Most investors are familiar with the artificial intelligence (AI) usual suspects. Semiconductor powerhouses like Nvidia and software companies like Microsoft have soared recently thanks to the market's enthusiasm for AI stocks, and they can very well continue to fly higher.
However, there are other AI stocks that have the potential for exponential growth in the coming years. Growth investors with their eyes on AI stocks, therefore, will want to pay particular attention to Nano-X Imaging (NNOX 1.64%), Riskified (RSKD 3.82%), and Rubrik (RBRK 5.90%).
NASDAQ: NNOX
Key Data Points
A sketch of this innovative medical imaging upstart
It doesn't happen often, but when innovations in radiology emerge, they often represent a seismic shift. And that's exactly what Nano-X Imaging, or Nanox, is attempting to accomplish. The company's Nanox.ARC is a revolutionary X-ray imaging device that is smaller, simpler, and more affordable than traditional X-ray machines. Deployment of the Nanox.ARC system has proceeded slower than management initially expected, but the company is making progress, deploying systems in five states in 2023. With respect to AI, Nanox provides AI solutions for interpreting patients' scans. Dubbed Nanox.AI, the company's FDA-cleared AI solutions help to identify patients at risk of several ailments, including coronary artery disease, musculoskeletal disease, and fatty liver.
AI superpower Nvidia, itself, is an investor in Nanox, which gives it some street cred, but there are still risks inherent with an investment in Nanox as there's no certainty that the company will gain widespread adoption among healthcare providers. Investors should gain better insights when it reports second quarter financial results on Aug. 20. Should it report greater deployment of its Nanox.ARC systems, the market will certainly take notice.
In the fight against fraud, AI is a powerful weapon
While many companies have jumped on the AI bandwagon only recently, Riskified has been employing AI solutions for more than a decade. Debuting on the markets with its initial public offering (IPO) in July 2021, Riskified characterizes itself as the "only publicly held AI fraud and risk intelligence company." In other words, Riskified helps e-commerce companies -- with its AI tools -- reduce operating expenses and improve customer experiences. The companies that Riskified counts as its customers represent a veritable who's who of industry leaders -- from electronics leaders like Acer to footwear leaders like Steve Madden to furniture retailers like Wayfair.
Although founded back in 2012, Riskified still has a massive market opportunity. In 2023, for example, Riskified reviewed more than $123 billion in gross merchandise volume (the gross total dollar value of orders reviewed through its risk intelligence platform). This is a fraction of the estimated $5.8 trillion in global e-commerce sales in 2023 and projected $7.9 trillion in global e-commerce in 2027.
Reporting free cash flow of $3.7 million for the first time in the third quarter of 2023, Riskified generated free cash flow of $7.1 million in Q4 2023 and $10.5 million in Q1 2024. With no debt and rising free cash flow, Riskified represents a massive growth opportunity that offers a lower degree of risk.
AI to the rescue for those in need of data recovery
Celebrating a little more than three months on the public market, Rubrik is a cybersecurity specialist that held its IPO in April. The company offers a comprehensive solution for organizations looking to protect their data through Rubrik Security Cloud. Built on a zero-trust architecture, Rubrik Security Cloud protects data at whatever level it exists: across the enterprise, in the cloud, and in software-as-a-service (SaaS) applications. Because its architecture combines data and metadata, Rubrik is able to better recognize data security threats and provide sophisticated data recovery with the assistance of AI and machine learning.
A reliable green flag for Rubrik is growth in its annual recurring revenue (ARR), a sign that customers are embracing Rubrik's subscription model. And Rubrik has this in spades. In the first quarter of 2025, Rubrik reported ARR of $856 million, representing year-over-year growth of 46%. Should Rubrik extend its ARR growth through fiscal 2025 and make progress toward generating positive free cash flow, shares of the cybersecurity specialist should rise.
Are these artificial intelligence stocks intelligent buys right now?
Semiconductor manufacturers are certainly a valid way to invest in AI, but there's more than one way to skin the AI cat. Nanox, Riskified, and Rubrik are all embracing AI in various ways to enhance their offerings to customers. For investors with the greatest tolerance for risk, Nanox represents a tremendous growth opportunity. Those who are more conservative, on the other hand, will want to consider Riskified as it is already generating free cash flow. And investors with an interest in cybersecurity will certainly want to investigate Rubrik further.
