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2 Millionaire-Maker Artificial Intelligence (AI) Stocks
Goldman Sachs notes that the tech sector has been the driving force behind the U.S. stock market since 2010, generating 40% of the equity markets’ gains over the past 14 years.
Many tech stocks have delivered outsize gains since 2010. For example, $1,000 invested in Advanced Micro Devices would now be worth more than $23,000. Other companies — including Microsoft, Amazon, and Netflix — have also been multibaggers during this period, while Nvidia recorded stunning gains from multiple catalysts, the latest one being artificial intelligence (AI).
With AI still in its early phases of growth, Bloomberg estimates that the technology could generate $1.3 trillion in revenue in 2032, up from this year’s estimate of $137 billion. So, if you’re looking to build a million-dollar portfolio, you might do well to buy AI-focused companies and hold them for a long time.
In this article, we will take a closer look at two names that could soar in the long run, delivering outstanding gains to investors while contributing toward a million-dollar portfolio with AI-fueled growth.
1. Palantir Technologies
Companies like Nvidia have been in the limelight with their powerful chips capable of training AI models. But those models eventually need to be deployed for real-world applications. Palantir Technologies (NYSE: PLTR) is helping customers do just that with its Artificial Intelligence Platform (AIP).
AIP users can build generative AI applications, integrate large language models (LLMs) into their workflows, and deploy pre-built AI applications. Palantir has smartly been conducting its “boot camps” to show customers how to deploy generative AI for their businesses’ needs. This strategy has landed sizable contracts.
And customers signing up for AIP are reportedly looking to deploy the platform across their operations, creating a land-and-expand effect that significantly increased Palantir’s commercial customer base and contract value. That share of its business was up 55% year over year in the second quarter, exceeding the 41% increase in its overall customer base, which includes its government clients.
The company booked $946 million in total contract value in the second quarter, an increase of 47% from the prior-year period. And AI has helped boost the net retention rate (NRR) to 114%, up 300 basis points. (A reading of more than 100% means that existing customers are spending more money year over year.)
This metric does not include revenue from new customers acquired in the past 12 months, management says, so it has not yet fully captured the acceleration in its U.S. commercial business over the past year.
The 26% year-over-year increase to $4.3 billion in the company’s total remaining deal value is a further indicator of the impact of AI on its business. This metric refers to the total remaining value of Palantir’s contracts at the end of a reporting period. Given that the company has generated $2.5 billion in revenue in the trailing 12 months, the sizable remaining value in its deals points toward healthier revenue growth in the future.
Palantir says that its adjusted operating margin jumped by 12 percentage points in the second quarter to 37% because of “the strong unit economics of our business.” Translation: The company is generating more profit from each customer, driven by the increased spending on its products thanks to AIP.
Consensus estimates put Palantir’s annual earnings growth at 57% for the next five years. And with the global AI market expected to increase beyond the next five years, the company could sustain that healthy earnings growth for a longer period.
So if you’re looking for an AI stock with the long-term potential that could contribute toward making a million-dollar portfolio, you would do well to take a closer look at Palantir before it soars higher.
2. Oracle
The software platforms that Palantir offers to customers run on cloud infrastructure provided by the likes of Oracle (NYSE: ORCL). The two companies are already in a partnership, with Palantir using Oracle’s distributed cloud and AI infrastructure for its AIP, among other offerings. And it’s not the only company using Oracle’s cloud to reach customers.
Companies have been renting Oracle’s cloud infrastructure for training AI models, apart from offering their cloud-based AI services on its cloud platform. The demand for Oracle’s cloud infrastructure has been strong and exceeding availability. Management said on the September earnings call that its infrastructure cloud services business has attained an annualized revenue run rate of $8.6 billion, driven by a 56% increase in consumption.
Oracle has generated just under $54 billion in revenue in the past year. So, the AI-driven increase in demand for its cloud infrastructure has started moving the needle in a big way. That robust demand is the reason its remaining performance obligations (RPO) shot up 53% year over year to $99 billion in the first quarter of fiscal 2025.
RPO refers to the total value of a company’s contracts that will be fulfilled at a future date. So the faster growth in this metric when compared to Oracle’s revenue growth last quarter is an indication of stronger top-line growth in the future.
Goldman Sachs estimates that infrastructure as a service is set to generate $580 billion in revenue by 2030 powered by AI, which means that Oracle has a massive opportunity. Consensus estimates project an acceleration in growth following a 6% increase in revenue in the previous fiscal year to $53 billion.
Considering the huge addressable opportunity, Oracle could maintain strong growth over the long run as well. Finally, with the stock trading at 28 times forward earnings as compared to the U.S. tech sector’s average price-to-earnings ratio of 46, investors are getting a good deal on this AI stock. It seems like a good fit if you’re looking to create a million-dollar portfolio.
Should you invest $1,000 in Palantir Technologies right now?
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Amazon, Goldman Sachs Group, Microsoft, Netflix, Nvidia, Oracle, and Palantir Technologies. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
2 Millionaire-Maker Artificial Intelligence (AI) Stocks was originally published by The Motley Fool
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Do millionaires keep their money in checking accounts?
The habits of millionaires are a topic of interest when it comes to financial advice. After all, unless they received a large chunk of money as an inheritance or gift, most millionaires had to be smart with their money to get where they are.
Learning how millionaires accumulate wealth — and where they keep it — can provide valuable insights for anyone focused on growing their money. One common question is whether or not millionaires keep money in checking accounts.
Studies show that in recent years, millionaires are keeping a significant portion of their wealth in cash. According to CNBC’s , that portion was about 24% in 2023. While this doesn’t necessarily mean a quarter of a millionaire’s wealth is sitting in a checking account, it does indicate the importance of maintaining liquid assets. And a checking account can be a helpful tool for doing so — whether or not you’re a millionaire.
