The complete collapse of OpenAI over the weekend caught everyone by surprise. The privately held artificial intelligence (fired its CEO and co-founder Sam Altman leading several top people at the firm to quit in protest. Hundreds of employees demanded the board of directors resign.) outfit
Financial backer Microsoft (NASDAQ:MSFT) was also caught flatfooted. Having invested billions into the company and integrated ChatGPT into all aspects of its business, the tech giant is the investor with the most to lose. CEO Satya Nadella immediately hired Altman and OpenAI co-founder Greg Brockman, promising to provide them “with the resources needed for their success.”
OpenAI approached rival Anthropic about a merger. Others are trying to lure away employees with large financial incentives. For awhile it seemed as if the future of OpenAI’s survival was in doubt. But Altman was reinstalled as CEO and the board that ousted him is leaving.
Despite the tumult, AI still represents fantastic opportunities for investors to profit. What follows are three AI stocks to buy that can turn patient investors into millionaires.
Salesforce (NYSE:CRM) got its start as a software leader for customer relationship management ( ). Annual revenue has grown at a compounded annual rate of 26% for at least the past decade, rising from less than $3 billion to over $31 billion today. Now AI is poised to accelerate its growth for the next 10 years.
Chairman and CEO Marc Benioff told analysts Saleforce is “transforming from being not only the number one CRM, but to the number one AI CRM.” AI is the force behind Salesforce’s current performance. Quarterly revenue jumped 11% to $8.6 billion while adjusted operating margins widened to 31.6% from 19.9%. Benioff says AI pushed the company into being the world’s third-largest enterprise software company by revenue.
Not only is Salesforce driving its own results higher, but it helping others to grow. Through a $500 million generative AI fund, Salesforce is financing AI businesses like Anthropic, Cohere, and Hugging Face. In-house and in business, Salesforce is a leading AI entrepreneur itself. It was also the one trying to lure away OpenAI employees with promises of financial rewards.
The stock is not cheap, but there is no stopping its growth now. Buying Salesforce stock will turn investors with a sufficient investment horizon into millionaires.
Chinese search engine Baidu (NASDAQ:BIDU) has also transformed itself into something new. It recently released its version of ChatGPT called Ernie Bot and detailed its latest fourth-generation generative AI model. Baidu maintains it is every bit as powerful in its performance as OpenAI’s chatbot. In just-reported earnings, CFO Rong Luo promised the tech stock will continue prioritizing AI investments. “We will do so with an unrelenting focus on efficiency and strategic resource allocation,” he said.
Co-founder and CEO Robin Li said AI will “set the stage for sustained multi-year revenue and profit expansion within” Baidu’s Ernie ecosystem. Like Salesforce, Baidu is using AI to transform itself and other businesses.
China, of course, is a massive market to target. It is also largely closed off to most outside investors in areas where Beijing believes it is critical to Chinese superiority. As the country’s premiere AI stock, Baidu will have virtually unfettered opportunity to expand.
Baidu’s stock is very cheap. It trades at 10 times earnings estimates and a bargain-basement 11x free cash flow (). Minting millionaires will be the search giant’s next most important accomplishment in the coming years.
Super Micro Computer (SMCI)
Super Micro Computer (NASDAQ:SMCI) might not be a household name just yet, but there’s a better-than-even chance Supermicro as it is called will eventually become one. A semiconductor equipment manufacturer, it builds servers, storage solutions, switch systems, and more. Supermicro was successful on its own, but its close partnership with Nvidia (NASDAQ:NVDA) helped supercharge the equipment maker’s performance.
President and CEO Charles Liang says it is by working with Nvidia that its customers can deploy generative AI quickly within their operations. By partnering with NVIDIA to design the most advanced systems for AI training and high-performance computing applications,” Liang said “Our building block architecture enables us to be first to market with the latest technology, allowing customers to deploy generative AI faster than ever before.”
Annual revenue now exceeds $7 billion from $1.1 billion 10 years ago, a 20% CAGR. Expect that to increase exponentially. A new facility in Malaysia that will open next year will double Supermicro’s manufacturing capacity. The market sees the potential. Shares more than tripled in 2023. Yet at 15 times earnings estimates, the AI stock shows it still has the potential to create new millionaires amongst investors willing to make a bet on its future.
On the date of publication, Rich Duprey did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.