Microsoft, Alphabet, and HubSpot: Promising AI Stocks for 2024
2023 was an impressive year for Wall Street, with the S&P 500 index recording a substantial 24% gain. This bullish trend seems set to continue in 2024, largely driven by the strong performance of artificial intelligence (AI) stocks. As AI continues to play an increasingly significant role in our daily lives, it remains a compelling investment theme for the year ahead. Among the top AI stocks that investors should consider buying are Microsoft, Alphabet, and HubSpot. Here’s a closer look at why these three stocks are excellent choices in the unstoppable world of AI.
Microsoft has long been known for its Windows operating system and Office productivity suite, but it’s currently gaining attention for its advancements in the generative AI space. The company’s $13 billion investment in OpenAI, the creators of ChatGPT, has been instrumental in its strategy to infuse advanced AI capabilities into its core offerings. Microsoft’s cloud platform Azure, which benefits from organizations migrating their workloads to the cloud, has seen tremendous growth. Moreover, Azure’s AI services excel in training and inferencing large language models, making it a preferred choice for enterprise AI workloads. In fiscal 2023, almost one-third of Azure’s 53,000 AI customers were new to the platform, showcasing its customer momentum. Furthermore, the recently launched AI assistant Copilot has been in high demand, with early users noting improved speed in tasks. With solid financials and thriving AI initiatives, Microsoft is poised for success in 2024.
As a digital advertising and AI powerhouse, Alphabet operates a range of services including Google Search, YouTube, Android, and Chrome. While the company faced a growth slowdown in 2022 due to inflation, an improving macroeconomic environment is favorable for its core advertising business. Google’s advertising revenue, which accounted for approximately 76% of Alphabet’s total revenue, increased by almost 11% YoY in Q4 2023. To further strengthen its position in the global digital advertising market, Alphabet has incorporated generative AI capabilities into Google Search through SGE (Search Generative Experience). This allows for more comprehensive and insightful responses to user queries. With initiatives like Gemini, an AI model providing multimodal responses, Alphabet aims to increase user engagement. The company also assists businesses in improving advertising campaigns through AI-powered tools like Performance Max, resulting in higher conversions. Considering Alphabet’s dominance in digital advertising and its focus on AI-driven initiatives, it presents an attractive opportunity for investors in 2024.
HubSpot, a cloud-native CRM player, is known for its inbound marketing, sales, and content management capabilities primarily targeted at small and medium businesses. The company boasts a large and diversified customer base across various industries and geographies, with approximately 98% of its revenue derived from recurring subscriptions. HubSpot’s resilience in uncertain economic times is evident from its impressive financial results. Its strategic move to integrate AI into its CRM offerings has positioned the company for significant growth. HubSpot AI, a suite of AI-enabled tools, automates routine tasks, provides predictive insights, and improves cost efficiency for CRM functions. The tools have already gained traction, with 40% of enterprise customers utilizing them by Q3 2023. In Q3, HubSpot achieved a 26% YoY revenue growth and a remarkable 138% YoY increase in non-GAAP net income. With a strong AI-powered business model and robust financials, HubSpot is a promising stock choice for investors in 2024.
In a nutshell, Microsoft, Alphabet, and HubSpot are highly promising AI stocks for 2024. Microsoft’s advancements in generative AI and strong Azure performance make it a compelling choice. Alphabet’s dominance in digital advertising, coupled with its AI-driven initiatives, positions it for further growth. HubSpot’s integration of AI into its CRM offerings and impressive financial results make it an attractive investment option. As AI continues to revolutionize various industries, these three stocks provide investors with exciting opportunities to capitalize on this unstoppable trend.
