World-renowned semiconductor producer nvidia It is widely seen as a leading force behind Artificial Intelligence (AI), and it continues to be a leader in the field to this day. But AI is a fast-growing industry with plenty of room for other contributors, and in fact, some experts predict that the majority of companies will use AI by 2030, adding $13 trillion in value to the global economy.
So, while Nvidia is a $413 billion giant today, three Motley Fool shareholders think C3ai (Amnesty International -0.70%)And the risk (RSKD 0.69%)And the CrowdStrike (CRWD 0.83%) Are the artificial intelligence forces of the future. Here’s why.
Make artificial intelligence easier
Anthony de Pizzo (C3ai): The one thing the AI industry is missing is access. Typically, only large tech companies with the financial resources and ability to attract talented developers are able to use AI meaningfully. But thanks to C3ai, part of that burden is lifted. The company provides thousands of ready-made and customizable AI applications to 11 different (and growing) industries.
C3ai’s clients are incredibly diverse, ranging from fossil fuel giants to financial services companies. The oil and gas industry is not an industry that investors might associate with advanced technology like artificial intelligence, but it makes up the majority of C3ai’s revenue. Companies like coincidence Predictive capabilities are used to help prevent catastrophic failures, and to reduce global warming emissions. That company has deployed C3ai apps to monitor 10,692 pieces of equipment.
But C3ai’s progress in this field is also recognized by some of the world’s largest technology giants, including Microsoft And the the alphabet‘s The Google. These companies are collaborating with C3ai to build better cloud services for their customers, and Microsoft has already created $200 million in value through the partnership.
C3ai generated $252 million in revenue during fiscal 2022 (ending April 30) but lost $192 million for the year. However, it contains a very high percentage gross profit margin 81% and more than $950 million of cash and short-term investments on its balance sheet, so it has plenty of room to continue investing in growth before it cuts spending to drive positive earnings. The company expects to have a $596 billion opportunity by 2025, so it has only unlocked a small portion of its growth potential so far.
C3ai stock is down 89% from its all-time high, which could be a great opportunity to take a long-term position.
AI selection overlooked
Jimmy Loko (risk): Riskified – like many other companies in the e-commerce space – has been beat 84% since it went public in late 2021. However, there is reason to believe this Artificial Intelligence (AI) Corporation It could be a bargain at these prices. The company helps e-commerce companies detect and prevent fraudulent transactions, with artificial intelligence and machine learning as driving forces for their decisions.
Rescued’s solutions have been of great value to customers. In a study conducted by the company, its top 10 customers experienced a 39% decrease in average operating expenses due to fewer goods lost due to fraudulent transactions. In addition, customers also saw an 8% increase in revenue from transactions that were thought to be fake but actually authentic. With such an impressive value proposition, it should come as no surprise that Rescued has seen 2% or fewer annual customers since 2019.
The company facilitated $22.7 billion of total merchandise volume in the first quarter, helping the company generate more than $58.8 million in revenue over the same period. The company burned $10 million in free cash flow in the first quarter, which is concerning given the potential for activity to slow over the next year as consumers make fewer e-commerce purchases due to a potential recession. Still, Riskified’s balance sheet is solid: It contains more than $500 million in cash and debt-free securities.
Assuming the company’s cash burn rate remains constant, it can support 50 quarters of free cash flow burn with the cash it has on hand. Therefore, Reskived can remain operational after stagnation and continue to grow.
However, investors do not value it this way: the company’s current market value is $ 693 million, but it project value Only 173 million dollars. At this price, investors are hardly expecting any success from Rescued, which may be overly pessimistic. Considering the value proposition to its customers, Business could be doing a lot better than Wall Street thinks right nowAnd in the long run, Resquid has the potential to see excellent results on the other side of the stagnation.
Where artificial intelligence meets cybersecurity
Trevor Jenwin (CrowdStrike): Businesses are becoming more digital as they improve the customer experience and increase operational efficiency. Trends such as cloud computing and software proliferation are fueling this digital transformation, but these same trends have also created new attack surfaces for hackers. This has made cybersecurity a top priority, and CrowdStrike has become the gold standard in endpoint (device) security.
CrowdStrike offers 22 different software modules, all delivered through a single lightweight agent that can be installed without rebooting. This is what sets CrowdStrike apart from other sellers, and it also simplifies adoption for customers. But that is not the only unique thing about this cybersecurity company. Its platform can also broadcast security signals to the cloud in real time, where powerful AI models analyze data to predict and prevent cyber attacks.
Even better, management believes that its AI models are uniquely effective. As a market leader in peripheral security, CrowdStrike has the advantage of data — its platform delivers nearly 1 trillion security signals every day — and data is the cornerstone of good AI. This network effect means that CrowdStrike’s AI models are constantly improving, keeping the company at the forefront of threat intelligence.
To that end, CrowdStrike has seen its customer count increase by 57% over the past year, and spend per customer has been up more than 20%. In contrast, revenue rose 64% to $1.6 billion, and free cash flow rose 49% to $481 million.
Looking ahead, shareholders have good reason to be excited. CrowdStrike has a permanent competitive advantage in a market valued at $58 billion in management. Even better, CrowdStrike’s product pipeline could drive that number to $126 billion by 2025. Suffice to say, there is plenty of room for future growth, and the company should continue to benefit as companies invest in digital transformation. For this This growth stock is worth buying.
Susan Fry, CEO of Alphabet, is on the board of The Motley Fool. Anthony de Pizzo He has no position in any of the mentioned shares. Jimmy Loko He has positions at CrowdStrike Holdings, Inc. and Nvidia and Riskified Ltd. Trevor Jenwin He has positions at CrowdStrike Holdings, Inc. and Nvidia. Motley Fool has positions at Alphabet (A), Alphabet (C), and CrowdStrike Holdings, Inc. , Microsoft, Nvidia, and Riskified Ltd. The Motley Fool recommends C3.ai, Inc. Disclosure Policy.