Anyone, regardless of net worth, can find value in a checking account. Checking accounts allow unlimited deposits and withdrawals, check writing, bill pay, and other features to help you manage your money day-to-day.
While millionaires may keep large portions of their wealth in other deposit accounts and investments, some may use a checking account to manage daily spending. Millionaires also recognize the importance of having liquid assets, like funds in checking and savings accounts. Accessible cash lets you cover unexpected expenses without needing to sell off investments, borrow money, or pay a penalty for tapping your retirement savings early.
The amount of money a millionaire keeps in their checking account is highly personal and depends on preference. However, because checking accounts rarely earn competitive — if any — interest, some millionaires intentionally limit their checking account balance. Some may choose to keep the bare minimum, such as a couple of months’ worth of essential expenses, in their checking accounts, keeping the rest of their wealth in more lucrative assets.
Regardless of preference, it would be surprising for a millionaire to keep more than $250,000 in a single checking account. That’s because the Federal Deposit Insurance Corp. (FDIC) only insures up to $250,000 in deposits per institution, per account holder.
While millionaires may use checking accounts for day-to-day financial transactions, they may also use some of the following accounts in addition to, or in place of, a checking account:
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Savings accounts: Like checking accounts, savings accounts provide a high degree of liquidity, allowing you to access your money as needed for regular or unexpected expenses. High-yield savings accounts, in particular, give millionaires an extra bang for their buck. Some of the best accounts currently offer rates upwards of 4% versus the national average savings account rate of 0.46%.
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Cash management accounts: Cash management accounts (CMAs) pay competitive interest rates while maintaining more accessibility than a savings account. Some CMAs come with a debit card and ATM access, and many provide extended FDIC coverage limits by “sweeping” additional deposits into partner banks. CMAs are available at brokerages, not banks, facilitating easy transfers between investment and cash accounts.
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Money market accounts: Similar to CMAs, money market accounts combine features of checking and savings accounts, often paying competitive interest rates and providing check writing and ATM access. Banks and credit unions offer these accounts, which are federally insured. Minimum opening deposit and minimum balance requirements are often higher than those for standard savings accounts.
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Retirement and tax-advantaged accounts: Millionaires understand the importance of investing for their later years, and retirement accounts such as 401(k)s and IRAs allow them to do so in a tax-advantaged way. Some retirement accounts, like 401(k)s, are offered by certain employers. Others, such as traditional and Roth IRAs, are available to anyone.
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Brokerage accounts: The IRS limits contributions to tax-advantaged accounts, and millionaires typically invest beyond these limits. They do so with taxable brokerage accounts, which can hold investments such as stocks, bonds, and mutual funds without contribution limits.
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Other investments, like real estate, commodities, and art: Some millionaires may decide to diversify their portfolio with other investment types. These could include real estate investments, such as investment properties or real estate investment trusts (REITs); commodities, such as metals or energy products; art; and more.
The amount of money millionaires keep in their checking accounts depends on personal preference. While some millionaires may keep six figures in their checking account to maintain a comfortable cash cushion, others may choose to keep the bare minimum in checking. You wouldn’t expect millionaires to keep more than $250,000 in a checking account, however, because balances over this threshold aren’t typically insured.
There’s no single bank that’s a favorite among millionaires; it’s another matter of preference. However, millionaires are likely to bank with institutions that offer private banking to those who meet specific financial requirements. Private banking may include wealth planning services, waived fees, dedicated bankers, and additional perks. J.P. Morgan Private Bank, Citi Private Bank, and Bank of America Private Bank are among some of the most popular banks for millionaires.
Billionaires may have checking accounts, but they likely use accounts that cater to ultra-high-net-worth individuals. These accounts may come with perks such as a dedicated banker, waived fees, and competitive interest rates. Alternatively, billionaires may opt for a cash management account with higher FDIC insurance coverage limits and checking account features.
No rule says you can’t have a million dollars in a checking account, but FDIC insurance typically only covers up to $250,000. Plus, you can get a bigger return on your investment by keeping $1 million elsewhere. One alternative is a cash management account, which acts like a checking account but generally earns higher interest. Plus, many cash management accounts insure more than the standard $250,000 by sweeping funds into multiple partner banks.
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Lumen And Meta Join Forces To Boost AI With Flexible, On-Demand Network Solutions
Lumen Technologies, Inc. (NYSE:LUMN) shares are trading higher on Monday after the company announced it is partnering with Meta Platforms, Inc. (NASDAQ:META) to significantly increase Meta’s network capacity and help drive its AI ambitions.
Lumen’s partnership offers Meta enhanced flexibility with secure, on-demand bandwidth, supporting its complex computing requirements and enabling it to serve billions daily.
Ashley Haynes-Gaspar, Lumen’s EVP and chief revenue officer, said, “We’ve transformed our company to meet this demand. As Meta’s customers use more AI services across its platforms, we’re helping provide Meta with a seamless, effortless, and flexible network that will meet its growing needs.”
Lumen Technologies said its Private Connectivity Fabric enables long-term network capacity for Meta’s AI.
Alex-Handrah Aimé, director of Meta’s Network Investments stated, “Our AI tools are performing increasingly more complex tasks including enabling conversations in a variety of languages and translating text to images in real time, while helping people interact with the world around them in new, immersive ways.”
Lumen will report third quarter 2024 results on November 5, 2024.
Investors can gain exposure to the stock via Invesco S&P SmallCap Utilities & Communication Services ETF (NASDAQ:PSCU) and First Trust Cloud Computing ETF (NASDAQ:SKYY).
Price Action: LUMN shares are up 9.50% at $7.38 at the last check Monday.
Image via Shutterstock
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