As per the experts, the artificial intelligence market size has been pegged at USD 136.55 billion in 2022. This is expected to compound at 37.3% over 2023 to 2030. The rigorous research and innovation done by the tech majors are increasing the adoption of advanced technologies across several industry verticals including automotive, healthcare, retail, finance, and manufacturing.
For instance, in November 2020, Intel Corporation made the acquisition of Cnvrg.io, which is an Israeli company and develops and operates a platform for the data scientists to run machine learning models, to support the growth prospects of its artificial intelligence business. Technology has always been a critical element for such industries. However, introduction of artificial intelligence helped in bringing technology to the centre of organizations. For example, self-driving vehicles and crucial life-saving medical gear continue to infuse AI virtually in every apparatus and program.
Artificial intelligence has proven to be a revolutionary element. Renowned companies such as Amazon.com, Inc., Google, Apple Inc. etc. continue to invest significantly in the R&D of AI. Such companies continue to work to make artificial intelligence more accessible for the global companies.
Apart from this, several companies continue to adopt AI technology so that better customer experience can be achieved. In March 2020, McD made huge technology investment of USD300 million as it acquired an AI start-up Tel Aviv. This was done to offer personalized customer experience by using AI.
With this in mind, let’s have a look at these Artificial Intelligence stocks:
3 Artificial Intelligence Stocks You Need to Buy
- Palantir Technologies Inc.
- Amazon.com, Inc.
- Lemonade, Inc.
1. Palantir Technologies Inc.
The company offer organizations with solutions to manage large disparate data sets in a bid to gain insight and drive operational outcomes. The company has been selected by the Defense Information Systems Agency (DISA) to aid coordination between federal and commercial licensees of the 3450 – 3550 MHz spectrum band.
In 1Q23, the company was profitable and it plans to be profitable each quarter through year-end. The company posted GAAP net income of $17 million, with GAAP income from operations coming at $4 million, exhibiting margin of 1%, up 1,000 bps year-over-year.
For 2Q23, the company expects revenue of $528 million – $532 million and adjusted income from operations of $118 – $122 million.
For FY23, it expects revenue in the range of $2.185 – $2.235 billion and adjusted income from operations of $506 million – $556 million.
2. Amazon.com, Inc.
Amazon is leading online retailer and has been categorised as one of the highest-grossing e-commerce aggregators.
Amazon Web Services (AWS) has announced about the launch of AWS Israel (Tel Aviv) region. With this launch, developers, startups, entrepreneurs, enterprises, government, education, and nonprofit organizations will have greater choice for running their applications. They will be able to serve end users from data centers which are located in Israel, through the use of advanced AWS technologies to support innovation.
Net sales of the company saw an increase of 9% to $127.4 billion in 1Q in comparison to $116.4 billion in 1Q22. If we exclude $2.4 billion unfavorable impact as a result of year-over-year changes in forex throughout the quarter, net sales went up by 11% against 1Q22.
Operating income of the company grew to $4.8 billion in 1Q in comparison to $3.7 billion in 1Q22, with net income coming at $3.2 billion.
For 2Q, the company expects net sales of between $127.0 billion-$133.0 billion, or to increase between 5%-10% in comparison to 2Q22. This guidance expects unfavorable impact of ~30 basis points because of foreign exchange rates. Operating income of the company should be between $2.0 billion- $5.5 billion against $3.3 billion in 2Q22. These guidance numbers assume that there will be no additional business acquisitions, restructurings, or legal settlements.
3. Lemonade, Inc.
Lemonade Inc carries out its operations in the insurance industry by offering digital and AI-based platform for several insurances and for settling claims or paying premium amounts. The company’s platform makes sure that there is transparency when it comes to issuing policies and settling disputes.
The company has announced its partnership with General Catalyst (GC), which is a leading venture firm and early investor in Lemonade. This alliance was established to create Synthetic Agents, a novel financial structure which can help in unlocking growth without cash depletion. Lemonade has healthy unit economics – investments which are made in customer acquisition tend to get typically repaid 3 times over – but initial CAC payback might take couple years.
Coming at top line, at $687 million, in-force premium (IFP) saw a significant year-over-year growth of 50%. The company’s 55% quota share program was reupped and oversubscribed and ceding commissions are expected to be roughly equivalent to those which are under the outgoing agreements. In effect from July 1, 2023 for standard term of 12 months, the company stated that renewed 55% quota share enables the company to continue to operate in capital-light manner.
The company has raised its guidance for 2H23. For 3Q23, in force premium at September 30, 2023 is expected between $703 – $706 million, while revenue expected in the range of $102 million- $104 million. For FY23, it expects gross earned premium of $654 million – $658 million and revenue between $402 million – $408 million. Capital expenditures are expected to be ~$12 million for the full year.
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