In the dynamic landscape of AI stocks, it’s crucial to carefully approach this exciting realm with thoughtfulness. A prudent strategy is a basket approach that diversifies across multiple companies. By investing in a theme and spreading your investments, you can mitigate risks and increase the chances of capitalization.
AI offers various investment options and avenues. Choices abound from hardware companies enabling AI program creation, firms collecting valuable data for AI input, providers of indispensable programming toolkits, and even companies incorporating AI into their offerings. Crafting a captivating AI stock portfolio with $1,000 calls for an astute selection across these areas.
Imagine a basket that combines three outstanding companies, each representing a crucial aspect of AI investment. These picks harmoniously cover the hardware pioneers, the data trailblazers, the toolkit specialists, and the AI-driven innovators. By blending these elements, you’ll embark on a unique investment journey with the potential to ride the wave of AI’s exponential growth.
Remember, differentiating yourself in this ever-evolving market is key. So, why not take the less traveled road and embrace the immense potential that AI stocks offer?
Alphabet (GOOGL)
Despite facing criticism for entering the chatbot game late, Alphabet (NASDAQ:GOOGL) remains a prominent leader in the AI industry. Alphabet stands out with an expansive toolkit catering to AI developers, including machine learning for apps, AI-nourishing datasets, and Google Cloud infrastructure for rent.
CEO Sundar Pichai’s vision to make Alphabet an AI-first company led to recruiting thousands of skilled professionals. With an unrivaled dedication of resources to AI, Alphabet shines among the best AI stocks. Additionally, the stock trades at an attractively low valuation, making it an opportune time to invest.
For those seeking AI stock investment options, Alphabet deserves attention. It plays a unique role, both exposed and unexposed, in the AI space. The company’s extensive AI toolkit, a vast library of datasets, and the presence of Google Cloud position Alphabet as a significant player. Since Pichai’s announcement in 2016, Alphabet has made significant investments to solidify its position as an AI powerhouse.
While 78% of Alphabet’s revenue comes from advertising sales, AI is poised to reshape its business landscape. A successful foray into AI products could shift the balance, reducing reliance on advertising and increasing the influence of AI.
When it comes to investing in AI stocks, consideration of Alphabet’s trajectory is a wise move. Stock-buying in this dynamic company aligns perfectly with the ever-expanding world of AI and presents a promising opportunity. By capitalizing on Alphabet’s potential to revolutionize the industry, investors can benefit from its historically affordable stock valuation.
So, if you’re looking to invest in AI stocks, keeping an eye on Alphabet is highly recommended.
CrowdStrike Holdings (CRWD)
CrowdStrike (NASDAQ:CRWD) is an AI-powered, cloud-based platform offering robust cybersecurity and data protection. Leveraging artificial intelligence and machine learning, it continuously enhances its defense capabilities by ingesting vast amounts of data, which ensures increased superior protection.
The company’s exceptional performance is evident in its financials. CrowdStrike’s revenue has surged from $874.4 million in fiscal 2021 to $2.2 billion in fiscal 2023. Despite reporting operating and net losses, its free cash flow has steadily improved from $292.9 million to $676.9 million during the same period.
Continuing its upward trajectory, CrowdStrike reported remarkable growth in the first quarter of fiscal 2024. Revenue soared by 42% year over year to $692.6 million, with annual recurring revenue and free cash flow reaching $2.7 billion and $227.4 million, respectively. Notably, the company’s subscription customer base has multiplied from 2,516 in fiscal 2019 to an impressive 23,019 by the end of fiscal 2023.
Furthermore, CRWD estimates its total addressable market to be $76.1 billion, projected to grow at an annual rate of 13%. By 2025, CrowdStrike anticipates an addressable market of $97.8 billion.
Looking to invest in AI stocks? CrowdStrike, a leading player in the AI industry, stands out as an enticing option. With its cutting-edge technology, exponential growth, and widespread adoption, investing in CrowdStrike presents an opportunity for significant returns in the AI investment landscape.
Taiwan Semiconductor Manufacturing (TSM)
TSMC (NYSE:TSM), also known as Taiwan Semiconductor Manufacturing, currently holds the prestigious position as the largest chip foundry in the world. Moreover, this renowned company plays a vital role in the tech industry. Not only does it provide unrivaled expertise but also state-of-the-art capabilities to transform circuit designs into reality for various tech companies.
TSMC’s enviable position stems from its solid relationships with major tech giants. Consequently, it can invest boldly in research and development, creating a virtuous cycle that fuels innovation. Customers utilize TSMC’s leading-edge technology to create new chips that only TSMC can produce.
However, despite concerns about raw material supply shortages and political risks, TSMC remains steadfast in its long-term vision. The company anticipates substantial growth in the industry, driven by the widespread adoption of 5G connections, advancements in artificial intelligence, the rapid expansion of the Internet of Things (IoT), and the increasing demand for high-performance computing.
With an annual revenue growth projection of 15% to 20% in the long run, TSMC’s stock trades at an attractive single-digit sales multiple. If management’s predictions hold, investors can expect the multiple to rise double-digit.
When looking to invest in AI stocks, TSMC stands out. As the industry leader with robust growth prospects, TSMC offers a unique opportunity to invest in the booming semiconductor market. Therefore, consider TSMC for your investment portfolio and embrace the potential of AI, 5G, and transformative technologies.
On the publication date, Faizan Farooque did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
