2 Artificial Intelligence (AI) Stocks That Could Make You a Millionaire

Becoming a millionaire off a single stock pick isn’t likely unless you have a sizable initial investment. However, finding stocks with outsize potential to beat the market (often measured by the S&P 500 or Nasdaq) can accelerate your path to becoming a millionaire — a goal many investors (including myself) have.

So, what stocks have the potential to beat the S&P 500? I usually look for a few factors:

• The company is growing faster than the market (I use 10% as a baseline).
• The stock can be purchased at a fair price.
• The company has a sustainable business model.

If I can find a reasonably priced stock that is growing quicker than the S&P 500, I consider buying it since the company has a fantastic chance of giving me outsize returns. This is far from the only way to beat the market, but it’s my preferred method.

With that in mind, I’ve identified a few stocks that check all the boxes that could accelerate your path to becoming a millionaire.

UiPath

UiPath (PATH 0.26%) makes robotic process automation (RPA) software. This gives its clients the tools they need to automate repetitive tasks. UiPath also integrates artificial intelligence (AI) into its product to expand the number of tasks it can automate.

As a subscription-based service that becomes deeply integrated into a company’s systems once deployed, UiPath’s product meets the criteria for a sustainable business model.

UiPath is also experiencing healthy growth, with its annual recurring revenue (ARR) rising 22% to $1.46 billion in the 2024 fourth quarter (ending Jan. 31). Furthermore, UiPath has become more efficient, posting a $15 million operating profit in the quarter, for a 4% margin.

With UiPath posting strong growth and turning profitable, it’s looking like an attractive investment, but only if it can be bought at the right price.

Unlike many of its tech peers, UiPath doesn’t trade at 15 or 20 times sales. It can be bought for just 8.1 times sales. This is a reasonable price for a software company, allowing UiPath to check all three boxes on the list.

Adobe

Adobe (ADBE 0.87%) is a well-recognized leader in the digital media space. But that lead is under attack with many free AI programs that allow users to generate images. Adobe is fighting back with its Firefly generative AI product, which aims to be the best-in-class AI image generator.

It’s also working to integrate AI into its various content creation platforms, although this will take some time. Still, with nearly every company in the world having some sort of Adobe product, it will take a lot more time to uproot Adobe from its leadership position.

Adobe isn’t growing as fast as some of its younger software peers; in the 2024 first quarter (ending March 1), its revenue rose 11% year over year to $5.18 billion. Management also gave guidance for the second quarter, which only indicated 9.5% revenue growth.

However, with how mature Adobe is, using revenue growth to assess its market-beating potential isn’t wise. Instead, investors should look at earnings growth.

In the first quarter, Adobe’s earnings per share (EPS) declined year over year due to a one-time $1 billion termination fee due to its failed acquisition of Figma. If that is adjusted for, EPS would have risen around 22%. That also tracks with management’s econd-quarter EPS guidance of $3.35 to $3.40 EPS, indicating 20% year-over-year growth.

Due to Adobe’s skewed quarter, the trailing price-to-earnings (P/E) metric is no longer useful. Instead, we’ll use its forward P/E. The stock trades for just 26 times forward earnings right now. If the stock stays flat over the next year and the company hits analyst projections, it will be valued well below its normal levels.

ADBE PE ratio data by YCharts.

This seems reasonably priced, which gives Adobe the nod as a company that can crush the S&P 500 over the long haul.