What was the top financial story of 2023? It has to be Artificial Intelligence (AI), right?
No other subject dominated the headlines quite like AI. Whether it was ChatGPT, viral AI-generated images, or the failed ouster of Sam Altman at OpenAI, it seems AI keeps pumping out big stories, one after the other.
So, with 2024 right around the corner, here are three AI stocks worth owning in 2024 — and beyond.
Palantir Technologies (PLTR -1.98%): Palantir operates AI-based analytics systems for governmental and commercial uses and is on the leading edge of translating AI innovation into shareholder returns. Consider Palantir’s recent announcement that it is extending its long-standing partnership with UniCredit S.p.A., a major European bank. Palantir noted that its signature Foundry operating system delivered material results for UniCredit. For example, in 2023, advanced analytics and propensity models in Foundry helped [UniCredit] generate a four-fold increase in customer redemption of protection products through better targeting.
SoundHound AI (SOUN -1.81%): SoundHound AI develops conversational AI, taking an audio input, such as someone voicing a question and responding with dialogue or action. Conversational AI has a lot of existing and potential use cases. SoundHound AI is used in restaurant and hospitality industries to take orders or make reservations. It’s in vehicles, smart devices, and appliances for voice assistance. In the future, the technology could find its way into healthcare, customer service, and more. SoundHound AI estimates a long-term potential addressable market of $160 billion. The company also recently announced an acquisition of SYNQ3 Restaurant Solutions, giving SoundHound access to a potential restaurant pipeline of 100,000 locations.
Alphabet (GOOGL 2.41%): Alphabet has responded to the rise of OpenAI’s ChatGPT by developing its own generative AI tool called Bard. While the tools offer similar results, Bard was first in producing more up-to-date results as it leverages Google’s search engine. Alphabet has a long history with AI and owns numerous companies that could drive AI innovation. With almost $120 billion in liquidity and nearly $32 billion in free cash flow, Alphabet has the resources to develop AI-related products and purchase the innovation it cannot create.
Investors should consider the potential of these AI stocks for 2024 and beyond. Palantir Technologies has shown strong growth and partnerships, SoundHound AI has a nascent but promising business in the conversational AI niche, and Alphabet continues to leverage its AI knowledge base and resources to remain a force in the industry. While there are risks associated with investing in early-stage AI companies, the potential rewards may be significant as AI continues to shape the future.
Note: The opinions expressed in this article are solely those of the authors and do not reflect the opinions of The Motley Fool or its affiliates. This article is for informational purposes only and should not be considered as investment advice. Please consult with a qualified investment advisor before making any investment decisions.
