Machine learning stocks are doing well in 2024, led by the astronomical 145% growth of Nvidia (NASDAQ:NVDA), but there are other opportunities to explore apart from Nvidia in the machine-learning market, with a potential size of $79.3 billion in 2024 and 36% growth between 2024 and 2030, reaching $503.4 billion by 2030.
North America is the biggest market for machine learning, thanks in part to the country’s favorable policy trends. The 2023 National AI Research and Development Strategic Plan stresses working together across sectors, and, in the meantime, President Biden is still issuing executive orders about AI and machine learning to maintain America’s lead.
However, because the market for machine learning stocks is still fairly new, buyers usually rush to Nvidia or Advanced Micro Devices (NASDAQ:AMD), making machine learning stocks trading at a discount more valuable.
Moreover, inflation numbers consistently above a 2% target show that the economy is still not out of the woods, so the Fed will only cut interest rates once this year.
When the economy is uncertain, as JPMorgan Chase (NYSE:JPM) and Mogan Stanley (NYSE:MS) insist, it’s best to invest in companies that are getting good reviews from analysts and are selling for less than what they’re worth historically.
ServiceNow (NOW)
ServiceNow (NYSE:NOW) holds a “Strong Buy” consensus rating, with an average price target of approximately $865, indicating a potential upside of roughly 15% from its current price of $749.
NOW’s new AI tools and strong growth in membership sales show that it strategically focuses on adding machine learning to its services, making NOW one of the best stocks in the space.
ServiceNow used Knowledge 2024 as a launch pad for several new machine-learning products that will integrate corporate processes and enhance user experiences.
Even if you put its machine learning ambitions to one side, you’re dealing with a very strong stock in the shape of NOW; this quality pick among machine learning stocks is on a winning streak, surpassing analyst expectations in 11 out of the last 12 quarters.
ServiceNow’s latest first-quarter 2024 results once again affirm its strong standing in the industry. With an EPS figure of $3.41, besting estimates of $3.14 and $2.60 billion in sales outpacing analyst projections with $2.59 billion, analysts expect the ServiceNow growth story to continue, projecting EPS to increase 118% in fiscal 2024 and 28% in 2025.
Adobe (ADBE)
Adobe (NASDAQ:ADBE) shares have dropped 10% in six months because of a bad forecast for fiscal Q2. This is the biggest drop in one day since September 2022.
With 26 experts giving Adobe a “Moderate Buy” rating and predicting a 16% rise from $533 to $617, the company’s stock price drop presents a unique chance for machine learning companies that aren’t following the crowd.
As part of its work on machine learning, Adobe is increasingly using creative AI. The AI-powered Adobe Lightroom Generative Elimination feature removes unnecessary elements from photos.
Creative AI in Adobe Premiere Pro also lets users stretch shots, add or remove items, and make films inspired by text. AI models OpenAI and Runway are being added to Adobe to make updating more powerful and open.
Acrobat and Reader also let you connect with the AI Assistant through PDFs. The AI Assistant takes complicated words and turns them into facts and insights.
Even though the outlook isn’t good, Adobe still expects fiscal year 2024 sales to rise 10.4% to $21.42 billion and EPS to rise 11.8% to $17.96 per share.
Adobe doesn’t give out dividends, but the company’s board just passed a plan to buy back $25 billion worth of stock.
Alphabet (GOOG,GOOGL)
Ace investor Louis Navellier says Alphabet (NASDAQ:GOOG,NASDAQ:GOOGL) is the most underestimated of the “Magnificent Seven” companies, and it’s hard to disagree. Despite a 29% rise this year, the stock has over 10% upside and a “strong buy” consensus rating, making it the safest machine learning investment.
Google Research advances NLP, computer vision and reinforcement learning. BERT has raised search query word context understanding standards, improving search accuracy and user experience. TensorFlow and AutoML on the company’s cloud help businesses develop bespoke models.
Machine learning aids Alphabet’s Jigsaw team in internet toxicity prevention. Perspective, trained on hundreds of poisonous comments, discovers and censors dangerous material, strengthening user confidence and saving Alphabet money on legal fees.
Despite its machine learning worries, Alphabet’s outstanding financial performance, including a 15% increase in sales revenue to $80.5 billion, will likely please investors. Investors also favor this IT powerhouse among machine learning stocks due to its first dividend and $70 billion share buyback program.
On the date of publication, Faizan Farooque did not have (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.
