Palo Alto Networks (NASDAQ: PANW) and Duolingo (NASDAQ: DUOL) emerged as top AI stocks in 2023, delivering impressive gains of 114% and 219% respectively. As the stock market prepares for a potentially strong 2024, these companies are expected to continue their growth trajectory.
Palo Alto Networks, a world leader in cybersecurity, has been actively addressing the increasing threat of cyberattacks. With cloud computing and online data storage becoming more prevalent, businesses are vulnerable to malicious actors from anywhere in the world at any time. Palo Alto’s security operations solution, Cortex XSIAM, utilizes automation and AI to speed up incident response. The platform has gained significant traction, accumulating $1 billion in bookings as of the company’s fiscal 2024 first quarter. Its technology is being utilized by a customer to protect 300,000 computers and devices.
The company has also made significant strides in leveraging AI throughout its operations. With 35 AI-powered products across cloud security, network security, and security operations, Palo Alto has positioned itself as a frontrunner in the industry. Its data collection capabilities, which involve 48,000 customers and 4.8 petabytes of cybersecurity data daily, contribute to the accuracy of its AI models. Projected revenue for fiscal 2024 stands at $8.2 billion, representing an 18% year-over-year increase, while non-GAAP earnings per share are expected to grow by 23% to $5.47. Despite trading at a higher forward price-to-earnings (P/E) ratio of 51.7 compared to the Nasdaq 100 index, Palo Alto’s market leadership and the estimated $1.8 trillion spending gap in cybersecurity provide a solid foundation for future growth.
Duolingo, the largest language education platform globally, enjoyed remarkable success in 2023. With a mobile-first approach, the platform offers an interactive and engaging learning experience to its 83.1 million monthly active users. Amid economic headwinds such as elevated inflation and rising interest rates, Duolingo consistently surpassed its own financial forecasts. The introduction of its new subscription tier called Max, which incorporates powerful AI features like Roleplay and Explain My Answer, further enhanced the learning experience for users.
Duolingo’s success is fueled by its extensive use of AI. With users completing 10 billion lessons weekly, the company possesses a vast amount of data for training its AI models. Additionally, a partnership with OpenAI has facilitated the rapid creation of new lesson content. Duolingo’s integration of mathematics education and a new music education service into its flagship language app extends its addressable market. The company reported substantial revenue growth in the third quarter of 2023, with $137.6 million, a 43% year-over-year increase.
With over 2 billion people worldwide learning a foreign language, Duolingo has tremendous growth potential. By expanding its offerings and leveraging AI, the company aims to increase user engagement and unlock new monetization opportunities.
As the stock market gears up for a potentially strong 2024, Palo Alto Networks and Duolingo are positioned for continued growth. Each company’s unique value proposition in the AI space, coupled with their impressive track records, make them attractive investment opportunities for the year ahead.
Disclaimer: The above article is not financial advice. Investors should conduct their own research before making investment decisions.
