Nine months into the year, the stock market is red-hot. The S&P 500, Nasdaq Composite, and Dow Jones Industrial Index are all at or near all-time highs.
Undoubtedly, one of the reasons why is the artificial intelligence (AI) boom.
Let's examine two AI stocks that have already made a few fortunes and have the potential to make many more in the years to come.
Image source: Getty Images.
1. Meta Platforms
When it comes to AI, size and scale matter -- and no social media company has a greater scale than Meta Platforms (META +0.76%).
NASDAQ: META
Key Data Points
As of the end of the second quarter, Meta had nearly 3.3 billion daily active users (DAUs). That's a huge advantage for the company in many ways, but consider this: Meta is in a position to introduce its AI-powered features to roughly 40% of the world's population.
That may not guarantee success, but it's a great start.
As for the tools themselves, the company has developed several, under the banner of Meta AI, powered by its Llama 3.1 model:
- Image generation
- Problem solving
- Search capabilities
- Research
- Smart glasses
Crucially, the technology is designed to integrate with Meta's family of apps. For example, users could ask Meta AI to generate a picture of them standing in front of the Eiffel Tower, which they could then post to Instagram or Facebook. Similarly, a user might ask Meta AI to suggest some recipe ideas for an upcoming potluck dinner -- then post the ideas for those who are looking for inspiration.
Whether Meta AI will take off remains unknown. But in any event, Meta remains a stock that could continue making millionaires for many years to come. The company's massive user base is generating tremendous amounts of ad revenue and profits -- much of which it is returning to shareholders via stock buybacks and its recently instituted dividend. That makes Meta a stock that investors shouldn't ignore.
2. Palantir Technologies
Oftentimes, it can be best to avoid overthinking in investing. That's why I must suggest Palantir Technologies (PLTR +3.40%) as an AI stock that could make you a millionaire.
NASDAQ: PLTR
Key Data Points
The company's business model revolves around helping organizations make sense of vast volumes of data and use them to reach conclusions that they can act upon. That might seem like a simplistic business model -- but one look at Palantir's financials will demonstrate why it's a winning formula.
In the second quarter, Palantir's total revenue grew by 27% year over year while its U.S. commercial revenue increased by an even faster 55%. And while commercial clients are rushing to adopt Palantir's platform to increase their efficiency, the company is still landing big contracts from its traditional source of strength: governments' defense branches and intelligence agencies.
On Sept. 20, the company announced it had been awarded a five-year, $100 million contract to extend the use of its Maven smart system to the U.S. Army, Navy, Air Force, Space Force, and Marine Corps.
It's another sign that while the company is more aggressively pursuing private-sector clients, government contracts remain an important piece of the puzzle. Indeed, government-derived revenues still account for more than half of its top line.
Analysts expect the company's sales to increase a further 21% next year to about $3.3 billion. Granted, the AI field is volatile, and Palantir stock isn't an appropriate pick for every investor or portfolio. However, those looking for an AI stock with massive upside potential need look no further than Palantir.
