AI stocks are rapidly gaining traction in the market, with companies like Salesforce, ServiceNow, Microsoft, Snowflake, and Meta Platforms positioned for growth. Global AI spending is projected to reach $630 billion by 2028. Investors are keen on these stocks due to their expanding applications in diverse industries despite challenges around accuracy and operating costs.
Artificial intelligence is quickly becoming the talk of the town in the tech world, and if you’re an investor, you might want to pay attention to the best AI stocks out there. Amazon CEO Andy Jassy claims that AI is the biggest game-changer we’ve seen since the internet. The growth potential? It’s staggering, with global spending soaring from $235 billion in 2024 to an eye-popping $630 billion by 2028. Generative AI alone is set to make up 32% of that. Talk about a gold rush!
Surprisingly, AI is gaining traction across various sectors. According to a McKinsey report, a whopping 65% of organizations are now using generative AI in at least one function, doubling in less than a year. From easing customer service burdens to automating coding tasks, AI is embedding itself into the fabric of business operations.
But hold your horses. AI’s quick rise doesn’t come without its fair share of hurdles. The technology isn’t flawless; issues with accuracy and reliability are front and center. Plus, the cost of powering and training these AI models is no small feat, requiring substantial energy and relying on specialized chips from a limited pool of suppliers. That’s good news for semiconductor stocks like Nvidia, but it also means potential bottlenecks with hardware shortages or climbing costs.
Still, for investors with a long-term perspective, AI presents an enticing opportunity. Let’s take a closer look at five companies poised to ride this AI wave.
First up is Salesforce (CRM). Valued at $276.4 billion and paying out a modest 0.6% dividend, Salesforce’s Agentforce is an AI-driven platform for building autonomous systems to handle tasks like qualifying leads. Since its launch, it has gained traction with around 3,000 paying customers across industries such as healthcare, finance, and tech. Keith Kirkpatrick, a research director, noted that Agentforce shows a significant ROI by cutting implementation costs by at least 20% compared to traditional setups.
Next, we have ServiceNow (NOW), with a market cap of $212.3 billion and no dividends. While its core tech may not zest up the headlines, it offers crucial systems for optimizing workflows across diverse business functions. Its Now Assist platform aids IT teams in catching issues before they spiral out of control. With analytics showing rapid growth, CEO Bill McDermott described a renewed push for efficiency across the board.
Then there’s Microsoft (MSFT), boasting a stellar valuation of $3.41 trillion and a 0.7% dividend yield. The 2019 investment of $1 billion in OpenAI looks wise now, as Microsoft’s commitment has positioned it at the forefront of the generative AI trend. With over 70,000 companies using its Foundry, Microsoft has embedded AI across its myriad products. GitHub Copilot alone claims to have 15 million users, signifying a booming interest in AI-enhanced tech tools.
Snowflake (SNOW), with a market value of $60.8 billion, built its database platform aptly suited for cloud-based AI workloads. Snowflake’s architecture supports the scale necessary for today’s AI applications. Over 4,000 companies are currently utilizing its AI and machine-learning tools. In fact, the fourth quarter showed impressive product revenues hitting $943.3 million, highlighting its rapid expansion.
Finally, there’s Meta Platforms (META), which is valued at about $1.6 trillion and has a dividend yield of 0.3%. CEO Mark Zuckerberg is navigating the AI landscape with a bold new strategy centered on advertising, user engagement, and business messaging. The aim? To transform Meta into an AI-centric powerhouse leveraging its massive user base. This could put them in a prime position as AI technologies continue to evolve and embed more deeply into daily interactions.
With AI growing faster than anyone could anticipate, these companies are not just surviving — they’re positioning themselves to thrive in this new landscape. As the world increasingly embraces AI solutions, it’s clear that the potential for growth remains enormous, making these stocks compelling options as we look ahead.
The overwhelming growth potential of AI is reshaping the investment landscape, painting a bright picture for savvy investors. Companies like Salesforce, ServiceNow, Microsoft, Snowflake, and Meta Platforms stand at the forefront, actively adapting and evolving alongside technological advancements. With rising adoption rates across various industries, the room for further growth and opportunity is significant. As these AI solutions continue to integrate into daily business operations, those with a long-term strategy could find rewarding pathways in the AI stock market.
Original Source: www.kiplinger.com
