Published on November 17, 2023, 8:32 pm

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One strategy that many investors love is finding stories of individuals who bought stocks at low prices and saw their investment grow exponentially. Companies like Home Depot and Tesla have made a select few shareholders millionaires. These success stories highlight the potential for growth when companies create new business lines or disrupt existing industries. However, it’s important to note that predicting such moves is challenging, and even promising growth stories can encounter setbacks.

For those with a budget of $3,000 looking for the next growth opportunity, stocks with low nominal prices like Palantir (PLTR 3.64%), SoFi (SOFI 1.79%), and Upstart (UPST 5.40%) may hold potential. Despite their affordable share prices, these companies have leveraged AI and innovative technologies to offer unique solutions in their respective industries.

Palantir has gained recognition for its analytical insights powered by AI, specifically in defense and commercial fields. Its software was even credited by the CIA for helping find Osama bin Laden. With its artificial intelligence platform (AIP), Palantir has demonstrated significant productivity gains early on. Customers have reported accomplishing more in a day than in the previous four months while also experiencing increased speed and efficiency in their work processes.

Although Palantir’s financials do not yet reflect the full potential of its AIP software since it has only released a trial version, there has been notable revenue growth compared to previous years. In the first three quarters of 2023 alone, Palantir generated $1.6 billion in revenue—an increase of 16% from 2022. Furthermore, the company turned a net income of $120 million during this time frame, a significant improvement from the $405 million loss in the same period last year.

Despite its impressive performance, Palantir’s shares have seen substantial price increases this year. This has resulted in a relatively high price-to-sales (P/S) ratio of 21, which may deter some potential investors. However, considering the power of Palantir’s AIP software and its potential to drive further growth, even with the pricey valuation, there is still room for significant share price appreciation.

SoFi stands out for its adaptability in the financial industry. Originally known as a student lender, SoFi pivoted heavily into banking and fintech during the pandemic. Through strategic acquisitions like Golden Pacific Bancorp, Galileo, and Technisys, SoFi has expanded its capabilities to offer banking products without relying on external partners. This approach has contributed to a significant increase in its customer base, which now boasts nearly 7 million customers who have purchased over 10 million products.

The financial results also reflect SoFi’s growth. In the first nine months of 2023, SoFi generated $1.5 billion in revenue—a remarkable 35% increase compared to the previous year. While expenses also rose during this period resulting in a net loss of $349 million, up from $280 million in 2022, SoFi’s stock has gained almost 50% this year following the lifting of the student loan payment moratorium.

With a P/S ratio just over 3, SoFi could be considered undervalued given its rapid customer acquisition and strong financial performance. As more individuals turn to digital banking solutions like SoFi’s offerings continue to expand their customer base.

Upstart aims to disrupt traditional credit evaluation models by leveraging AI-based technology that replaces FICO scores—an industry standard since 1989 with little changes since then. This untapped market presents a significant growth opportunity, considering that over $4 trillion in loans are originated each year.

Initially evaluating personal loans, Upstart is expanding into other areas such as auto loans, small business loans, and home equity lines of credit. While revenue growth was impressive, reaching triple digits in the first quarter of 2022, increased interest rates disrupted the company’s business lines. Consequently, revenue dropped 46% to $373 million in the first nine months of 2023 compared to the previous year. Net losses also widened from $53 million in 2022 to $198 million during the same period this year.

Despite its recent challenges, the credit industry will likely benefit from embracing AI-based scoring like Upstart’s technology. With a P/S ratio of 4, Upstart may be an attractive investment opportunity for growth investors who are seeking exposure to the AI industry.

In conclusion, companies like Palantir, SoFi, and Upstart have leveraged generative AI and innovative technologies to disrupt their industries and drive growth. While their financial performance may vary, these companies offer unique value propositions that have caught the attention of

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