The explosive growth of the artificial intelligence (AI) market has minted a lot of millionaires. For example, a modest $3,000 investment in the AI chipmaker Nvidia just 10 years ago would be worth nearly $1.5 million today.
But with a market cap of $3.6 trillion, it could be tough for Nvidia to replicate those millionaire-making gains over the next decade. Therefore, investors looking for those kinds of life-changing returns should seek out smaller companies that have more room to grow. I believe these three companies -- Symbotic (NASDAQ: SYM), Serve Robotics (NASDAQ: SERV), and Lemonade (NYSE: LMND) -- might just make the cut.
Image source: Getty Images.
1. Symbotic
Symbotic produces fully autonomous robots for processing pallets in warehouses. It claims a $50 million investment in just one of its modules (which includes its robots and software) can generate $250 million in lifetime savings over 25 years. Its top customer is Walmart, which tasked the company with automating all of its U.S. regional distribution centers over the next decade. That deal accounted for 88% of Symbotic's revenue in fiscal 2023 (which ended last September). Walmart is also one of Symbotic's leading investors.
Symbotic is overwhelmingly dependent on Walmart, but it's been gaining additional major customers like Target, Albertsons, and C&S Wholesale. It's also providing more robots to GreenBox, a new warehouse-as-a-service joint venture it launched with its big backer SoftBank last year.
Symbotic's revenue jumped 55% in fiscal 2024, and analysts expect its top line to keep growing 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 it to turn profitable on a generally accepted accounting principles (GAAP) basis in 2025.
With an enterprise value of $3.1 billion, Symbotic's stock still looks cheap at 1.3 times this year's sales. It faces some near-term macro and competitive headwinds in the warehouse automation space, but it might just become a millionaire-maker stock over the next few years.
2. Serve Robotics
Serve Robotics develops autonomous sidewalk delivery robots. It was originally created as a unit of Postmates, which was acquired by Uber Technologies in 2020. Uber spun off Serve in 2021, but it still uses its robots to fulfill some of Uber Eats' orders in Los Angeles.
Serve still generates all of its revenue from Uber, and it only operated 59 active robots across the Los Angeles area in the third quarter of 2024. But in 2025, it plans to deploy up to 2,000 robots for Uber Eats across the L.A. and Dallas-Fort Worth metro areas.
For 2024, analysts expect Serve to generate less than $2 million in revenue as it racks up a net loss of $34 million. But in 2025, they expect its revenue to jump to $13 million as it narrows its net loss to $31 million. In 2026, they see its revenue more than quadrupling to nearly $60 million as it narrows its net loss to $25 million. We should take those estimates with a grain of salt, but Serve's business could start gaining momentum as more businesses use its robots to make short-range deliveries. That growth could help it attract more customers to reduce its dependence on Uber.
With an enterprise value of $379 million, Serve doesn't seem terribly expensive at 6 times its 2026 sales. It remains a highly speculative stock, but it could still have plenty of upside potential and counts Nvidia as one of its top investors.
3. Lemonade
Lemonade is an online insurance company that simplifies the onboarding and claims process with its AI-powered chatbots. That simple digital-first approach made it popular with younger and first-time insurance buyers, and more than 70% of its customers were under the age of 35 at the time of its initial public offering in 2020. It initially only offered renters and homeowners insurance, but it now offers term life, pet health, and auto insurance policies. It ended its latest quarter with 2.31 million customers, compared to just over 1 million customers at the end of 2020.
For 2024, Lemonade expects its in-force premiums to rise 26%, its gross earned premiums to grow 22%-23%, and its total revenue to increase 21%-22%. It also sees its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) improving from negative $173 million in 2023 to negative $151 million-$155 million in 2024.
Lemonade hasn't proven its business model is sustainable yet, but it's growing much faster than its larger competitors. With an enterprise value of $2.9 billion, it trades at just 4 times next year's sales -- so it might generate millionaire-maker gains if it scales up its business, narrows its losses, and widens its moat.
Should you invest $1,000 in Symbotic right now?
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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, Serve Robotics, Target, Uber Technologies, and Walmart. 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.
