The AI Dominators: 5 Stocks That Could Become the Next Trillion-Dollar Plays On Tuesday, May 21, former hedge fund manager – and current Global Macro Specialist at InvestorPlace - Eric Fry will reveal what he believes is the next $1 trillion AI stock during a special strategy session. This revolutionary company could hand you up to 40 years of Nvidia Corp. (NVDA)-type gains in a matter of months... if you use the strategy Eric will tell us more about on Tuesday.
The company is upending a $13.1 trillion industry...
Its services could be used by as many as 3.8 billion people...
And its name is...
Well.
You know I can’t say that here.
But you can find out by clicking here to see reserve your spot for his presentation.
In the meantime, our top writers at InvestorPlace.com – our free news and analysis websitef –today take a look at five AI dominators they believe could become trillion-dollar companies over the next decade. These might not go up as high or as quickly as Eric’s stock, of course. But I want to talk about these firms today to give you a sense of how quickly the AI Revolution will upend existing businesses, and why you need to reserve your spot for Eric’s strategy session immediately. AI Dominator No. 1: Arm Arm Holdings PLC (ARM) is a U.K.-based chip designer that produces a rival standard to the traditional x86 architecture. It’s a simpler, more power-efficient chip design that's now found in almost 99% of battery-powered computing hardware, including smartphones, tablets, and Internet of –Things (IoT) devices.
Arm’s architecture is also modular; large clients like Apple Inc. (AAPL) and Qualcomm Inc. (QCOM) can turn chip features on and off as needed. As Faisal Humayun notes for InvestorPlace.com this week, this attribute has recently given ARM an enormous edge in custom AI chips, which are requiring increasing amounts of customization: An important point to note is that Arm has moved away from general-purpose CPUs to products catering to specific industries. The company offers AI-enabled CPUs for mobile, consumer electronics, IoT, automobile and cloud & networking. Therefore, the addressable market is significant, and royalty revenue will continue to swell. With the stock relatively undiscovered, it’s a good time for exposure. Humayun believes shares could triple over the next two years as Arm architecture expands from smartphones into servers and PCs.
In addition, Arm’s royalty rates are also on the rise. Its most recent V9 standard has more than twice the blended royalty rate of past versions. That means revenues will grow even faster over the long run as older chip models are eventually phased out, making Arm a potential trillion-dollar company hiding in plain sight. ADVERTISEMENT  Forget about Nvidia, ChatGPT, or any popular AI stocks you might have heard from the media.
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Click here to see the details and save your seat for this free strategy session. AI Dominator No. 2: Qualcomm The shift to Arm architecture is also helping Qualcomm Inc. (QCOM) win market share in AI.
Qualcomm is the world’s largest maker of smartphone processors – a mature market that saw shipments shrink 4% last year. Qualcomm itself saw revenues decline as much as 23% as end customers drew down existing inventories.
However, the chipmaker’s experience with Arm’s customizable architecture has suddenly vaulted it back to growth. As Marc Guberti summarizes in an InvestorPlace.com article this week: Qualcomm is enabling leading on-device AI capabilities. Those tailwinds can change the tide. It was only a few quarters ago when Qualcomm reported double-digit YoY revenue declines, so the recent earnings report shows a positive development. The effect is particularly strong in automotive. In March, Qualcomm’s management announced that revenues from its automotive segment had risen 35%, compared to a 1% rise in smartphone chip sales. Cars are becoming more computationally reliant, and Qualcomm’s Snapdragon Ride chips are giving Nvidia’s offerings a run for their money.
Qualcomm is also seeing some early successes in PC chips, thanks to its 2022 acquisition of Nuvia, a chip-designing firm that specialized in the compute-intensive chips that Qualcomm lacked. The company's Snapdragon X Elite has already won several notable contracts, and will prominently feature in the next generation of AI PCs.
It might take another several years for Qualcomm to beat the incumbents in servers or automotive applications. But once change begins in earnest, history tells us that Qualcomm can dominate markets in the blink of an eye. AI Dominator No. 3: Broadcom Broadcom Inc. (AVGO) is an aggregator of networking and wireless chip companies. Years of smart acquisitions have turned the San Jose, California-based firm into an industry powerhouse, and it now sells everything from acoustic resonators to virtualization software. Broadcom's latest acquisition was a mammoth $69 billion purchase of VMware in 2023.
