Artificial intelligence (AI) is a once-in-a-generation investment opportunity. Leading AI stocks have soared over the last few years, as the AI market is projected to grow 27% annually to reach $826 billion by 2030, according to Statista. Here are two stocks that could soar over the long term.
1. C3.ai
The cost of building advanced AI models is decreasing, and this could translate to explosive demand for AI software in the coming years. C3.ai (NYSE: AI) is the dark horse in the AI software market right now, with Palantir taking the spotlight. However, C3's accelerating growth over the last year shows that it is poised to deliver monster gains for shareholders.
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Organizations are using C3.ai's AI applications for predicting demand, managing supply chains, and streamlining operations. It has customers across several industries, including the U.S. military. In the January-ending fiscal second quarter, the company closed 66 agreements, representing a year-over-year increase of 72%.
C3.ai's revenue grew 26% year over year last quarter, up from 17% in the year-ago quarter. It's driving more sales momentum through its strategic alliance with Microsoft Azure. The partnership led to 28 new agreements last quarter with customers across nine industries.
Despite strong top-line growth, the stock is currently down 28% in 2025 at this writing, as the company continues to report losses on the bottom line. It recognizes revenue over the subscription term with customers but accounts for the majority of costs as incurred, which means an acceleration in sales can lead to large losses early on. As revenue continues to grow, higher margins should follow. On that score, management expects the business to generate positive free cash flow by fiscal Q4 2025.
This has been a volatile stock, but C3.ai's growing revenue and strategic partnerships signal a bright future for the company. Investors that hold shares for five years could be well rewarded.
2. Dell Technologies
Most people know Dell Technologies (NYSE: DELL) as a PC company, but it's also a leader in servers. Its infrastructure solutions business is booming, as demand for AI-optimized servers takes off. The stock is up almost 400% over the last five years, but it still looks undervalued based on recent financial results.
Dell's business is roughly split between PCs (client solutions) and servers (infrastructure solutions). The PC business continues to slowly recover from a recent slump, but infrastructure solutions revenue continues to grow at high rates, up 22% year-over-year in the fourth quarter.
An investment in Dell is a bet on the growing demand for AI. Dell offers the PowerEdge XE9712, an Nvidia-powered AI factory that is built for large-scale AI deployments and large language model training. Dell just signed a deal to supply servers for Elon Musk's xAI, bringing its AI server backlog to $9 billion.
Another catalyst that should benefit the stock is the PC refresh cycle, where the end of life for Microsoft's Windows 10 could create a strong incentive for businesses and consumers to upgrade over the next few years.
Given the opportunities, management recently raised the annual dividend by 18% to $2.10. This is based on strong earnings, which grew 14% year-over-year in 2024 on a non-GAAP basis. Analysts expect long-term annualized earnings growth of 13%, yet the stock trades at just 12 times 2025 earnings estimates.
For a leading supplier of servers, a market that should continue to grow in the coming years, the stock's valuation looks attractive and could set the stage for significant gains.
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*Stock Advisor returns as of February 28, 2025
John Ballard has positions in Nvidia. The Motley Fool has positions in and recommends Microsoft, Nvidia, and Palantir Technologies. The Motley Fool recommends C3.ai and 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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
