Many companies use the term "artificial intelligence" (AI) to generate hype, but few of them successfully integrate AI to grow their business. AI will soon be everywhere, and companies that heavily rely on it today could prosper for the next decade. 

Both Upstart Holdings (UPST 14.99%) and UiPath (PATH 0.32%) have used AI to drive their businesses. With their huge success so far and their massive market opportunities, buying these two AI powerhouses before the new year could be a smart move. 

four people holding up sparklers for the 2022 new year.

Image source: Getty Images.

1. Upstart: Redefining credit

Upstart is using artificial intelligence to redefine how banks determine creditworthiness for loans. Instead of relying mainly on Fair Isaac's (FICO 1.87%) FICO score, Upstart provides banks with a score that relies on thousands of data points to evaluate potential loan customers. It has 31 banks giving out loans based on the company's determinations, and that count has nearly tripled over the course of this year. 

Besides its banking customer count, nearly every financial metric Upstart reports is growing by triple-digit percentages. Third-quarter revenue increased 250% from the year-ago quarter to $228 million; transaction volume topped $3.1 billion, growing 244% year over year, and net income jumped 200% to $29 million.

The company has kept default rates at less than 0.5% of its volume, and it can automatically approve 67% of loan applications, showing how accurate its AI is becoming.

Because it recently launched an auto loan business, Upstart Auto, its AI performance might temporarily look weaker in the coming quarters as it learns the auto loan industry and obtains more data.

The stock price is down 46% from its recent highs, despite the company showing tremendous success, so buying now could be an appealing buying opportunity. And Upstart is forecasting another exemplary fourth quarter, with guidance for revenue of $260 million, which would be 14% growth sequentially and 225% year over year.

Clearly, the company expects amazing growth that could continue in the coming quarters, and with the addition of auto loans, Upstart is looking at an addressable market surpassing $4.5 trillion.  

Upstart is still very young, and if it can continue gaining customers, amassing data, and refining its AI model, it could continue growing in 2022 and beyond. 

2. UiPath: Taking AI mainstream

UiPath wants to fully automate businesses with its robotic process automation (RPA), which can be used for tasks ranging from simple compliance or validation to complex application building, where it works independently. These bots are saving businesses millions of hours, and UiPath has attracted NASA and Alphabet among its customers. 

The company is the market leader in the RPA space, according to Gartner, and its financials reflect that. In the quarter that ended July 31, revenue grew 40% to $196 million and annual recurring revenue was up 60% to $727 million. Losses were nearly $100 million, but this is because the company is ramping up to capitalize on what it sees as a $30 billion opportunity by 2024.

This means the company has realized less than 3% of its total opportunity. As the market leader, it wants to spend now to develop new products and obtain new customers to take advantage of the growth of its industry. UiPath doubled spending on research and development in its latest quarter compared to a year ago, aiming to remain the leader in its field and capitalize on it over the next five years. 

Being a high-growth company is not without risk. It has $1.8 billion in cash to subsidize its losses, but if UiPath falters on its growth strategy and cannot generate profits or positive free cash flow in the next few years, it could sink.

And it has a strong rival in Automation Anywhere, its closest competitor, which plans to go public within the next year. It could use cash from its initial public offering to buy its way into the lead in this market. 

So UiPath is spending today to obtain customers and deepen its relationships with them, using its leadership edge to capitalize on its rapidly expanding market.

With so much growth in just three years, waiting to invest in UiPath could be costly, which is why now is a good time to buy the stock.