Many synthetic intelligence (AI) shares have generated unbelievable features for buyers over the previous couple of years. Even in case you did not make investments early in this pattern, you continue to might have made good returns final yr by investing in some high performing AI shares.
As an illustration, Palantir Applied sciences (PLTR -2.52%), SoundHound AI (SOUN -16.44%), and Nvidia (NVDA -0.02%) all proved to be super investments in 2024. In case you had invested $7,000 into every of these shares at the begin of final yr, you’d have a portfolio price greater than $120,000 by the finish of the yr, a close to five-fold improve in pre-tax wealth. Here is a have a look at how properly every of these shares did, and whether or not or not it is too late to speculate in them at the moment.
Palantir Applied sciences
Information analytics specialist Palantir Applied sciences has been leveraging AI to reinforce its services and products. It is a massive title in counterterrorism and intelligence, with governments purchasers round the world. It has additionally been experiencing a lot of progress on the business aspect, creating options that may assist a wide selection of companies make higher choices.
The corporate has held a whole lot of boot camps to introduce potential prospects to the Palantir Artificial Intelligence Platform (AIP) and assist these companies perceive the use circumstances for that software program. The outcomes have been terrific. CEO Alex Karp has described the ensuing demand for AIP as “unrelenting,” and gross sales persevering with to speed up. Whereas Palantir’s progress price was declining in latest years, the tide turned in 2024.
PLTR Operating Revenue (Quarterly YoY Growth) knowledge by YCharts.
Now, with Palantir constantly worthwhile and a newly minted S&P 500 element, buyers stay extraordinarily bullish about the inventory. An funding of $7,000 into the enterprise a yr in the past can be price greater than $33,000 by the finish of 2024.
The hazard in shopping for or holding this AI stock at the moment, nonetheless, is that it trades at round 118 occasions subsequent yr’s anticipated earnings — a large premium. Except you are extremely bullish on the inventory and are comfy with the danger of a potential correction this yr, chances are you’ll need to take into account cashing out. I might be shocked for the inventory to supply up a repeat efficiency in 2025.
SoundHound AI
The smallest firm on this checklist is voice AI specialist SoundHound AI, which has a market cap of round $5.5 billion. Late final yr, its inventory value took off after the firm delivered robust quarterly outcomes and stored rising because it introduced offers with a number of restaurant chains.
In early December, it stated that Torchy’s Tacos, a standard regional taco chain, had rolled out the firm’s AI Sensible Ordering service in any respect of its 130 places. Later that month, it additionally introduced that Church’s Texas Hen would give its prospects the possibility to make use of SoundHound’s AI in drive-thrus to assist expedite the ordering course of.
On condition that SoundHound’s enterprise that’s nonetheless in the early phases of progress and that it faces a lot of competitors, information of extra firms adopting its expertise can have a actual affect for its enterprise and, in flip, improve the market’s confidence that this can be the actual deal. The enterprise is not worthwhile but, however SoundHound reported 89% income progress in the third quarter to $25.1 million. Its web loss grew by 8% to $21.8 million, however buyers look like keen to be affected person with the enterprise given its engaging progress alternatives in not simply the fast-food trade however in the automotive sector and different areas.
Pushed by SoundHound inventory’s robust rally towards the finish of final yr, a $7,000 funding in its shares a yr in the past would’ve been price almost $70,000 b the finish of 2024. However as with Palantir, I might be involved that SoundHound’s valuation has turn out to be a bit too wealthy, so it might not have the ability to do almost as properly this yr. The primary week of 2025 has been unstable for this inventory, nevertheless it’s too early to evaluate the place the inventory is perhaps headed. At the moment, the inventory trades at 68 occasions its trailing-12-month revenue.
Nvidia
Nvidia’s presence on any checklist of 2024’s nice AI shares ought to shock nobody. The chipmaker has been offering the processing energy for a lot of AI-powered initiatives with its cutting-edge graphics processing items (GPUs). With a market cap now in extra of $3 trillion, Nvidia is one of the most dear firms in the world, and has been a high growth stock to purchase and maintain in latest years.
What’s really spectacular about Nvidia is that it continues to put up spectacular top- and bottom-line progress. Throughout the nine-month interval ending Oct. 27, its income totaled $91.2 billion — a 135% improve from the similar interval final yr. And it achieved that whereas sustaining an exceptionally excessive revenue margin of 56% as its backside line soared from $17.5 billion to $50.8 billion.
To simply develop income is one factor, however Nvidia’s earnings are additionally taking off. That is why of these three firms, it is the most moderately valued one and the funding which can nonetheless have extra near-term upside. it is buying and selling at 35 occasions subsequent yr’s estimated earnings and its price-to-earnings growth ratio is true round 1, signifying that it is a good worth for long-term buyers.
In case you invested $7,000 into Nvidia’s inventory a yr in the past, your shares would’ve been price over $19,000 at the finish of 2024. Mixed with the different shares on this checklist, $7,000 invested throughout all these firms would have created a portfolio price roughly $122,000 coming into the new yr.