Missed Out on Nvidia? My Best AI Stocks to Buy and Hold

Missed Nvidia stock’s blazing growth? Discover Paylocity (NASDAQ:PCTY) and another AI growth stock poised for long-term gains

| More on:
The virtual button with the letters AI in a circle hovering above a keyboard, about to be clicked by a cursor.

Source: Getty Images

If you’re an investor who regrets not jumping on the blazing Nvidia (NASDAQ:NVDA) growth train over the past few years, you may get a second or third chance to ride the artificial intelligence (AI) growth wave. Nvidia stock has skyrocketed more than 480% in three short years, fueled by an explosive surge in AI hardware demand. The company’s annualized revenue increased by 320% and operating income soared 607% during that time, thanks to Nvidia’s near-monopoly dominance in AI computing systems.

But while Nvidia’s impressive run is hard to replicate, some lesser-known AI growth stocks are poised to deliver compelling returns in the years ahead. Let’s explore two promising contenders: Paylocity Holding (NASDAQ:PCTY) stock and Globant (NYSE:GLOB).

Paylocity stock: Revolutionizing workplaces with AI

Paylocity is a US$11 billion mid-cap stock transforming human capital management (HCM) through AI-driven innovation. The company serves over 39,000 clients ⁠– mostly small- and medium-sized businesses with 10 to 5,000 employees ⁠– providing payroll, time management, recruiting, and collaboration solutions. Paylocity’s increasingly AI-powered features streamline operations for its customers, many of whom previously relied on manual processes.

One of its recent standout innovations is AI Assist, which enhances user experiences on Paylocity systems that automate workflows, provide actionable insights, and deliver advanced analytics to help small teams make better decisions. For example, the company’s AI-powered tools can help businesses optimize headcount planning or deliver real-time employee feedback, enhancing workplace efficiency and engagement.

Financially, Paylocity is a growth machine. Over the past five years, it has grown revenue at a compound annual growth rate (CAGR) of 26.8%, operating earnings at 41.8%, and free cash flow at 43.4%. The company’s sales climbed from US$519 million in 2019 and may exceed US$1.5 billion in 2025. A fired-up management team is targeting US$2.7 billion in annual revenue over the next decade. The revenue, earnings and cash flow growth momentum is already impressive, yet it’s only getting started on an AI-powered growth journey.

With a forward price-to-earnings (P/E) ratio of 27.5, the stock appears reasonably valued compared to the industry’s average historical P/E above 169.

Despite trading below its all-time highs, Paylocity stock’s 29% gain over the past year could signal the beginning of a new multi-year growth phase. If you’re looking for an AI stock that balances robust revenue growth with profitability and strong cash flow generation, Paylocity stock deserves your attention.

Globant: A leader in AI-driven digital transformation

Globant stock could be another hidden gem in the AI space. This US$9.2 billion tech services company helps businesses across industries adopt AI and cloud technologies to modernize their operations. Globant’s consultancy work spans sectors like entertainment, financial services, retail, and transportation, addressing a massive global market for digital transformation ⁠– one projected to grow from US$2.7 trillion in 2024 to US$12.3 trillion by 2032.

Globant has consistently delivered impressive financial results. Over the past five years, it achieved a 37% CAGR in revenue, a 32.9% CAGR in net income, and a 35.6% CAGR in free cash flow. Operating margins remain solid at over 10%. During the first nine months of 2024, AI-related projects generated $250 million in revenue, marking a 120% increase year-over-year.

Strategic acquisitions are also fueling Globant’s growth. For instance, its recent acquisition of Blankfactor, a specialist in financial services, bolsters its offerings in payments and banking verticals.

The AI growth stock’s forward P/E ratio of 29 and a forward price/earnings-to-growth (PEG) ratio of 0.3 suggest that the AI stock is significantly undervalued relative to its earnings growth potential.

Why Globant and Paylocity are standout AI stocks to buy and hold

Both Paylocity stock and Globant stock are capitalizing on AI’s transformative potential, but in very different ways. Paylocity focuses on automating and optimizing workplace operations for smaller businesses, while Globant enables enterprises to integrate cutting-edge AI into their processes. Their strong financial performance, innovative strategies, and attractive valuations make them compelling options for investors looking to tap into AI’s next wave.

While no stock can guarantee Nvidia-level returns, these two companies are positioned for significant long-term growth. By investing in Paylocity and Globant today, you could be setting yourself up to participate in the AI-driven revolution ⁠– and avoid missing out on the next big investment opportunity.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Brian Paradza has no position in any of the stocks mentioned. The Motley Fool recommends Globant, Nvidia, and Paylocity. The Motley Fool has a disclosure policy.

More on Tech Stocks

analyze data
Tech Stocks

I Just Bought BlackBerry Stock: Here’s Why You Might Want Shares, Too

Here are the key reasons why BlackBerry stock could be one of the most attractive TSX stocks to consider today.

Read more »

data center server racks glow with light
Tech Stocks

Why Hive Could Be the Best Stock to Buy in January 

Bitcoin is trading at its all-time high. However, Hive’s stock continues to trade in the lower range, creating a buying…

Read more »

Rocket lift off through the clouds
Tech Stocks

Could MDA Stock Deliver Big Returns Over the Next 5 Years?

Besides surging demand for space technology, its proven execution capabilities could help MDA Space stock deliver solid returns over the…

Read more »

e-commerce shopping getting a package
Tech Stocks

Why Shopify Could Be the Hottest TSX Stock in 2025

Shopify (TSX:SHOP) stock could lead the TSX higher this year!

Read more »

think thought consider
Tech Stocks

Where Will Celestica Stock Be in 3 Years?

Here’s why I wouldn’t be surprised if Celestica stock maintains its solid upward trajectory over the next three years.

Read more »

Investor wonders if it's safe to buy stocks now
Tech Stocks

Billionaires Are Dropping Apple Stock and Buying This TSX Stock in Bulk

Let's be clear: there's nothing wrong with Apple stock. But investors may not get the value they can from this…

Read more »

data center server racks glow with light
Tech Stocks

OpenText Stock: Buy, Sell, or Hold in 2025?

OpenText is a TSX tech stock which trades at a cheap multiple while offering a tasty yield to shareholders in…

Read more »

Income and growth financial chart
Tech Stocks

This TSX Stock Has Already Soared 151%: Can it Double in 2025?

Whether MDA stock doubles again in 2025 will depend on consistent execution and broader market conditions, but it certainly seems…

Read more »