For investors fortunate enough to have backed Nvidia Corporation early in its ascent, the unprecedented surge in the chipmaker’s stock price over the past year has been nothing short of phenomenal. As artificial intelligence capabilities rapidly advanced, catalyzed by the viral popularity of ChatGPT, Nvidia found itself squarely at the forefront of the AI revolution as a leading designer of the powerful chips powering these revolutionary technologies.
The company’s market capitalization skyrocketed from around $600 billion to well over $1 trillion in just a matter of months, minting potentially life-changing returns for its shareholders. But as is often the case with such meteoric rises, many investors missed the boat entirely on Nvidia’s stratospheric stock run.
The burning question on the minds of many now is: What could be the next “Nvidia” – an innovative tech company poised to experience explosive growth and deliver generational wealth to its early backers? While such opportunities are exceedingly rare, a few contenders have emerged that may fit the bill according to analysts.
Palantir’s AI Growth Runway
One company repeatedly cited as having substantial upside potential is Palantir Technologies. The data analytics software firm specializes in using artificial intelligence to help organizations across the public and private sectors gain valuable insights and make better operational decisions.
“Palantir looks to have many years of growth ahead,” says Jake Lerch, a contributor for investing publication The Motley Fool. “What makes for a once-in-a-generation stock buying opportunity? For me, the most important factor is a secular growth story. And today, nothing fits that bill better than the rise of artificial intelligence.”
Lerch highlights how Palantir’s AI-driven platforms can deliver value to an extremely diverse array of customers and use cases – from law enforcement attempting to combat cybercrime to healthcare providers striving for improved patient outcomes. As AI capabilities continue advancing rapidly, the results and efficiencies enabled by Palantir’s software could become ever more compelling.
The company remains in its relative infancy too, having initially focused on governmental organizations and national security before more recently expanding aggressively into the commercial sector. Commercial revenues grew by 32% year-over-year in the latest quarter, now comprising nearly half of Palantir’s total sales.
“American companies are flocking to Palantir,” observes Lerch. “Yet the company still has ample room to grow — a fantastic combination for investors.”
Axon’s Pioneering Public Safety Tech
Another potential “generational” tech play highlighted is Axon Enterprise, the company best known for pioneering the TASER non-lethal weapons used by law enforcement. However, Axon has rapidly evolved far beyond just TASERs into a full-suite provider of innovative cloud and technology solutions for public safety.
“Years from now, investors may look back at Axon as a generational company that hid in plain sight,” argues Motley Fool contributor Justin Pope. “The company started with Tasers but has evolved into a full-fledged technology business offering cloud-based solutions for law enforcement.”
In addition to non-lethal weapons, Axon’s product lineup includes body cameras, digital evidence management software, and operations tools – all aimed at improving accountability, reducing conflicts, and keeping communities safer. The company’s recurring cloud revenue model and retention rates over 120% illustrate its entrenched position and consistent growth.
While Axon’s stock has already delivered monumental returns of over 54,000% since going public, Pope sees considerably more upside remaining: “The business still does ‘just’ $1.5 billion in annual revenue. Management estimates that its current addressable market is $63 billion, leaving a clear opportunity for growth over the coming decade and beyond.”
Sea Limited’s Rising E-Commerce Tide
For investors seeking international tech exposure, one intriguing prospect outside the U.S. is Sea Limited – a Southeast Asian company operating leading online gaming, e-commerce, and fintech businesses across the high-growth region.
“Considering the successes of Amazon and MercadoLibre, e-commerce conglomerates have become a source of outsize investor returns,” notes Will Healy, another Motley Fool contributor. “As these e-commerce companies branched out into tech-based businesses, they leveraged their names and frequently-visited websites into multiple sources of revenue.”
While late-comers who missed the staggering rise of Amazon and Latin America’s MercadoLibre, Sea Limited could represent a compelling opportunity to get in early on an e-conglomerate serving Southeast Asia’s rapidly emergining digital economies. The company’s core markets spanning the region constitute an addressable consumer base of over 630 million people.
Having experienced some turbulence that sent its stock plunging around 85% from its highs, Sea now appears to be steadying its ship and positioning for a major rebound. Its Shopee e-commerce unit is doubling down on logistics investments in its home region, while its gaming arm Garena is working towards regaining approval for its popular Free Fire title in the lucrative Indian market after having been temporarily banned.
“Recovery in gaming could be game-changing for Sea Limited,” suggests Healy. The company recently achieved its first full year of profitability in 2023 with $163 million in net income – a milestone that could catalyze a re-rating higher. Analysts forecast Sea’s earnings could surge 159% in 2025, potentially fueling a major recovery rally in its downtrodden stock price.
The Pursuit of the Next “Unicorn”
Of course, identifying a true “once-in-a-generation” investment opportunity on the magnitude of a Nvidia or Amazon in their prime is easier said than done. Such outsize successes are the exception rather than the norm, and often only become evident in hindsight.
Still, the allure of potentially catching the “next big thing” before it takes off will always cast a magnetic pull on ambitious investors. While far from a sure bet, the artificial intelligence and e-commerce revolutions spearheaded by the likes of Palantir, Axon, and Sea Limited represent tangible avenues through which such generational wealth creation could potentially occur.
For those willing to embrace the heightened risks in pursuit of greater rewards, establishing an early stake in disruptive, high-growth innovators like these may prove to be a venture well worth taking in the decades ahead. As always, comprehensive research and prudent diversification remain crucial when attempting to reap the full spoils of the market’s elusive “unicorns.”
