Artificial Intelligence (AI) has taken the stock market to heights never before seen in its rich history. Moreover, with its disruptive long-term impact, AI will continue to be a major needle-mover for financial markets for years to come. Therefore, the pertinence of investing in the best AI stocks to buy is hard to deny.
Generative AI remains a top priority for businesses, fueling innovations in an array of sectors across the globe. Those not investing in AI could risk becoming redundant in the not-so-distant future, so it’s imperative to be proactive. Let’s examine three AI stocks to buy that represent the leaders in this new and evolving era.
Palantir Technologies (PLTR)
Big Data analytics performer Palantir Technologies (NYSE:PLTR) has gained immensely through its powerful AI platform. It’s a power-packed software tool suite that effectively integrates data, analysis, and operational intelligence.
Moreover, it allows its user base to harness multiple datasets critical for deep insights and decision-making across public and private sectors. Additionally, the sizable backlog for the company’s AI boot camps indicates its incredible appeal. Also, Wedbush analyst Dan Ives called the company the “Lionel Messi of AI.”
Palantir Technologies’ appeal over the years has been its robust government-level clientele. But recent quarterlies have also shown solid progress on the commercial side. Its commercial business has evolved immensely, showing a healthy 32% growth year-over-year (YOY) in Q4. At the quarter’s end, it had 237 clients, with an impressive average annualized revenue generated per client (ARPC) of $2.6 million.
The AI boom led to PLTR stock rising 41% year-to-date (YTD) and will continue its upward ascent as the company outperforms market expectations.
Microsoft (MSFT)
Tech giant Microsoft (NASDAQ:MSFT) leaves its competition in awe. With its game-changing collaboration with OpenAI, Microsoft positions itself as a dominant force in the sector. Its strategic partnership has positioned it as an AI bellwether, effectively integrating transformative technology across its timeless software stack. These initiatives have already borne fruit. Hence, the company posted comfortable top-and-bottom-line beats in recent quarters.
Perhaps the segment that’s benefitted the most from AI innovation is MSFT’s cloud service. Azure has quickly become the go-to cloud infrastructure provider for developing, training, and deploying AI applications. Moreover, it generated an amazing $33.7 billion out of the company’s $62 billion in total second-quarter sales. Additionally, revenues from the segment rose 24% YOY, while sales overall were up 33% YOY. Another major opportunity for the company is its AI-powered Copilot productivity tool. And, according to Piper Sandler estimates, it could generate more than $10 billion in annualized sales by 2026.
Oracle (ORCL)
Oracle (NYSE:ORCL) is a dominant player in the cloud infrastructure space, benefitting immensely from AI tailwinds. AI has significantly expanded its long-term growth runway, offering tremendous upside potential with ORCL stock.
Its cutting-edge Gen2 AI capabilities have effectively integrated its cloud services, focusing on greater efficiency, autonomous operations, and enhanced security. Moreover, its innovations support more powerful analytics, smarter data management, and greater scalability of cloud computing environments. According to CEO Safra Katz, Oracle will continue to receive huge contracts for their Gen2 AI infrastructure this year.
Virtually every cloud service provider is dashing to meet the evolving needs of AI network infrastructure, and Oracle is likely to benefit immensely from this issue. Recently, ORCL reported strong operating results, where cloud sales were up 25% YOY to $5.1 billion. The firm believes its cloud infrastructure business will continue experiencing rapid growth, and Oracle is wasting no time building new data centers to meet the growing demand.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines
