The explosive growth of the Artificial Intelligence (AI) market has created many millions. For example, it is a modest $3,000 investment in an AI chipmaker Nvidia just 10 years ago it would be worth about $1.5 million today.
But with a market cap of $3.6 trillion, it may be difficult for Nvidia to repeat those million-dollar profits in the next decade. Therefore, investors looking for those kinds of life-changing returns should look for smaller companies with more room for growth. I believe these three companies — Symbiotic(NASDAQ: SYM), Use Robotics (NASDAQ: SERV)and Lemonade(NYSE: LMND) — can only make the cut.
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Symbotic manufactures autonomous robots for handling pallets in warehouses. It says a $50 million investment in just one of its modules (which includes its robots and software) could generate $250 million in savings over a 25-year lifetime. Its biggest customer is Walmartwhich tasked the company with automating all of its US regional locations over the next decade. That deal accounted for 88 percent of Symbotic’s revenue in fiscal 2023 (expired last September). Walmart is also one of Symbotic’s leading investors.
Symbotic is heavily dependent on Walmart, but has been acquiring other major customers such as Target, Albertsonsand C&S Wholesale. It’s also donating some robots to GreenBox, a new warehouse-as-a-service partnership it founded with its main partner. SoftBank last year.
Symbotic’s revenue is up 55% in fiscal 2024, and analysts expect its top line to continue to grow at a compound annual growth rate (CAGR) of 32% over the next two years as it continues to fulfill its long-term deal with Walmart and lock in. new customers. Analysts also expect that it will make a profit on generally accepted accounting principles (GAAP) in 2025.
With an enterprise value of $330,000, Symbotic’s stock still looks cheap at 1.3 times this year’s sales. It faces some macro-time and competitive winds in the automated storage space, but it may only become a million-maker stock in the next few years.
Serve Robotics develops an independent robotics delivery system. It was created as part of Postmates, which was acquired by Uber Technologies in 2020. Uber spun off Serve in 2021, but still uses its robots to fulfill some Uber Eats orders in Los Angeles.
Serve still gets all of its revenue from Uber, and it only operated 59 robots in the Los Angeles area in the third quarter of 2024. But by 2025, it plans to deploy up to 2,000 Uber Eats robots across the LA and Dallas-Fort Worth metro areas.
In 2024, analysts expect Serve to generate less than $2 million in revenue as it posts a loss of $34 million. But in 2025, they expect their revenue to jump to $13 million as it cuts its losses to $31 million. In 2026, they see their revenue more than double to $60 million as it cuts its losses to $25 million. We have to take those predictions with a grain of salt, but Serve’s business may start to pick up steam as more businesses use its robots to make temporary items. That growth could help it attract more customers and reduce its reliance on Uber.
With an enterprise value of $399,000, the service seems to be not very expensive at six times its 2026 sales. It remains a highly speculative stock, but it may still have a lot of upside potential and counts Nvidia as one of its top investors.
Lemonade is an online insurance company that simplifies the onboarding and claims process with its AI-powered chatbots. The simple digital-first approach made it popular with young and first-time insurance customers, and more than 70% of its customers were under the age of 35 at the time of its public offering in 2020. Initially it only served renters and homeowners. insurance, but now offers term life, pet health, and auto insurance. It ended its current quarter with 230 million customers, compared to more than 1 million customers at the end of 2020.
In 2024, Lemonade expects its insurance premiums to rise 26%, its net income to grow 22%-23%, and its total revenue to increase 21%-22%. It also sees adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) improving from a negative $173 million in 2023 to a negative $151 million-$155 million in 2024.
Lemonade has not proven its business to be stable yet, but it is growing faster than its larger competitors. With an enterprise value of $290,000, it sells for about four times next year’s sales — so it could bring in a million-maker if it ramps up its business, cuts its losses, and expands its bottom line.
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Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Lemonade, Nvidia, Seve Robotics, Target, Uber Technologies, and Walmart. The Motley Fool has a disclosure policy.
3 Millionaire-Maker Artificial Intelligence (AI) Stocks was originally published by The Motley Fool.
