Although artificial intelligence (AI) investing became popular in 2023, 2024 should be another strong year for these investments. Last year was one of discovery and hype, while 2024 will be a year of implementation. This will separate the wheat from the chaff, and companies with strong and relevant AI solutions will rise to the top.
This makes me want to own stocks like Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL), Adobe (NASDAQ: ADBE), and CrowdStrike (NASDAQ: CRWD), as they each have strong AI offerings in their respective industries.
Alphabet
Alphabet is one of the more popular AI stock picks for a good reason: It has been dedicated to AI for many years. Alphabet's latest version of its generative AI model, Gemini, smokes the competition (like OpenAI's GPT-4) in many benchmarks, making it a solid choice to build models on. Alphabet hasn't recognized revenue from this technology yet, but it will be coming in 2024.
Additionally, Alphabet's cloud computing service, Google Cloud, remains a popular pick for AI workloads. With more than half of generative AI start-ups using Google Cloud, it has a solid hold on tomorrow's rising businesses. This could help Alphabet make up some ground in the cloud computing race, as it is behind Microsoft and Amazon in market share.
Alphabet is a solid AI pick, but its stock is also a bargain right now. Investors can pick up shares for just 18 times 2024 earnings -- far cheaper than many of its big tech peers. 2024 will be an exciting year for Alphabet, and I'm excited to see what the stock can do.
Adobe
Adobe is a well-established industry leader in digital media. It also has other tools for marketing and commerce as well. However, it's not asleep at the wheel -- it's launching several AI products to keep it from being dethroned.
In the digital media space, it has Adobe Firefly, which combines generative AI with media creation. With a text input, Firefly can create or modify images. This can accelerate the creation of designs and make them modular, allowing them to easily adapt an image to a customer or season.
On the commerce side, Adobe Sensei helps process data to make better decisions. It also can assist in pinpointing how customers want to be advertised to, a huge step in creating a truly customized experience.
Adobe is seamlessly integrating AI into its products, making it a strong AI pick in 2024.
CrowdStrike
CrowdStrike operates in the cybersecurity space, and uses a branch of AI known as machine learning to provide best-in-class protection. By analyzing trillions of data points weekly, it knows what is normal activity and what isn't. This allows it to pinpoint a threat and shut down access to a company's servers within minutes of a breach.
Its endpoint protection brings customers to CrowdStrike, but it also has more than 20 other offerings to bolster a client's protection. With 63% of customers using at least five or more products, CrowdStrike has done an excellent job upselling its customers.
Although its platform has rapidly grown (CrowdStrike's annual recurring revenue rose 35% to $3.15 billion in Q3 FY 2024, ending October 31), there's still a massive runway for it. Through all of its combined offerings, CrowdStrike estimates its current market opportunity is $100 billion. However, it expects the market to expand to $225 billion by 2028 through new product launches and market expansion.
CRWD Revenue (TTM) data by YCharts
CrowdStrike and its AI-utilizing cybersecurity platform are just getting started, making it an excellent AI investment choice for 2024.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Keithen Drury has positions in Adobe, Alphabet, Amazon, and CrowdStrike. The Motley Fool has positions in and recommends Adobe, Alphabet, Amazon, CrowdStrike, and Microsoft. The Motley Fool recommends the following options: long January 2024 $420 calls on Adobe and short January 2024 $430 calls on Adobe. The Motley Fool has a disclosure policy.
