As we enter into the new year, we need to start looking into how we can make changes to our portfolio. One thing is unlikely to change from last year though. AI will likely continue to be at the forefront of the market. 2023 was the year of ChatGPT with AI exploding into the mainstream world. This is only the beginning.
AI is expected to catapult in the coming year as the technology exponentially increases and improves. This can include an improvement in large language models like ChatGPT or image generators like DALL-E. In either case, there will be many new technologies that will enter the market and be major disruptors like we have seen in the last year.
With many new companies entering the space, the market and industry will continue to grow. With this great potential, we want to find the companies with the highest chance of being profitable. As such, in this article, we aim to present you with three AI stocks that will be primed for massive expansion in the coming year.
Crowdstrike Holdings Inc. (CRWD)
Crowdstrike Holdings Inc. (NASDAQ:CRWD) extracts anonymized data and uses it to locate and identify malicious threats and patterns of attack to protect customers. Crowdstrike has significantly surpassed its expected earnings for every quarter of this year. Yahoo! Finance analysts estimate that this stock will trade within a one-year price range of $172.00 to $330.00, with an average of $258.42.
Crowdstrike has released the Raptor upgrade and Charlotte AI. The Raptor upgrade allows customers to integrate external data sources and break down data silos which provide the customer with more customization options. Charlotte AI helps analysts switch from alert-based workflows to incident-based workflows. Which exponentially increases the productivity of analysts. Charlotte AI uses factual data only to prevent AI “hallucinations.” These technological advancements show high potential for growth in the future.
Crowdstrike has increased its revenue by 1268% over the last five years and its net income by 93% over one year and surpassed $3 billion in ARR in the third quarter of this year leading it to become the first and fastest to do this in AWS Marketplace sales. As such, I recommend the stock due to its massive revenue growth rate and advancements in technology.
Alphabet (GOOG)
Alphabet (NASDAQ:GOOG), founded in 1998, is poised to emerge as one of the potential leaders in the current AI revolution with an overwhelming presence in the internet as a whole. Analysts at Yahoo! Finance are estimating a one-year price target of $130-$160, with an average of $146.
Alphabet has recently taken the spotlight due to the reveal of its new AI model, named Gemini. Google has developed it as a direct response to the popular ChatGPT and other OpenAI models, which are all supported by their rival company, Microsoft. Some early reports claim that it is superior to anything OpenAI has developed so far, but more details will be apparent after its release soon. All of this compliments Google’s Cloud business which has been reported to earn $8.4 billion in sales
The company also has a modest revenue growth of 5.32%, which isn’t anything extraordinary, but still excellent considering the company’s scale. The most impressive metric for Alphabet this year, however, is an astonishing 41.55% increase in net income growth, which shows that the company is extremely profitable and will likely carry out long into the future.
UiPath (PATH)
Founded in 2005, UiPath (NYSE:PATH) is currently the biggest innovator in robotic process automation (RPA) and has helped to remodel corporate processes nationwide efficiently. The company has an optimistic future with analysts at Yahoo! Finance estimating a one-year price target of $17-$30, with an average of $34.
UiPath’s impressive market share of 36% in the RPA segment gives it a massive boost over its major competitors, with this dominance being a result of the wide variety of unmatched services that it offers. This market leadership puts UIPath in a good position to thrive in the rapidly developing AI sector. Recently, UiPath’s revolutionary Clipboard AI was named one of TIME Magazine’s Best Inventions of 2023 from thousands of global nominations due to its innovations in enhancing productivity by removing the need for manual copy-pasting.
While earnings may not be ideal, the company has still consistently maintained positive and increasing free and operating cash flow. Additionally, a solid revenue growth of around 24% so far this year further supports the success and future growth of the company. In conclusion, UiPath is an excellent option for investors looking to get into AI automation.
On the date of publication, Ian Hartana and Vayun Chugh 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.
