What two stocks can benefit from trends in AI and digital advertising?
Nvidia shares have attracted considerable investor attention in recent years due to a surge in demand for artificial intelligence (AI) chips. The tech giant has shown how strategic positioning in a growing market can deliver exceptional value for investors. For example, a $3,700 investment in Nvidia stock a decade ago is now worth over $1 million.
Although Nvidia continues to grow through AI, its size and market capitalization of $3.6 trillion suggest that past performance will be difficult to repeat. Investors are therefore looking for other companies that could offer similar growth potential in AI and digital advertising. Analysts have focused on two specific companies: C3.ai a The Trade Desk. These companies are in fast-growing markets and offer interesting growth opportunities, according to experts.
C3.ai: Growth due to demand for AI software
C3.ai $AI specializes in providing enterprise software solutions that leverage artificial intelligence. According to research by ABI Research, the AI software market is set to grow 30% annually through 2030, when it could generate $391 billion in revenue.
C3.ai reported a 21% year-over-year revenue growth to $87 million for the first quarter of fiscal year 2025. The 11% improvement over last year's growth suggests the company is gaining more customers and expanding its operations. A significant element of C3.ai's strategy is to partner with large cloud providers such as Google, Amazon and Microsoft.
In the last quarter, C3.ai signed a total of 71 contracts, an increase of 122% from the previous year. Of these contracts, 51 were through partners, reflecting the growth potential of its partner model. In addition, the collaboration with Microsoft has recently been extended, ensuring wider availability of C3.ai's products on the Azure platform and strengthening its market position.
The company expects to achieve revenue of $382.5 million for fiscal year 2025, up 23% from the previous year. According to analysts, C3.ai could maintain a double-digit growth rate in the coming years, making it an interesting player in the AI software space.
The Trade Desk.
The Trade Desk $TTD is a major player in programmatic advertising, which automates the purchase of ad space using real-time data analytics. The digital advertising market is huge - it generated $680 billion in revenue in 2023 and could exceed $965 billion by 2028.
In the first nine months of 2024, The Trade Desk grew its revenue by 27% to $1.7 billion, while its competitors, such as Meta Platforms and Google, grew more slowly. The rapid adoption of programmatic advertising, which could grow by more than 38% annually through 2028, gives the company a significant advantage.
Since going public eight years ago, The Trade Desk has increased the value of its $100 stock investment to more than $4,100. The company is expected to reach $2.46 billion in revenue in 2024, a 26% growth rate. With its innovations and expansion in a fast-growing market, The Trade Desk could continue its long-term growth and offer investors interesting valuations.
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Source: Yahoo Finance