Artificial intelligence is embedded in so many products and services that we use daily that we hardly notice it’s there. Looking for outdoor furniture on Amazon? AI helps show you the most relevant results. Reply to an email from a colleague? The AI is there, suggesting the words of an answer.
And while these are good examples of using AI in everyday life, there are a few companies that are harnessing the full potential of AI and could make big gains in the next bull run. Here are three that should be on your shopping list.
1. Assets received
Lending activity has long been awaiting disruption, and Assets received‘ ( UPST -2.71% ) This is exactly what the AI-based platform does. Instead of using credit scores alone to determine whether someone should receive a loan, the company’s artificial intelligence tool looks at multiple layers of information about borrowers when applying.
The result is good for both borrowers and lenders. The company claims that its AI-based loan referral system results in 75% fewer loan defaults compared to banks with similar approval rates. And the result for borrowers is personal loans that are, on average, 10% lower than traditional lending sources.
The company’s AI also makes loan application ridiculously easy, with over 70% of loans being fully automated.
If your eyes are widening because the loan origination market doesn’t exactly look like an exciting AI trend, then maybe I can wake you up with these two numbers: $635 billion and $84 billion. These are the huge total addressable markets that Upstart management says it has in the auto loan and personal loan markets respectively.
Just as impressive as the size of its market, Upstart has been profitable for years and its revenue has increased by 252% in the last quarter. All of this indicates that Upstart is poised to continue building on its current AI success.
If AI-based loan origination isn’t your thing, then what about AI-based insurance? Lemonade (LMND -1.49% ) Improves the process of filing an insurance claim a bit by using AI chatbots to do the heavy lifting and process claims quickly.
The company’s AI also helps potential customers find low-cost insurance options for a wide variety of products, including renters and homeowners insurance, term life insurance, insurance for pets and (more recently) car insurance.
During the last quarter, Lemonade doubled its sales compared to the quarter of the previous year. Its total number of customers increased by 43% year-on-year.
But the company’s recent foray into the auto insurance market is what investors may really want to focus on, as the size of the auto insurance market is a staggering $300 billion, or 70 times the size of the renter and pet insurance markets combined, according to eMarketer.
Lemonade is still a young, fast-growing company, which means there will likely be some growing pains, but investors looking for a unique company that has the potential to disrupt the insurance market with its artificial intelligence may want to -be adding Lemonade to their shopping list.
Semiconductor Company Nvidia (NVDA 9.81% ) has long been associated with its graphics processors for gaming. But over the past two years, Nvidia has benefited from companies adding its processors to data centers.
Nvidia’s chips can do a lot of work when it comes to AI processing in data centers, and many tech companies have taken notice. For example, Metaplatforms started using Nvidia’s DGX A100 product in January to build an AI supercomputer.
Large tech companies using Nvidia’s AI products have led to huge growth in the company’s data center business. Over the past two years, Nvidia’s data center sales have soared 237%. This growth has seen Nvidia’s data center sales now represent 42% of total sales, up from just 31% two years ago.
And it’s not just AI that Nvidia will benefit from. The company’s game sales soared 37% in the last quarter, and revenue from its professional viewing business more than doubled in that period.
For investors looking for an extremely profitable AI stock, Nvidia is hard to beat. The tech company generated net income of $9.7 billion in fiscal 2022, up an impressive 125% from 2021.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end advice service Motley Fool. We are heterogeneous! Challenging an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and wealthier.