Investors looking to capitalize on the artificial intelligence (AI) boom have more choices than just Nvidia and Palantir.
Experts largely agree that AI is set to reshape the global economy, much as the internet did in the late 1990s. The internet opened new markets and fostered innovative business models, creating investment opportunities that spawned companies like Alphabet, Meta Platforms, and Netflix.
The AI revolution presents itself as yet another once-in-a-decade chance for investors. By streamlining monotonous tasks and enhancing employee productivity, AI is expected to increase economic output. Aside from Nvidia and Palantir, investors can also consider stocks like Amazon (AMZN +0.16%) and Pure Storage (PSTG 2.56%).
1. Amazon
Amazon holds a strong position across three key sectors: it leads the online marketplace in North America and Western Europe by gross merchandise volume, dominates retail advertising globally, and is the largest provider of cloud computing services in terms of infrastructure spending.
The company integrates artificial intelligence into its growth strategies across all three areas. In retail, Amazon has developed over 1,000 generative AI applications for tasks such as inventory management, demand forecasting, customer service, and delivery logistics. In advertising, it offers tools for brands to generate multimedia content.
In its cloud services, Amazon has created specialized AI chips and launched new services like Bedrock for generative AI applications and Amazon Q for productivity. Notably, IT consultancy Gartner rated Amazon Q as the second-best AI coding assistant, following Microsoft’s GitHub Copilot.
2. Pure Storage
Pure Storage specializes in all-flash storage systems and software solutions that help enterprise clients manage data across both public clouds and private data centers. Its innovative DirectFlash technology improves efficiency by managing flash memory at the system level.
This technology not only increases storage density by two to three times but also reduces power consumption by half compared to competitors. Additionally, Pure Storage’s Evergreen architecture allows clients to upgrade their storage systems without downtime.
Gartner has recognized Pure Storage as a leader in primary block storage, noting that its FlashBlade systems excel in density and energy efficiency, qualities beneficial for AI workloads. Recently, Meta Platforms chose Pure Storage as a main storage partner.
Despite reporting positive third-quarter earnings that exceeded expectations, Pure Storage’s stock fell 27% afterwards, primarily due to concerns over profit margins as the company increases R&D spending. This dip presents a buying opportunity, as analysts anticipate adjusted earnings to grow by 30% annually until May 2027, making the current price of 39 times earnings seem justifiable.
