Although the excitement surrounding artificial intelligence (AI) remains strong, offering various opportunities for growth stocks to achieve impressive gains, two particular AI-focused stocks may have the potential to outshine the performance of the S&P 500 index before the decade wraps up.
Indeed, the AI technology sector, which includes a wide range of applications, is anticipated to grow as per insights from Finbold; the expected market valuation of AI is $207.9 billion, projected to surge by 788.64% to around $1.87 trillion by 2030. It is predicted that the market valuation will exceed the $1 trillion threshold for the first time in 2028, estimated at $1.06 trillion.
As a result, Finbold has pinpointed two AI stocks that could significantly benefit from this growth.
#1 Palantir (PLTR)
Specifically, the first stock under consideration is Palantir (NYSE: PLTR), which has recently been integrated into the S&P 500 index, and which Bank of America (NYSE: BAC) analyst Mariana Pérez Mora suggested is facing an analytical misjudgment similar to the one from 1980 that forecasted only 900,000 users for the mobile phone market by 2000.
“We believe Palantir’s (PLTR) functionalities, technology, and future trajectory are experiencing a comparable essential misunderstanding. (…) The upcoming inclusion in the S&P 500 represents a significant opportunity for institutional investors to reevaluate their beliefs regarding PLTR.”
With this viewpoint, Pérez Mora, who has tracked PLTR stocks since they were valued at merely $6 per share, has elevated her 12-month price target for Palantir from $30 to a possible $50, marking it as the highest projection made by Wall Street analysts in the last three months.
As of the writing of this report, PLTR stock was valued at $36.10, showing a 0.64% decrease for the day. It has also appreciated by 4.98% over the week, contributing to an 11.06% rise in the past month and an impressive 117.71% gain year-to-date (YTD), according to data from September 17.
#2 Advanced Micro Devices (AMD)
On the other hand, the second AI stock that may outperform the S&P 500 by 2030 is Advanced Micro Devices (NASDAQ: AMD), a company that directly competes with Nvidia (NASDAQ: NVDA) in the GPU arena and has recently introduced new products to accelerate its AI initiatives.
Moreover, Stifel technology analyst Ruben Roy pointed out that AMD’s merger and acquisition (M&A) activities over the past six to eight months have included software-focused acquisitions, such as a $4.9 billion deal with ZT Systems, positioning AMD’s strategy closely behind Nvidia’s.
“I wouldn’t assert that AMD is swiftly catching up to Nvidia, but evidently, based on these acquisitions, it seems the company’s strategy is aimed at establishing itself as the number two competitor to Nvidia’s dominance.”
It is also worth mentioning that Citi (NYSE: C) analysts previously indicated that the ZT Systems acquisition would empower AMD to more adeptly compete with Nvidia “in the data center GPU domain through improved system knowledge and quicker hyper scaler deployment timelines,” reaffirming their ‘buy’ recommendation along with a price target of $210.
At present, AMD stock is listed at $151.90, reflecting a 0.33% decrease in the last 24 hours. It has risen by 6.03% over the week, declined 2.20% in the past month, and increased by 9.61% since the start of this year.
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