2 Growth stocks from the field of artificial intelligence to buy during the crisis

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In history, the technology has never advanced as quickly as it is now. It is becoming increasingly difficult for investors to keep track of the multitude of innovative technology companies, each with its own vision for the future.

But perhaps no technology is as disruptive as artificial intelligence (AI), which is already being used to perform highly complex tasks in a fraction of the time it takes humans to do them. According to one estimate, by 2030, up to 70% of companies worldwide will have integrated AI into their business in some form, adding $13 trillion in additional output to the global economy.

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There will be no shortage of opportunities in this sector over the next decade, but these two stocks are a good place to start as they trade at significant discounts to their all-time highs amid the general sell-off in the technology sector.

1. The case for c3ai

C3ai (WKN: A2QJVE, 2.58%) is the first AI company of its kind. The stock is volatile because the company is not yet profitable and its revenue growth has fallen short of expectations since its december 2020 IPO. But that's often part of breaking new ground in a brand new industry.

C3.Ai is a good starting point for investors looking to get into the artificial intelligence sector, as the company develops both ready-made and customizable AI applications for 11 different industries. For most of its customers, C3.Ai the one-stop shop for their AI needs, and they may not have access to the technology otherwise.

The oil and gas industry is C3's largest revenue generator.Ai. It accounted for 54% of the $252 million in revenue in fiscal 2022, which ended on 30. April ended. Company's technology helps oil giants like shell monitor thousands of assets to predict potentially catastrophic failures, saving time, money and negative environmental impact. C3.Ai has developed a whole range of applications specifically for the fossil fuel sector that also help these companies control their carbon emissions and operate more cleanly.

But C3.Ai also has the recognition of the world's largest tech companies. It has partnerships with microsoft and alphabet's google to jointly develop AI applications that their customers can better use using cloud computing technology.

C3's stock price.Ai is down 88% from its all-time high and therefore carries risks. The company's fiscal year 2022 (which ended on 30. April ended) 192 million. US dollars lost, but the most important thing is that it is 959 million. Has U.S. Dollars in cash and short-term investments on its balance sheet, which means it can get by on that loss rate for the next five years before needing more cash. C3.Ai has a high gross profit margin of 81. So once the company reaches a certain size, it can reduce its operating costs to make positive profits. The key question, however, is how long it will take to reach that goal, if ever. It's always an unknown with new companies in new industries.

But C3.Ai estimates its AI software could be worth $596 billion by 2025. Since the company's market value is currently only $2 billion, it might be worth a small bet for investors who are willing to take risks.

2. The argument for upstart

Upstart holdings (WKN: A2QJL7, 1.64%) is a good example of how artificial intelligence is being used to improve decades-old processes. Its AI-powered algorithm is designed to replace fair isaac's FICO credit scoring system, which has traditionally been used to evaluate a potential borrower's creditworthiness. Upstart is able to provide up to 1.Analyze 600 pieces of data about an applicant and make an immediate credit decision in 74% of cases – a feat that takes human examiners days or even weeks to accomplish.

Fifty-seven banks and credit unions have opted to use upstart's algorithm, and one bank has abandoned FICO scores altogether in favor of upstart. This is important because upstart is not a lender, it makes loans for its bank partners for a fee. In the first quarter of 2022, the company had to deviate somewhat from this strategy in light of the turmoil in the credit market. Upstart took new loans worth 345 million. U.S. Dollars on its own balance sheet, spooking investors'.

This came on top of the loans worth 252 million. US dollars, which the company already held mainly for research and development purposes. Management says the increase is temporary, and it's important to know that the 345 million increase is. US dollars only 7% of the total 4.5 billion. U.S. Dollars of new business in the quarter.

This is partly a symptom of upstart's rapid growth, fueled by its move into auto lending. Since the 2021 launch of its auto sales and lending software, upstart auto retail, 35 automakers have deployed the platform in 525 dealerships. That's up 224% from 162 retailers in the first quarter of last year.

Upstart generated revenue of 849 million in 2021. U.S. Dollars, a whopping 264% increase over the previous year. Upstart expects revenue this year to top the. US dollars could exceed. While this is a slowdown in growth, consumers are facing higher interest rates and a tougher economy, which could dampen demand for credit.

But the company continues to expand into a business that it estimates is worth $6 trillion. With the company's stock price down 90% since its all-time high, this could be a good opportunity to bet on the future of credit scoring for the long term.

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Suzanne frey, an executive at alphabet, is a member of the board of the motley fool.