Artificial intelligence (AI) stocks have been gaining attention recently, due to the emergence of powerful new technologies. ChatGPT has served as a prime example of what AI technology can do, so investors are now devising strategies on how they can tap into these companies that utilize AI. Three stocks that stand out from the crowd are Microsoft, SentinelOne, and Palantir.
Microsoft has been in the tech business for years, but to ensure lasting success for many more years to come, the company has recently made huge moves towards embracing AI. Microsoft is determined to capitalize on ChatGPT’s integration with their Bing search tool, which can potentially affect Alphabet’s domination of the online search market. Last year, Alphabet reported over $162 billion in revenue from its search segment, a far cry from Microsoft’s $11.6 billion. Leveraging the power of ChatGPT is the key to Microsoft potentially gaining in the search engine wars.
SentinelOne is a much smaller less-known cybersecurity company. It’s different from the typical anti-virus software because it utilizes behavioral AI to detect threats. Moreover, its Singularity platform offers incredibly fast responses to security threats in comparison to its competitors. Last year SentinelOne reported 106% revenue growth for its fiscal 2023, and has earned itself a top rank in endpoint protection by the research firm Gartner. Unfortunately, the stock price has dropped from its peak of 106 to around 10 today.
Palantir has become well known for its exceptional big data solutions, having created software packages Gotham and Foundry which are popular in the defense and commercial realms respectively. What truly makes Palantir stand out is its deep integration with AI/ML technology which allows it to utilize and continually improve data-sets. Its Micro Model ecosystem is also catching attention, as it allows clients to break down large problems into smaller manageable pieces and standardize outputs. Although the company has not hit its own growth target of 30%, it still managed to report 24% revenue growth in fiscal 2022, to a total of $1.9 billion. Its price-to-sales ratio may be currently at all time low, opening the door for potential investors to jump in.
Overall, AI technology is gaining ground — with three key stocks particularly standing out. Investors may be able to benefit from Microsoft’s strategy in the search engine realm, as well as the untapped potential of SentinelOne and Palantir’s AI-driven solutions. All in all, it seems that the AI market still has a great deal of room for upside.
