Semiconductor giant Nvidia has added $2.6 trillion to its market capitalization since the beginning of 2023, soaking up most of the value created by the artificial intelligence (AI) industry so far.
However, professional investor Cathie Wood believes software companies will eventually generate $8 in revenue for every $1 spent on chips from the likes of Nvidia, which could create a substantial opportunity for investors.
C3.ai (NYSE: AI) and Lemonade (NYSE: LMND) were developing AI software long before the hype took hold last year. Shares in both companies trade at under $30; here’s why they could supercharge your stock portfolio over the long term.
1. C3.ai
C3.ai was the world’s first enterprise AI company when it was founded in 2009. It now has a portfolio of more than 40 ready-made and customizable AI applications used by businesses in 19 different industries, which helps them reap the benefits of the technology without having to build it from the ground up themselves.
Dow is a chemical manufacturing giant that uses C3.ai’s applications for predictive maintenance. AI monitors Dow’s equipment to calculate the probability of a failure, allowing engineers to remedy any issues before they become critical. Dow says C3.ai has reduced its downtime by 20%, which directly impacts production volume, revenue, and profitability.
Similarly, Georgia Pacific (which manufactures paper, packaging, and building materials) has rolled out C3.ai’s Reliability platform to monitor over 200 large production assets, with plans to expand the partnership further. Georgia Pacific has already seen a 5% increase in equipment efficiency, and management says employees now spend 80% of their time solving problems rather than looking for them.
C3.ai sells its applications directly to businesses, but it also sells them through its extensive partnership network which includes all major cloud platforms like Microsoft Azure and Amazon Web Services. Those partners offer C3.ai’s applications to their customers to give them more AI options, and C3.ai gets the benefit of accessing a much larger pool of…
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