Invest in These Three AI Stocks to Maybe Amass a Million Dollars (Part-2)

Indeed, its goods are gaining popularity. Revenue grew 58% to $5.8 billion in the first half of fiscal 2024 (ending Dec. 31). While operational expenditures surged significantly, net income jumped just 25% to $453 million.

Investors tend to be more interested on the company's growing AI prospects than those increased operational expenditures, which were mostly connected to upgrades. The stock has risen 695% in the past year and doubled since 2024.

Despite sales growth, its price-to-earnings ratio is 43, which is reasonable. Supermicro prices at 26 times projected earnings, so investors may see greater gains soon.

Using AI, Upstart Holdings (NASDAQ: UPST) aims to revolutionize the loan assessment industry. Internal studies have revealed loan opportunities ignored by Fair Isaac's FICO scoring tool, allowing Upstart's lending clients to accept more loans without raising risk.

Since Fair Isaac created the FICO score in 1989, its procedures have altered little, making it open to innovation. Since Upstart only makes money via evaluations, it should have no credit risk.

The company's rapid development and profitability halted unexpectedly as interest rates soared. A tiny customer base and significant dependency on two major clients have also affected Upstart, as has its choice to extend its business model and offer part of the loans its platform authorized.

The first nine months of 2023 saw a 46% drop in revenue to $408 million. However, Q3 sales grew 3% to $147 million, suggesting the worst may be gone. The stock's price-to-sales ratio is 5, low compared to the preceding bull market.

Upstart is risky, but its platform's capacity to approve more loans without raising lenders' credit risk might be valuable if additional banks utilize it to replace the FICO scoring methodology. Upstart might generate huge shareholder profits if more banks use it and interest rates fall.