Financial returns have been excellent, thanks to the company’s wise use of capital and growing demand for high-speed networking solutions. Operating margins of 45% are some of the highest in the tech industry. ADVERTISEMENT  These two genius fintech guys locked in a 669% gain on NVIDIA. Now they say something bigger is here.
Open your free presentation now AI Dominator No. 4: Adobe Adobe Inc. (ADBE) is the undisputed leader in content creation software. Its products span photo editing (Photoshop), video-making (Premiere Pro), document files (Acrobat PDF), and more. Many credit the firm with revolutionizing the world of digital art.
Today, the groundbreaking firm is at it again. In 2023, Adobe began experimenting in Photoshop, allowing generative AI to automatically fill in areas based on user commands. And the company has since released increasingly powerful versions of this software. Users can now fine-tune and improve AI-based content in ways not possible on rival platforms like Midjourney or OpenAI’s Dall-E.
Joey Frenette, at InvestorPlace.com, also notes that Adobe is branching out into other AI-related areas: More recently, the firm made a big splash in the realm of AI video generation and editing. From text-to-video to AI-assisted video editing in Premier Pro, it’s clear Adobe wants a big piece of the AI creative market. All of this suggests any existential threat from generative AI is overblown. Microsoft Word won’t disappear overnight because ChatGPT is writing homework assignments... and neither will Photoshop or Premiere Pro simply because Dall-E can pump out images. AI-generated content needs editing, fine-tuning, and customization, and Adobe provides the software needed to turn these AI drafts into professional-quality products. ADVERTISEMENT  Inflation UP! Mortgage rates UP! Gas prices trending UP!
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See how here… AI Dominator No. 5: ServiceNow Our final AI dominator today was going to be my top choice of IT specialist. But it’s hard to choose between AI-forward software companies. Oracle Corp. (ORCL) is an AI leader in finance... Salesforce Inc. (CRM) in customer relations management... Workday Inc. (WDAY) in human capital management (HCM)... the list goes on. No matter where you look, AI-focused firms are dominating their respective industries.
So, I'm suggesting ServiceNow Inc. (NOW), the company that sits on top of all these processes. The company’s NOW Platform interfaces with disparate vendors, allowing enterprises to select the best solutions without increasing the amount of maintenance work. And as Mohammed Saqib explains in an InvestorPlace.com article this week: The company continues to make significant strides in helping enterprises automate and optimize its operations. It boasts an impressive client roster that includes 85% of the Fortune 500 companies. Also, ServiceNow’s platform is a critical tool for businesses looking to enhance efficiency and implement digital transformation strategies. The result, so far, has been excellent. Sales at ServiceNow rose 23% in 2023, while operating profits increased roughly 30%. Analysts expect similar growth rates through 2027 as demand continues to grow.
ServiceNow itself is also a leader in generative AI. In 2023, the company became one of the first software firms to release enterprise-focused AI solutions, according to analysts at Morningstar. And it's already earning extra revenues from these offerings from higher list prices. Though NOW shares trade at a significant premium, the company seems set to grow into these valuations... and then some... over the next decade. The Next Trillion-Dollar AI Company In 2016, InvestorPlace’s Louis Navellier had a message for his subscribers: Buy Nvidia stock. The GPU maker was generating blowout earnings, and he believed the chipmaker warranted a place in his Growth Investor portfolio. (Amazon.com Inc. [AMZN] was the other addition that month.)
The effect on his portfolio was immediate. Within the first year, NVDA shares had risen over 200%. Many other investors would have sold out and run off with their profits.
But AI would put Nvidia on a new growth path. Louis has continued to hold shares, and the stock has since risen from a split-adjusted $36 to well over $900... a 26-fold return!
The same forces are now turbocharging the next generation of AI stocks... and Eric believes he’s found one that could do even better than Nvidia.
He’s going to tell us more about that on Tuesday, May 21, at 7 p.m. during a special strategy session.
Click here to sign up for that presentation and reserve your spot.
And I’ll see you here next week Thomas Yeung, CFA
Markets Analyst, InvestorPlace.com | | |
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