Two AI Stocks Could Share $90 Trillion in Value by 2030

AI For Business

Hype around artificial intelligence (AI) reached a fever pitch this year when private company OpenAI unleashed its ChatGPT online chatbot to the world.His ability to quickly answer complex questions and write computer code has landed him multi-billion dollar investment deals from multiple companies. microsoft.

Wall Street is scrambling to find out the potential value of this rapidly developing technology, but so far no firm is as bullish as Cathie Wood’s Ark Investment Management.

AI could add $200 trillion to global economic output by 2030, and the industry’s software companies could generate $14 trillion in revenue by then, creating $90 trillion in enterprise value. thinking about.

If these numbers come to fruition, they could be of considerable benefit since most companies in this space are still relatively small. Here are two that could be the biggest winners.

1. Splunk

The ability of AI to complete complex tasks in a fraction of the time humans can can lead to an explosion of productivity. This is the theory and reason behind Ark Invest’s industry financial forecasts. splunk (SPLK -0.71%) It has the potential to create great value in the long run.

The company is a leading provider of machine learning software that helps companies achieve incredible efficiency gains. Splunk’s expertise is ingesting immeasurable amounts of data in a live environment and instantly analyzing it for actionable insights that your business can use to generate more revenue or save money. is to provide

Approximately 15,000 customers use Splunk for security, information technology operations, and observability. Sports apparel company Puma struggled to detect issues with customer orders due to a rudimentary monitoring system. Thanks to Splunk, the company’s online sales channel automatically detects issues within 15 minutes with pinpoint accuracy, whether a customer’s card is declined or the inventory system isn’t working. Nowthat is time Previously, when Puma used manual processes.

Similarly, global beer giant Heineken ships 13 billion gallons of product each year and uses Splunk to connect operations from brewing to distribution. Splunk runs across Heineken’s 4,500 digital applications, and per month he monitors 25 million messages, ingests that raw data, and spits out actionable guidance on the other side.

Approximately 790 of Splunk’s customers are spending at least $1 million annually at the end of fiscal year 2023 (ending January 31), contributing to the company’s annual recurring revenue of $3.67 billion. That’s just a fraction of Splunk’s estimated $100 billion opportunity, but given Ark’s estimates for AI as a whole, the company could create significant value in this decade. I have.

If the AI ​​industry generates $90 trillion in enterprise value by 2030, (AI -1.80%) Considering the company is currently valued at just $2.5 billion, it could see explosive growth. There is also. develops AI applications whether enterprise customers need off-the-shelf solutions or something completely custom. These customers operate in 14 industries, including oil and gas, manufacturing, healthcare, financial services, and the US government. With, businesses can accelerate adoption of this advanced technology rather than building it from scratch. This advanced technology can consume a large amount of time and resources.’s progress in AI has also been recognized by some of the world’s largest tech giants. Now jointly sells AI applications with Amazon Web services, Microsoft Azure, and alphabetGoogle Cloud. These cloud providers use to improve their offerings to their customers. For example, on AWS he can use to develop AI applications 26 times faster than using AWS alone.

Investors should be aware of a few things before purchasing stock. First, the company is in the process of transitioning from subscription-based pricing to consumption-based pricing, which has slowed revenue growth. This eliminates lengthy negotiations and complex onboarding processes when acquiring new customers, and expects 30% revenue growth from his 2024 fiscal year onwards.

Second, the company was recently called out by a short seller over discrepancies in its financial statements, mostly related to how earnings are recorded. You may be unjustified in your confidence, but you should still be careful. has been a volatile stock since going public in December 2020, quickly reaching an all-time high of $161 amid a blazing tech market. But investors started to turn sour on the tech stock, which has since fallen 85% as the company failed to meet its growth expectations. For risk-loving investors seeking exposure to the potential value creation that AI offers, it may be worth taking a small position in stock.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Alphabet executive Suzanne Frey is a member of The Motley Fool’s board of directors. Anthony Di Pizio has no positions in any of the mentioned stocks. The Motley Fool has positions and endorses Alphabet,, Microsoft and Splunk. The Motley Fool recommends The Motley Fool’s U.S. headquarters has a disclosure policy.

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