The AI Revolution: Two Stocks Set to Dominate the Market in July

The world of artificial intelligence (AI) is a whirlwind of opportunity and innovation. As we have just gone through the first half of 2023, the AI industry is exploding with opportunity, and investors are on a never-ending search for the next big thing. Alphabet, Google's parent company, and UiPath, a firm specialising in AI-powered business automation, have caught the interest of market observers and investors.

Alphabet

Alphabet, the AI industry's big player, is always ready to use its substantial cash reserves to fuel long-term growth. Meanwhile, UiPath is a hidden gem that investors have yet to fully appreciate, thanks to its unwavering focus on business automation.

The AI industry had been simmering for years before the release of OpenAI's ChatGPT chatbot. In 2023, the industry erupted. This development has heightened interest in machine learning and the vast business opportunities available in the AI market.

Many stock buyers are in search of which AI stock to buy to reap future gains.

Alphabet, which many frequently refer to as the ultimate stock to own, is a powerhouse in the field of artificial intelligence. Over the last four quarters, this cash-generating machine has generated $62 billion in free cash flow from $285 billion in top-line revenues. This impressive feat was accomplished primarily through digital ad sales during the market's inflation-induced crisis.

Many are motivated by the fact that Alphabet's stock has remained relatively stable for the past two years, while its trailing revenues have increased by 29%. This represents a once-in-a-lifetime opportunity to purchase Alphabet stock at a low valuation of 5.4 times sales and 19 times forward earnings.

Furthermore, Alphabet's business model is built to be adaptable and resilient in the face of market shifts. Alphabet is ready to capitalise on alternative business operations such as self-driving car services, cloud computing platforms, and medical research.

AI is the common thread connecting these potential growth drivers. Alphabet's artificial intelligence capabilities are unparalleled, and the company is poised to develop consumer-ready products based on these assets in the coming years. That’s why everyone wants a piece of the cake.

UiPath

Let us now turn our attention to UiPath, an under-the-radar company that is making waves in the AI industry. UiPath is the unsung hero of robotic process automation, providing a toolkit for every job, from simple daily tasks to complex business processes.

Despite being at the epicentre of the AI boom, UiPath's stock has been largely overlooked, falling 75% in the last two years. However, for those who believe in the power of AI and business automation, this could be a golden opportunity.

AI and automation in business are still in their early stages, with years of growth ahead. UiPath may be sitting on a gold mine as more businesses recognise the benefits of automation.

While UiPath may not be the current AI industry darling, its focus on AI and automation could make it the Cinderella story of the decade. The current share price could be the pumpkin carriage that transports you to the royal ball of profitable stock returns. So, you may want to look at them.

You should always talk to your financial advisor AND do your own research before investing as this is purely observatory advice. (Disclaimer).