Last year witnessed a massive surge in the artificial intelligence (AI) market following the debut of OpenAI’s ChatGPT, reigniting enthusiasm for this cutting-edge technology. Numerous tech companies swiftly shifted their focus towards this emerging field to secure a share of the lucrative $200 billion market.
The AI industry is rapidly evolving. Data from Grand View Research forecasts a staggering 37% compound annual growth rate (CAGR) until 2030, propelling the market valuation towards nearly $2 trillion. Consequently, it comes as no surprise that investors are increasingly drawn to this sector. The buzz around AI contributed to a 67% surge in the Nasdaq-100 Technology Sector index in 2023, creating a substantial number of millionaires in the process.
This market’s momentum shows no signs of decelerating. AI holds the potential to revolutionize a multitude of sectors, including cloud computing, e-commerce, consumer goods, autonomous driving, gaming, and more. Thus, there is still ample opportunity to invest in AI and reap significant rewards from its long-term development.
Below, you’ll find three AI stocks with the potential to generate substantial wealth this April.
1. Nvidia
It should come as no surprise to find Nvidia (NASDAQ: NVDA) featured on this list, given its dominant position in the AI chip market last year. In 2023, Nvidia captured an estimated 90% of the AI graphics processing units (GPUs) market, essential for training and running AI models.
Nvidia’s extensive experience in GPUs provided it with a significant advantage in the AI landscape compared to many competitors, resulting in a 214% surge in its stock price over the past year, accompanied by impressive earnings growth.
In its latest quarter (Q4 of fiscal 2024, ending in January), the company witnessed a remarkable 265% year-over-year revenue increase to $22 billion. Operating income also soared by 983% to almost $14 billion. This remarkable growth was predominantly fueled by a 409% uptick in data center revenue, reflecting a surge in AI GPU sales.
The immense potential of AI implies a continued rise in chip demand, suggesting that Nvidia is poised to capitalize on substantial gains within the industry.
Viewing the NVDA Price to Free Cash Flow Chart…
As displayed in the chart above, Nvidia’s price-to-free-cash-flow ratio and price-to-earnings (P/E) ratio experienced a significant decline over the past year, indicating that the stock is currently positioned at one of its most attractive valuation levels in the last 12 months. Consequently, now presents an opportune moment to…
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