5 Artificial Intelligence (AI) Stocks Poised for Growth in 2024 and Beyond

Investing
5 Artificial Intelligence (AI) Stocks Poised for Growth in 2024 and Beyond

Artificial intelligence (AI) isn’t just science fiction anymore; it’s transforming our world from self-driving cars on smart roads to facial recognition unlocking our phones. With adoption accelerating across industries, investing in companies at the forefront of this revolution can be highly lucrative.

5 AI Stocks to Invest in 2024

Here are 5 AI stocks with the potential for significant growth in 2024 and beyond, along with the latest news and insights to help you make informed decisions:

Nvidia (NASDAQ: NVDA)

Nvidia’s dominance in graphics processing units (GPUs) fuels the heavy computational needs of AI algorithms. Their latest Ampere architecture boasting 2x the performance of its predecessor makes them the go-to hardware for leading AI companies like Meta and Alphabet. Recent news of Nvidia partnering with Samsung to build an AI supercomputer in South Korea further solidifies their position as the dominant player in AI hardware.

Analyst Take: Morgan Stanley recently upgraded Nvidia to “Overweight” citing their strong market position and potential for growth in AI, gaming, and data center markets.

Alphabet (NASDAQ: GOOGL)

Google’s parent company sits on a mountain of user data, the lifeblood of AI. From its search engine to self-driving cars (Waymo), Alphabet is actively applying AI across its diverse businesses. DeepMind, their AI research lab, recently made breakthroughs in protein folding, showcasing their commitment to pushing the boundaries of machine learning.

Analyst Take: Goldman Sachs remains bullish on Alphabet due to their strong cloud computing business (Google Cloud) and potential for AI monetisation across various offerings.

Microsoft (NASDAQ: MSFT)

Microsoft Azure, the company’s cloud computing platform, offers a suite of AI services, from pre-trained language models to computer vision. Their partnership with OpenAI for ChatGPT and recent acquisition of Activision Blizzard, a leader in gaming AI, demonstrates their commitment to AI across various sectors.

Analyst Take: Bank of America maintains a “Buy” rating on Microsoft citing their Azure growth potential and strong balance sheet, giving them an edge in the AI cloud race.

Palantir Technologies (NASDAQ: PLTR)

Palantir specialises in software platforms that analyse massive datasets, particularly for government and defense agencies. Their Foundry platform helps identify patterns and connections, making them a valuable player in AI-powered data analysis. Recent news of Palantir partnering with IBM on a healthcare data initiative shows their expansion beyond government contracts.

Analyst Take: Citigroup remains cautious on Palantir due to its lack of profitability, but acknowledges their strong technology and potential for growth in commercial markets.

CrowdStrike Holdings (NASDAQ: CRWD)

CrowdStrike uses AI to identify and prevent cyberattacks in real-time. Their Falcon platform leverages machine learning to detect anomalies and proactively protect organisations from emerging threats. Recent news of CrowdStrike expanding its cloud offerings and partnering with Google Cloud Platform positions them well for continued growth in the booming cybersecurity market.

Analyst Take: JP Morgan maintains a “Buy” rating on CrowdStrike citing their dominant market position, recurring revenue model, AI-powered technology, and strategic partnerships.

Top 5 Artificial Intelligence Stock Comparisons

StockPricePerformance (1-Yr)P/E RatioP/S RatioP/G Ratio
Nvidia (NVDA)$309.33225.75%80.9613.174.57
Alphabet (GOOGL)$2780.0358.15%21.095.534.23
Microsoft (MSFT)$330.4068.85%34.4411.253.54
Palantir (PLTR)$19.06131.14%-56.5913.95N/A (negative P/E)
CrowdStrike (CRWD)$244.22195.59%198.6028.457.10
Info: 29th January 2024

Things to remember before AI stock valuation:

Analysing these stocks through established metrics like P/E, P/S, and P/G ratios can offer valuable insights:

  • High P/E Ratios: Like Nvidia’s, they reflect investor expectations of significant future growth, while lower ratios like Alphabet’s might suggest relative value.
  • P/S Ratio: Compares stock price to annual revenue. Higher ratios (CrowdStrike) might indicate premium pricing, while lower ratios (Microsoft) may suggest undervalued potential.
  • P/G Ratio: Compares stock price to expected earnings growth. High ratios (Palantir N/A) imply anticipation of rapid future growth, while lower ratios (Microsoft) might suggest more moderate expectations.

Beyond the Big Five

Look beyond established giants. Exciting smaller AI companies are pioneering niche applications. The next “big thing” could be just around the corner. Consider:

  • C3.ai (AI): Provides AI software for industrial applications, experiencing strong growth in oil & gas and manufacturing sectors.
  • UiPath (PATH): Leading Robotic Process Automation (RPA) company, automating repetitive tasks with AI-powered software robots.
  • SentinelOne (S): Cybersecurity player utilising AI for endpoint protection and threat detection, demonstrating rapid market share gains.

News and Insights

  • AI in Healthcare: The AI healthcare market is projected to reach $66 billion by 2025, with companies like Babylon Health and Verily at the forefront of personalised medicine and medical diagnostics.
  • AI in Sustainability: AI is playing a crucial role in optimising energy usage, waste management, and green technology solutions. Look for companies like Asphaltene and Carbon Engineering making strides in this space.
  • Ethical AI concerns: Responsible AI development and deployment are vital. Investigate companies’ track records and commitment to ethical AI principles before investing.

With careful research and informed choices, these stocks can navigate the exciting, dynamic world of AI and offer potentially rewarding returns. Remember, diversification and a long-term perspective are key to successful investing in any sector, including the ever-evolving landscape of AI.

Invest wisely, embrace the future of AI, and reap the potential rewards!

  • Adam Grant

    Adam Grant is a highly qualified writer with a solid educational background in finance, holding a Bachelor's degree in Economics and a Master's degree in Business Administration (MBA). With his expertise in financial matters and a deep understanding of investment principles, Adam shares his insights to educate readers on the importance of financial literacy and smart investing strategies. Additionally, he has pursued courses in health and wellbeing, allowing him to offer a holistic perspective on achieving overall wellness in conjunction with financial stability.

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