older GTX gaming GPU lines.

While others argue that there is little room for growth for NVDA, I disagree. CompTIA’s research shows that approximately 22% are pursuing AI integration alone, and 45% are still exploring AI adoption. This underlines the fact that the AI ​​market has room for growth, and Nvidia, as the de facto leader, will certainly grow along with it.

Nvidia’s fiscal 2024 results were worth their weight in gold. The company reported a 126% increase in sales and gross margins rose 15.8 points to 72.7%. All this culminated in a huge increase of 581% and 586% in net profit and diluted earnings per share respectively.

The good news had tangible share price implications, as NVDA stock has grown 72% since the start of 2024. The amazing results and continued integration of AI across industries make Nvidia a must-have stock for anyone looking to increase exposure to AI. their portfolio.

As of the date of publication, Rick Orford had (neither directly nor indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication Guidelines.

Rick Orford is a Wall Street Journal bestselling author, investor, influencer and mentor. His work has appeared in leading publications including Good Morning America, Washington Post, Yahoo Finance, MSN, Business Insider, NBC, FOX, CBS and ABC News.