Welcome to the world of AI (artificial intelligence) investing! As technology rapidly evolves, learning how to invest in artificial intelligence becomes crucial. Savvy investors repeatedly focus on the AI sector, viewing it as a hub of breakthrough developments and investment opportunities. This is especially vital for seasoned stock market players and beginners aiming to expand their portfolios.
Investing in artificial intelligence goes beyond mere support for advanced technology. It involves engaging in a market movement that is reshaping the financial landscape. When considering AI investments, one must see AI stocks as central to technology stocks. However, it is also important to remember to adopt a balanced, risk-managed approach.
Learning how, and when, to invest in artificial intelligence companies is essential for staying ahead of market trends. AI’s growing influence across sectors underscores the importance of understanding its investment potential. This knowledge is crucial for those eager to leverage AI’s transformative power in the stock market.
Qualcomm (QCOM)
Qualcomm (NASDAQ:QCOM), a leader in the tech sector, has demonstrated impressive resilience, boasting a year-to-date (YTD) return of 15%. Despite facing a challenging market, the company’s robust strategy yielded revenues of $8.63 billion in its latest quarterly results.
Qualcomm is riding high on the financial tide, boasting an impressive treasure chest swelled by 77.4% to a dazzling $11.32 billion in cash and short-term assets. At the heart of their flourishing empire lies a dedication to AI mastery, notably through the groundbreaking Snapdragon X Elite chipset. This chip manages to outperform competitors like Intel (NASDAQ:INTC) and Apple (NASDAQ:AAPL). The technological marvel not only adds luster to Qualcomm’s already sparkling portfolio but also opens up exciting new investment horizons.
The company’s financial muscle is flexed in its latest cash flow statements, revealing a robust net income of $1.49 billion and a hefty $4.09 billion generated from its operations, showcasing its operational prowess. While their investing activities dipped into the red by $618 million, this can be seen as a strategic move to sow seeds for future growth. The net cash inflow of $2.35 billion cements Qualcomm’s position as a financial powerhouse, ready to conquer new frontiers.
Taiwan Semiconductor Manufacturing Company (TSM)
Taiwan Semiconductor Manufacturing Company (NYSE:TSM), a key player in the semiconductor industry, has experienced a notable 31% YTD return. Despite facing a challenging market and a recent quarterly report showing a decrease in net income by 25%, TSMC’s enduring strength is evident in its substantial EPS growth of 355%. This resilience underscores its strategic importance in the rapidly evolving tech sector, particularly in the realm of artificial intelligence.
The company’s financial performance had more than just the EPS growth to be proud of. A notably impressive aspect is the 19% growth in total assets, which paints a promising picture for its future expansion. TSMC stands out in the market with a hefty market capitalization of $446.21 billion and an active trading scene, averaging 9.1 million in volume. Further strengthening its position is its diverse portfolio, highlighted by a substantial allocation in cash and short-term investments amounting to $1.55 trillion New Taiwan dollars.
As the semiconductor cycle shows signs of bottoming out, TSMC’s prospects appear increasingly promising. The company’s strategic investments and robust financial health, combined with a favorable industry outlook, make it a top pick for investors aiming to gain exposure to the AI sector.
UiPath (PATH)
UiPath (NYSE:PATH), a leader in artificial intelligence and automation, intrigues investors with a 40% YTD return. The latest quarterly earnings show a revenue of $287.3 million, up 19%. However, operating expenses increased to $314.5 million, a 3% rise. Net income experienced a loss of $60.4 million, worsening by 50%, but EPS impressively grew to 9 cents, a 550% surge.
The company experienced a 32% increase in its EBITDA losses, reaching $70.3 million. However, its financial position remains strong, as evidenced by a 6% growth in its cash and short-term investments, totaling $1.83 billion.
Regarding UiPath’s cash flow dynamics, they are somewhat mixed. On the one hand, operational cash flow was positive at $44.3 million, jumping 287%. On the contrary, investing activities led to a $235.1 million loss, and financing activities declined by 33%. Consequently, the net change in cash showed a $217.3 million decrease. Nevertheless, free cash flow was positive at $97.9 million, a significant 516% increase.
UiPath presents a notable opportunity in AI. With its strong financials and market adaptability, it is positioned for potential long-term growth. Therefore, investors should closely watch UiPath’s developments in the evolving AI landscape.
On the publication date, Faizan Farooque did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.