3 Automation Pioneers: AI Stocks to Buy for the Long Run

Stocks to buy

In AI and automation, three pioneering companies stand out as frontrunners. These AI stocks are not just names, they are disrupting industries and can potentially deliver solid returns. As the demand for AI solutions intensifies, their strategies and leads make them AI and automation pioneers. These trailblazing companies hold solid fundamentals behind their potential meteoric rise.

Read more to learn about the ingenuity and foresight driving these AI juggernauts’ market valuations.

Palantir (PLTR)

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The US commercial segment emerged as a vital growth factor for Palantir (NYSE:PLTR). The segment has surpassed $1 billion in revenue over the last 12 months. In Q4 2023 alone, commercial revenue grew by 32% year-over-year (YOY), hitting $284 million.

The AI platform was critical in driving top-line and customer adoption within the commercial segment. Palantir witnessed unprecedented customer demand and enthusiasm, with bootcamps facilitating the conversion of new customers and the expansion of existing ones.

Additionally, the company’s commercial total contract value booked in Q4 reached $699 million. This represents a remarkable 156% growth YOY on a dollar-weighted duration basis. Fundamentally, while the US commercial segment led growth, Palantir also reflects considerable traction in its international commercial and government businesses. Specifically, international commercial revenue grew by 11% YOY in Q4, hitting $154 million.

Finally, Palantir’s partnerships with defense tech players and its fundamental capability to provide software infrastructure, such as Apollo, highlight its potential to become a leading contractor in the government technology market.

Innodata (INOD)

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Innodata (NASDAQ:INOD) strategically targets two primary markets, big tech companies investing in generative AI and enterprises across various sectors adopting AI technologies.

The company offers a range of services tailored to meet the specific demands of these markets, including instruction data set creation, reinforcement learning, strategic technology consulting and model fine-tuning. With the increasing adoption of AI technologies by tech giants and enterprises, Innodata may capture a considerable share of the boosting market demand.

Additionally, Innodata maintains a solid financial standing, ending Q4 2023 with $13.8 million in cash. This is supported by a solid adjusted EBITDA of $4.3 million. The company does not anticipate the demand to raise additional equity, indicating confidence in its fundamental capability to fund growth initiatives through existing resources and operational cash flows. Innodata’s revolving line of credit with Wells Fargo (NYSE:WFC) provides additional financial flexibility. However, the company aims to fund its capital demands through internal cash generation.

Furthermore, Innodata’s transition to AI data engineering leverages its expertise and infrastructure, minimizing upfront investment costs. The company’s extensive experience in data engineering over the past two decades enables it to repurpose existing resources and technologies decisively for AI use cases.

SoundHound AI (SOUN)

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SoundHound AI (NASDAQ:SOUN) has constantly attained top-line growth, which can be observed in breaking quarterly revenue records and solid progressiveness. In Q4 2023, the company’s revenue reached $17.1 million and attained an 80% YOY increase.

Additionally, the company’s top-line has maintained a CAGR of +50% over the last four years. This solid performance suggests SoundHound AI’s capability to capitalize on market opportunities and monetize its technology solutions decisively.

At the top, SoundHound AI benefits from diverse revenue streams across multiple pillars of its business. There are three primary revenue pillars: royalties from voice-enabled products, subscriptions from voice-enabled services and monetization from connecting services to products.

Moreover, the company is leveraging technology across industries, including automotive, IoT devices and restaurants. As a result, SoundHound AI has established numerous sources of revenue generation. This diversification minimizes the risks associated with reliance on a single market segment and enhances the company’s standing against market fluctuations.

Overall, the company’s fundamental capability to swiftly integrate generative AI models and mitigate inherent issues reflects its expertise and agility in leveraging cutting-edge technologies.

As of this writing, Yiannis Zourmpanos held a long position in PLTR. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Yiannis Zourmpanos is the founder of Yiazou Capital Research, a stock-market research platform designed to elevate the due diligence process through in-depth business analysis.

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