2 Best Artificial Intelligence Stocks to Buy in October

The artificial intelligence (AI) market has created some monster growth stocks already, but companies involved in enabling this technological revolution are still seeing growing opportunities. Here are two AI leaders that could be profitable investments over the next year and beyond.

1. C3.ai

C3.ai's (NYSE: AI) recent growth has been overshadowed by the stellar performance at Palantir Technologies, but investors shouldn't overlook C3. It recently reported accelerating revenue increases for the sixth consecutive quarter, which could set the stage for excellent returns over the next year.

C3.ai continues to expand its sales in North America and Europe. In the latest fiscal quarter, it closed 71 agreements. New deals were forged with several clients, including GSK (formerly GlaxoSmithKline), Dolce & Gabbana, and the U.S. Department of Defense.

It's also expanding its footprint across state and local governments, with 25 agreements across several states, including Texas, California, and Florida.

All these deals are clear signs that C3.ai's momentum is real. Customers are seeing cost savings using generative AI, and its customer service could solidify long-term relationships with these clients.

Despite the momentum, the stock has drifted down for most of the year. One factor hurting it is C3.ai's weak profitability. Management's guidance calls for a full-year adjusted loss from operations between $95 million and $125 million, which is a lot compared to its revenue guidance of $370 million to $395 million.

Still, the stock appears poised to rebound. The company's net loss is improving year over year, and it's reasonable to expect a profit down the road as the business continues to grow. If investors give the company credit for strong revenue growth, as they did for Palantir over a year ago, C3.ai's share price could rocket higher over the next year.

2. Nvidia

Nvidia (NASDAQ: NVDA) has been one of the best ways to invest in the AI boom in recent years. It is a pure-play on the growing demand for AI-optimized computing hardware. With data centers still in the early stages of upgrading components for AI workloads, Nvidia is still a solid buy.

Thomas Siebel, the CEO of C3.ai, made a comment on his company's last earnings call that speaks to the opportunity for Nvidia. Siebel said that it is very difficult to model the demand trends happening in the AI market right now. He said his company is seeing interest in enterprise AI from organizations it didn't anticipate, including law firms and medical diagnostic companies.