The Unseen Power of Artificial Intelligence
Artificial Intelligence (AI) is no longer a concept of the future, it’s a reality of the present. Its influence is seen in every industry, from healthcare to aviation, and its potential is limitless. The rise of AI has given birth to companies that are not just changing the game, but creating a new one altogether.
One such company is Nvidia. In its early days, Nvidia was a modest player, its value was comparable to that of Intel, and its primary role was to assist Microsoft in designing Direct3D processors. The concept of Graphical Processing Units (GPUs) was still a distant dream.
Fast forward to today, Nvidia has evolved into a titan. Its GPUs have become indispensable for video gaming and editing, and are now a crucial element for machine learning and the AI revolution. The company’s shares have skyrocketed, increasing nearly 200-fold since 1999.
However, identifying such winners is not an easy task. For every Nvidia that flourishes, countless others falter. This is why experts often advise investing in more stable AI picks, like robotics company Teradyne, which have proven products and profits.
But the allure of finding the next Nvidia-like winner is irresistible. A single successful pick can offset multiple losses. For instance, an investment in Nvidia could have transformed a $50,000 10-stock portfolio into $1 million, even if the other nine picks plummeted to zero.
Let’s explore five companies that have the potential to replicate Nvidia’s success.
Archer Aviation (ACHR)
In June, Joby Aviation’s shares surged 61% after receiving approval from the Federal Aviation Administration (FAA) to begin testing its electric vertical takeoff and landing (eVTOL) aircraft. However, its high share price may limit future gains.
Enter Archer Aviation. Archer is revolutionizing air mobility with its innovative electric air taxi. The vehicle can transport four passengers and a pilot, reaching speeds of up to 150 miles per hour over a range of 60 miles. Archer has also partnered with Safran SA, a French aircraft company that has been experimenting with automated aircraft and autonomous navigation assistance for flying taxis. Safran will produce the components for Archer’s flying vehicles.
This partnership suggests that Archer is already thinking beyond regular eVTOLs. Personal flying vehicles will require significant AI to make them usable by ordinary people. Even professional pilots will need AI assistance to navigate increasingly crowded skies. If Archer plays its cards right, it could quickly leverage AI to outperform Joby.
IonQ (IONQ)
Imagine the possibilities if we combine artificial intelligence with quantum computing. The results, according to SAP research project director Laure Le Bars, will be astounding. Quantum computing will make AI exponentially faster at complex tasks, making everything from optimization to weather modeling to password cracking effortless.
IonQ is a leading player in the quantum computing world. It has positioned itself as the first mover in the quantum revolution and expects to double its bookings next year. IonQ has surged ahead by using atomic ion qubits, a technique that has proven more reliable than competing qubit platforms.
While IonQ is pricey from a fundamental perspective, its high potential upside makes it a bet worth considering.
iCAD (ICAD)
iCAD is a leading image-analysis company that aids healthcare providers in detecting cancers in mammograms. The company’s AI-powered analysis tools significantly reduce the error rate in cancer detection.
Despite being unprofitable in 34 of the past 37 years and showing no growth, iCAD could be on the verge of a turnaround. The company is benefiting from the rising awareness of AI’s power and has recently partnered with Radiology Partners, the nation’s largest radiology practice. Additionally, new leadership under CEO Dana Brown, an industry veteran with experience in turnarounds, could provide the boost iCAD needs.
Evolv (EVLV)
Evolv Technologies is revolutionizing the way we detect hidden weapons. By using AI to analyze radio frequency (RF) waves at sensor gates, Evolv’s product can differentiate between weapons and other metallic devices. This makes its Express Screens roughly 10 times faster than traditional metal detectors.
Evolv is a hypergrowth firm with its products found in various venues, from stadiums to casinos. Analysts predict a 53% rise in revenues in 2024 and a doubling of gross profits to $54.2 million.
International Business Machines (IBM)
International Business Machines (IBM) is another company poised to make significant strides in the AI space. Since 2019, IBM has divested 17 legacy businesses and made over 30 acquisitions. One of the most impactful acquisitions was Red Hat, which IBM acquired in 2019 for $34 billion. IBM has since integrated its Watson AI with Red Hat, creating an opportunity to cross-sell AI products.
IBM’s profits have been on the rise since 2021, and it’s believed that this overlooked company will become a dominant leader of the AI boom.
Conclusion
The AI revolution is here, and it’s creating a divide between those who can harness its power and those who will be replaced by it. The five companies mentioned above are just a glimpse into the vast AI opportunities that lie ahead. The future of AI holds immense promise, but it also poses significant challenges. It’s crucial to be on the right side of the divide.
