2024 has been an amazing year for artificial intelligence where it's estimated that 72% of employees are using AI in some capacity and whether you realize it or not it impacts all of us from how Amazon recommends us product using navigation apps with realtime traffic updates and sadly we also see it in our customer service and seeing how AI is in the early stages it should be no surprise that AI companies are expected to grow an average of 36% a year for the next 5 years so if you had invested $100,000 in AI companies today with
a 36% ker or compounding annual growth rate it would be worth over $465,000 in 5 years I've been saying it for a while now but this is a once in a generation opportunity for investors and I hope that you listen to me 2 years ago when I tried my best to share this out regardless of where you're at in investing I'm going to break down the top AI companies to invest in for 2025 and of course I'll be following this up in a few week weeks with the best AI ETF for those of you that
don't like investing in individual stock now as I often say I'm not here to withhold information that's why I'm going to list out each of the companies that I plan to cover in the video right now and then I'll give you my commentary on why they're on the list in the first place and one of them is on the list because I expect a major pullback which will give most of you a chance to get in I'm also going to provide my bonus list of AI specific IPOs that you'll want to keep an eye out
over the next year so the top AI stocks that I'm discussing today are asml paler Nvidia Amazon crowd strike and Taiwan semiconductor and as I had said I expect a pullback from one of these now if that's all you wanted for the video then I get it you won't hurt my feelings if you ditch the video right now and I understand if you don't want to give me a like or a subscribe but I hope that you hang around to find out why they're on my list and definitely to learn about those upcoming IPOs which
are initial public offerings or when a company first list L it stock on the public market the first company that I'll speak to is Amazon which many of you know they were my prior employer and they were a delight to work for said nobody ever where most everyone knows them as an online retailer but the majority of their operating profit roughly 74% comes from their Web Services Group which hosts other large companies websites and operations like Netflix Airbnb and Disney plus and I think we all know about Amazon's glorified push to have drones delivering product
this is an area I wouldn't get too excited over simply because they've talked about it for over 11 years but a hidden area you don't often hear about is their project Kyper which intends to have over 3,000 satellites to provide internet and Communications worldwide but how does this differ from starlink Kyper satellites will have Optical intersatellite links for extremely high-speed data Transmissions between each of the satellites this will give Amazon the ability to marry this up to their Web Services Group to Service full-on Enterprise networks and not just individuals look at these satellit is a
method for Amazon to stretch it's already growing AWS business even further and let's not underestimate the AI services offered from AWS to all of its other corporate customers which is only going to grow exponentially over the next 5 years and if you weren't aware AWS also has a partnership with paler to host its Foundry software for its customers but I'll speak to that later on when we look at its performance year to dat it's up 39% but the pte ratio is high at a 44.6 but it's not too czy czy High seeing as how the
S&P 500 is at a 30 and now I want to look at the financials where I'll change the earnings and revenue to quarterly because I want to show you the Q4 in 2021 the margin happened to be over 10% then Q4 of 2022 well it happened to be flat and Q4 of 23 was a 19% now what do you think would happen if Amazon had a positive margin in Q4 of 2024 I'm just guessing that the stock would have an amazing rally can it happen well well yeah I certainly think so next I love the
debt to assets as it's literally falling off a cliff which is exactly what I want to see from Amazon from all of their Investments that they've made in itself over the past 3 years and the cash flow in the lower left well it's showing really good operating income growth and the earnings per share well it's consistently beaten expectations the past five quarters these are exactly what I like to see from an established tech company all the financials well they happen to be moving in the right direction and it should be a great investment long term
but hey once again just my opinion the next company is paler which specializes in big data analytics and AI integration enabling governments and Enterprises to harness Advanced tools like its artificial intelligence platform also known as AIP for realtime datadriven decision-making and I often state that they offer the most advanced platform that I have ever seen and companies are touting how they're getting an immediate return on their investment within a few months and I hope that you are one of my early followers where often talked about paler as a great investment and it's seen over a
300% return year-to date but let's get real for a second when we look at the PE ratio of a 339 and recognize that it's running just a little bit hot at the moment but let's flip over and look at the financials where the earnings and the revenue have blown up in the past year where it realized a positive margin for the first time in 2023 and next to that we have the debt to assets where it's taken a steep fall which is perfect and the oper in cash flow in the lower left is decent and
the Investments have fallen but that's not really a huge deal and I love how they've been beating the forecast for the past five quarters in a lower right but like I said earlier let's get real for a second the PE Ratio is wildly high and Palante here is getting some great press from being added to the S&P 500 and moving from the New York Stock Exchange to the NASDAQ and there's a lot of institutional money that's flowing into the stock but what happens if they miss their next quarterly earnings or only Come Close without a
beat my gut well it's telling me that paler is set to have a little bit of a pullback in early 2025 and that's a good thing it's good because the stock price needs to come back to reality and to give all of you newer investors a chance to buy into the company now I am not saying that a pullback will 100% happen but I am saying that there's a very strong chance that it will and when it does we should all pounce on the opportunity because this stock is literally going to the Moon over the
next 10 years now I want to cover a company that wasn't on my list but they were a contender seeing as how they're already up over 400% year-to dat and that would be poet Technologies which is also the sponsor of today's video poet Technologies a publicly traded company on the NASDAQ is revolutionizing Data Center and AI networking by addressing data transfer bottlenecks latency and heat with its patented Optical interposer platform traditional Electronics rely on copper wiring which consumes significant power and it limits data transfer speeds replaces these wires with efficient lasers drastically reducing power consumption
