The artificial intelligence (AI) revolution has already helped spur big gains for the S&P/ASX 200 Index (ASX: XJO) tech stock we'll look at below.
Indeed, if I were going to invest in just one ASX company and one United States-listed company to ride the surging global interest in generative AI and machine learning, they would be Nvidia Corporation (NASDAQ: NVDA) and ASX 200 tech stock Megaport Ltd (ASX: MP1).
Nvidia has tapped deep into the AI money flow with its generative AI chips. That's helped spur a 212% rally in the Nvidia share price over the past 12 months. Atop the past few years of stellar performance, it gives the US-based company an eye-watering market cap of US$3.11 trillion (AU$4.69 trillion).
The Megaport share price has also been on a tear. Over the past year, shares in the ASX 200 tech stock have soared 71%. This gives Megaport a market cap of AU$1.88 billion.
Both stocks are major beneficiaries of the AI revolution, which really got underway with the introduction of OpenAI's ChatGPT towards the end of 2022.
Less than two years later we see companies the world over racing to incorporate generative AI to streamline their operations.
While the long-term impacts on the labour market remain an unknown concern, AI appears poised to spur innovations in healthcare, manufacturing, finance and retail, to name a few.
But for businesses to make the most of it, they need to be able to connect easily.
Which brings us back to ASX 200 tech stock Megaport.
Image source: Getty Images
What's happening with the ASX 200 tech stock?
Megaport is a network as a Service (NaaS) solutions provider offering "elastic interconnection services".
In a nutshell, the company's software layer provides users with an easy way to create and manage network connections. Through its network of more than 113 unique data centre operators, businesses can deploy private point-to-point connectivity between any of the locations on Megaport's global network infrastructure.
Its customer connections to major cloud service providers include powerhouse companies like Microsoft Corp (NASDAQ: MSFT) and Google Cloud Platform, the domain of Alphabet Inc (NASDAQ: GOOG).
Among the ASX 200 tech stock's strengths is its dedicated, founder-led management team.
As legendary investor Warren Buffett says, "A great manager is as important as a great business."
Now Megaport's founder, Bevan Slattery will exit his role as chairman of the board at the end of this week. Director Melinda Snowden will take the top spot.
But Slattery will continue to offer advice going forward.
"As founder, I am passionate about Megaport and its success, and I will always be available to the team to provide strategic advice and guidance," he said last week (quoted by The Australian).
On the financial front
As for Megaport's recent financial metrics, the AI revolution looks to be already helping drive growth.
At its last quarterly update, the ASX 200 tech stock reported a 30% year on year boost in revenue to $49.5 million.
Earnings before interest, tax, depreciation, and amortisation (EBITDA) soared by 92% to $14 million.
And Megaport had a net cash position of $59.2 million, up from $45.8 million at the end of December.
The ASX 200 tech stock also upgraded its earnings guidance for the full financial year.
Megaport lifted its FY 2024 EBITDA to between $56 million and $58 million, up from the company's prior guidance of $51 million to $57 million.
