Goldman Sachs notes that the tech sector has been the driving force behind the U.S. stock market since 2010, generating 40% of the equity markets’ gains over the past 14 years.
Many tech stocks have delivered outsize gains since 2010. For example, $1,000 invested in Advanced Micro Devices would now be worth more than $23,000. Other companies — including Microsoft, Amazon, and Netflix — have also been multibaggers during this period, while Nvidia recorded stunning gains from multiple catalysts, the latest one being artificial intelligence (AI).
With AI still in its early phases of growth, Bloomberg estimates that the technology could generate $1.3 trillion in revenue in 2032, up from this year’s estimate of $137 billion. So, if you’re looking to build a million-dollar portfolio, you might do well to buy AI-focused companies and hold them for a long time.
In this article, we will take a closer look at two names that could soar in the long run, delivering outstanding gains to investors while contributing toward a million-dollar portfolio with AI-fueled growth.
1. Palantir Technologies
Companies like Nvidia have been in the limelight with their powerful chips capable of training AI models. But those models eventually need to be deployed for real-world applications. Palantir Technologies (NYSE: PLTR) is helping customers do just that with its Artificial Intelligence Platform (AIP).
AIP users can build generative AI applications, integrate large language models (LLMs) into their workflows, and deploy pre-built AI applications. Palantir has smartly been conducting its “boot camps” to show customers how to deploy generative AI for their businesses’ needs. This strategy has landed sizable contracts.
And customers signing up for AIP are reportedly looking to deploy the platform across their operations, creating a land-and-expand effect that significantly increased Palantir’s commercial customer base and contract value. That share of its business was up 55% year over year in the second quarter, exceeding the 41% increase in its overall customer base, which includes its government clients.
The company booked $946 million in total contract value in the second quarter, an increase of 47% from the prior-year period. And AI has helped boost the net retention rate (NRR) to 114%, up 300 basis points. (A reading of more than 100% means that existing customers are spending more money year over year.)
This metric does not include revenue from new customers acquired in the past 12 months, management says, so it has not yet fully captured the acceleration in its U.S. commercial business over the past year.
The 26% year-over-year increase to $4.3 billion in the company’s total remaining deal value is a further indicator of the impact of AI on its business. This metric refers to the total remaining value of Palantir’s contracts at the end of a reporting period. Given that the company has generated $2.5 billion in revenue in the trailing 12 months, the sizable remaining value in its deals points toward healthier revenue growth in the future.
Palantir says that its adjusted operating margin jumped by 12 percentage points in the second quarter to 37% because of “the strong unit economics of our business.” Translation: The company is generating more profit from each customer, driven by the increased spending on its products thanks to AIP.
Consensus estimates put Palantir’s annual earnings growth at 57% for the next five years. And with the global AI market expected to increase beyond the next five years, the company could sustain that healthy earnings growth for a longer period.
So if you’re looking for an AI stock with the long-term potential that could contribute toward making a million-dollar portfolio, you would do well to take a closer look at Palantir before it soars higher.
2. Oracle
The software platforms that Palantir offers to customers run on cloud infrastructure provided by the likes of Oracle (NYSE: ORCL). The two companies are already in a partnership, with Palantir using Oracle’s distributed cloud and AI infrastructure for its AIP, among other offerings. And it’s not the only company using Oracle’s cloud to reach customers.
Companies have been renting Oracle’s cloud infrastructure for training AI models, apart from offering their cloud-based AI services on its cloud platform. The demand for Oracle’s cloud infrastructure has been strong and exceeding availability. Management said on the September earnings call that its infrastructure cloud services business has attained an annualized revenue run rate of $8.6 billion, driven by a 56% increase in consumption.
Oracle has generated just under $54 billion in revenue in the past year. So, the AI-driven increase in demand for its cloud infrastructure has started moving the needle in a big way. That robust demand is the reason its remaining performance obligations (RPO) shot up 53% year over year to $99 billion in the first quarter of fiscal 2025.
RPO refers to the total value of a company’s contracts that will be fulfilled at a future date. So the faster growth in this metric when compared to Oracle’s revenue growth last quarter is an indication of stronger top-line growth in the future.
Goldman Sachs estimates that infrastructure as a service is set to generate $580 billion in revenue by 2030 powered by AI, which means that Oracle has a massive opportunity. Consensus estimates project an acceleration in growth following a 6% increase in revenue in the previous fiscal year to $53 billion.
Considering the huge addressable opportunity, Oracle could maintain strong growth over the long run as well. Finally, with the stock trading at 28 times forward earnings as compared to the U.S. tech sector’s average price-to-earnings ratio of 46, investors are getting a good deal on this AI stock. It seems like a good fit if you’re looking to create a million-dollar portfolio.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Amazon, Goldman Sachs Group, Microsoft, Netflix, Nvidia, Oracle, and Palantir Technologies. The Motley Fool 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.
2 Millionaire-Maker Artificial Intelligence (AI) Stocks was originally published by The Motley Fool