increasing data speeds and minimizing components on their microchips this shift happens to lower labor costs and the bill of materials their innovation has secured Partnerships with industry leaders like Mitsubishi Electric luxshare and foxcon whose clients include Nvidia apple and Amazon poet's technology is fully compatible with existing infrastructure while adaptable to Future advancements making it an easy and practical add-on as the AI sector expands poet directly tackles heat and bandwidth limitations challenges every AI company is striving to overcome positioning their technology as a crucial solution you can learn more about po Technologies via my link down
in the description our next company is Taiwan semiconductor manufacturing which is the world's largest dedicated semiconductor Foundry producing integrated circuits for major technology firms like apple Nvidia and AMD where semiconductors are estimated to grow at 8 1 12% a year for the next 8 years and Taiwan semiconductor has over 61% share today and that isn't expected to fall anytime soon and I believe that most of you know that semiconductors are the backbone for all of artificial intelligence and it's the driving force of that Revolution today when looking at tsm's performance it's doing great at up
90% year-to date and their pte ratio well it's actually a little bit low for its sector at a 29.6 so that might equal upside for all of us investors and when we look at the margin and revenue it had some dips in late 2023 fre but it's quickly turned around and looking good you'll notice their assets are climbing but so is their liabilities it's a business relying on heavy capital expenditure and this is more added risk than any of the other companies however it is great to see consistent beats for their earnings per share I'll
also point out that analysts have over an 18% upside for Taiwan semiconductor for the next 12 months overall almost every company making money from AI has to rely on Taiwan semiconductor for their Hardware so it stands to reason that it's a great choice because All Ships rise with the tide our next company is asml which is a Dutch multinational corporation specializing in the development and manufacturing of photolithography machines essential for Semiconductor fabrication including being the sole supplier of extreme ultraviolet lithography systems required for producing Advanced microchips they literally have over an 80% market share in
the equipment used by all manufacturers of microchips so just to give you a little bit of scope of their importance and in looking at their performance year-to date it's poor at a 4.5% and their PD ratio is pretty good at a 36 and in looking at the earnings and the revenue they're climbing granted the revenue took a hit in 2022 and 2023 due to the restrictions of selling to China but now they're on a good trajectory debt to assets have climbed with capex and liabilities taking a recent dip which is good from here I'll point
out that they've consistently been beating earnings per share forecasts and analysts project the next 12 months to be great for asml with over 25% upside of all the stocks that I speak to today this is the one no-brainer of the group that's really all I'm going to say about it the next company is NVIDIA where most everyone knows how great they've been for AI seeing as how they are up 182% year to date but interestingly enough in the past month the stock has dropped and a key reason for that slowdown is because they had major
delays in launching their next generation Blackwell gpus of the B100 and b200 due to design flaws and the intense demand for customers is straining on their supply chain all of these delays has already slowed the stock growth and it's expected to improve in December of 2024 and especially the first part of 2025 this will reflect positively in their next quarterly earnings in February 2025 and that's why analysts are giving Nvidia a 12-month forecast over 25% for the next year I won't dive too deeply into Nvidia look they dominate the market with Superior Products they recently
fa some setbacks and they created an opportunity for investors like us to buy in ahead of strong potential growth in 2025 I'm just giving you a little background so you can see that there's a little bit more room to buy and grow before I list the next company don't forget that I'll have a quick recap of the top IPOs that may be coming in 2025 which I think you'll want to be ahead of the next company is crowd strike which is a cyber security company that provides Cloud native Point protection and threat intelligence through its
AI powerered Falcon platform to prevent and respond to cyber tax globally but unfortunately many of you may be familiar with the company because they were a leading cause for so many computer systems going down in the summer of 2024 which caused the stock price to plummet however they managed to maintain their business and took a hit to margin which you can see in Q3 of 2024 where it dropped to a netive 1.7% because I'm guessing they had to incentivize some of their customers to stay with them but on a positive note they have very good
debt to assets which are dropping and the cash flow is steadily increasing and like all other companies I've spoken to they are consistently beating forecast for earnings per share in the lower right this is another company where I'm dollar cost averaging today to steadily invest with crowd strike but I am waiting to see if they get any lawsuits from the outages or additional margin hits which would show in their next earnings and if they have any major hits against them then you'll see a heavy pullback and that would give us another good chance to buy
in more heavily now that's the scenario that I see potentially playing out for crowd strike now I hope you can appreciate that in my commentary that I'm not just saying bye today bye right now bye bye bye you're missing out but instead I'm trying to be levelheaded and explain what I expect to see in the next few months and how I'm going to adjust my investments to take advantage of the situation now let's touch on some of those potential IPOs that may be coming in 2025 where the first one will cereus which specializes in designing
and building powerful AI computers notably developing the wafer scale engine the largest computer chip globally to accelerate complex AI model training and inference this is one IPO that has me very excited if the valuation isn't ridiculous because I expect this will become a very hot stock once it's on the market and it may be happening as soon as next month the next potential IPO is andril Industries which is founded from a guy named Palmer lucky that created the Oculus VR where he's turning the defense industry upside down where he's creating high-tech weaponry and defenses where
they focus on rapid Innovation and attempting to provide solutions to problems the government doesn't even realize they need where their products are easy on production and maintenance and they offer software to support AI efficiencies when this company goes public they will quickly become a leader within their industry now there are some people that don't support defense companies from a moral standpoint and that is perfectly fine but after serving 12 years in the military I fully support a company that makes our troops better equipped for every situation and to have an advantage over our adversaries and
the last potential IPO would be from open AI where their chat gbt made AI more mainstream and really it started at all granted Elon Musk wants to block their ability to become public and for-profit but really I don't think he'll be able to keep it from happening open AI is already ingrained with so many companies and users that I believe their potential for growth is extremely high as I mentioned in the beginning if individual stocks aren't your thing then I'll be following this up with the best AI ETF within a couple of weeks thank you
so much for watching
