So far, to the best of my knowledge, only three prominent stocks have surged tremendously as a direct result of the AI Revolution: Microsoft (NASDAQ:MSFT), Super Micro (NASDAQ:SMCI) and Nvidia (NASDAQ:NVDA) — of course. Microsoft is incorporating AI into its software and sells AI tools to many firms through its cloud infrastructure unit, Azure. Super Micro markets hardware used to develop and provide AI, while Nvidia sells the chips used to create the technology. But many firms will need help implementing AI since they haven’t done so before. As a result, they need to hire other companies to assist them with this endeavor, enabling these firms to ultimately generate a great deal of revenue and profits from these projects. Indeed, according to one report, “the Global AI Consulting Services market is to witness a CAGR of 38.5%” between 2024 and 2030. I believe the stock market will begin rewarding these names soon, making them great AI stocks for the next bull run.
Accenture (ACN)
Accenture (NYSE:ACN) clearly sees a huge, long-term opportunity for itself in AI, as it intends to hire 40,000 more “data and AI experts” “in coming years.” That would bring its total staff in those areas to 80,000.
Moreover, ACN Chief Executive, Technology and CTO Paul Daugherty stated that many businesses are having trouble determining “how and where” to utilize AI. That assertion suggests the company, as well as its competitors, can indeed generate huge amounts of revenue and profits from helping businesses implement AI.
Also noteworthy is that on Jan. 24, investment bank Piper Sandler (NYSE:PIPR) identified Accenture as one name within the “small- and mid-cap” stock group gaining momentum. The bank stated that ACN had “surpassed multiple resistance levels,” and shares were likely to climb going forward.
Also importantly, McDonald’s (NYSE:MCD) on Dec. 19 stated it would expand its collaboration with ACN to focus on AI. The announcement bodes well for ACN’s ability to convince many of its large customers to similarly expand their partnerships with Accenture.
EPAM Systems (EPAM)
EPAM Systems (NYSE:EPAM) provides “digital transformation services.” In August 2023, the firm started a team to help businesses “streamline and enhance (their) AI-driven business solutions.”
Also noteworthy is, in December, EPAM unveiled an open-source platform that will enable developers to create new AI applications. I believe the initiative is a low-cost way for EPAM to create new, innovative and highly useful AI apps that can market and sell to its customer base. Consequently, I think this initiative will prove to be very profitable for EPAM over the longer term.
On Nov. 3, investment bank Piper Sandler raised its rating on EPAM stock to Overweight from Neutral. The bank stated it became more bullish on the company’s fundamentals and long-term outlook in the wake of its Q3 results. It raised its price target on the shares to $265 from $243.
IBM (IBM)
IBM (NYSE:IBM) provided higher-than-expected 2024 top-line growth guidance of about 5%, excluding currency fluctuations. That was above analysts’ average estimate.
What’s more, the tech giant expects to generate an impressive free cash flow of about $12 billion this year.
IBM reported that the deployment of AI systems by many of its customers was meaningfully boosting the overall demand for both its software and services.
Notably, CEO Arvind Krishna stated its AI-related pipeline had doubled in Q4 versus Q3.
Calling IBM’s 2024 free cash flow guidance of $12 billion “the standout metric,” Bank of America (NYSE:BAC) noted it had only expected the firm to provide free cash flow guidance of $11 billion to $11.5 billion.
IBM’s forward price-earnings ratio of 18.3 is quite attractive.
IBM’s strong prospects and attractive valuation make it one of the great AI stocks for the next bull run.
On the date of publication, Larry Ramer did not hold (either 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.
