The long-term competitive advantage guarantees that these companies are not a flash of PAN's AI stock.
The excitement and potential impact on companies regarding artificial intelligence (AI) has led to the rise in stock prices of many of the biggest tech companies. nvidiafor example, since ChatGPT was released in late 2022, stock prices have risen more than 10 times, and now have a market capitalization of over $4 trillion.
Some investors may feel like they missed the boat and it's too late to buy AI stocks at a good price. It is important to consider that today's AI winners may not be the biggest companies that will benefit from advances in artificial intelligence in the long run. Finding companies that are making great progress right now with sustainable, long-term competitive advantages can be even better inventory to own when the dust settles down.
All three of these companies are well suited to benefit from the continued growth and advancement of artificial intelligence. All their stocks are attractive at today's prices. This means you can buy it now and hold it forever.
Image source: Getty Images.
1. Amazon
Amazon (amzn -0.23%)) Home to Amazon Web Services or AWS, the world's largest public cloud computing platform. The segment has generated $116.4 billion over the past 12 months, about 50% bigger than its next competitor. Microsoftazure.
Some have expressed concern about AWS for several reasons. First, it was captured flat as generative AI opportunities had descended from the ground. This has given way to Microsoft and others who previously invested in the space. However, the course will be revised quickly, and the bedrock platform will be released, showing triple digit growth in AI services. This allowed us to maintain a large portion of our market share in a rapidly growing market (although overall revenue growth slowed to a high 10 year old).
The second reason is that AWS saw a significant decrease in operating profit margin in the second quarter. Management explained that half of the decline was due to the timing of stock-based compensation. The rest is explained by a significant investment in Amazon's capacity. This is because businesses still point out capacity constraints. Over time, investors should see margins back up. It is worth noting that AWS still commands a higher margin than its smaller competitors.
Meanwhile, the rest of Amazon looks strong. The retailer has improved margins after the quarter. This is thanks to our strong advertising business. The international segment is on the path to becoming meaningful contributors to operating profit, particularly after years of investment.
Based on the unfortunate outlook, the stock fell after second quarter earnings were announced. However, Amazon's long-term potential, especially on AWS, remains strong. Price pullbacks look like an opportunity for long-term investors to buy this AI leader.
2. Salesforce
Salesforce (CRM) -0.29%)) It provides software that is often at the heart of many companies' operations. The company has achieved very good results in the growth of cloud-based software solutions, but the standout recently has been data cloud delivery. Data Cloud provides a single platform for aggregating data from all your enterprise to create actionable insights from a single source.
Data Cloud recurring revenues rose to $1 billion in Salesforce's most recent quarter, up 120% year-on-year. You can see strong attachments with 60 of the top 100 transactions, including contract data cloud. Additionally, AgentForce, the latest product built on top of the data cloud, is seeing extremely strong adoption.
AgentForce allows businesses to build AI agents that can perform tasks and minimize human intervention. The key to building a successful AI agent is accessing related data. This is exactly what the data cloud brings to the table. Management says it has traded 8,000 with AgentForce since its launch last fall, representing $100 million in revenue. This makes it the fastest growing product in Salesforce.
Given that Salesforce's software suite is entrenched in the operation of so many businesses, it can benefit from increased spending on artificial intelligence, particularly through the data cloud. You will rarely lose that position. In fact, a growing suite of software tools can help increase the cost of switching companies. With stock trading estimates of revenue just 22 times earlier, Salesforce looks like a great purchase at today's prices.
3. Meta Platform
Meta Platform (Meta) 0.92%)) He may be the world's biggest investor in artificial intelligence. Spending $66 billion to $72 billion on capital expenditures is going well, and it's building the computational power of the building just for itself (unlike other hyperscalers who serve cloud customers). There's a reason why Meta spends more on artificial intelligence than anyone else. This could be the biggest beneficiary of all generation AI.
The signs have already passed. In the second quarter, Meta ad prices rose 9% year-on-year, while impressions rose 11%. CEO Mark Zuckerberg points out that a significant portion of the improvement comes from the AI-Commendation model. Additionally, the time spent on Facebook and Instagram increased by 5% and 6% thanks to the Bigger AI model, respectively.
But the future is bright too. Meta Generation AI Tools for AD Creative are seeing strong adoption. Zuckerberg says, “It makes sense… [percentage] Our advertising revenue now… [comes] From a campaign using one of the generative AI features. “In the long run, Meta is working on AI agents, allowing AD Creative to autonomously develop and test.
Meta's AI chatbot boasts over 1 billion users and is creating additional channels for monetization over the long term. Meta recently started typing ads into WhatsApp and threads. This should provide additional ad revenue as Meta's ads become more and more easy thanks to the generative AI capabilities.
Meta sees excellent financial results from increasing adoption of advertising platforms and increased user engagement. Revenues rose 22% in the last quarter, while operating profit increased by an impressive 38%. Increased depreciation in meta could strain future revenues as long as spending continues to increase, but it is easy to consume if we continue to generate topline growth like last quarter.
If you use EBITDA to withdraw your depreciation expense, META will share stock in stock with attractive prices and stock trading at a corporate value of approximately 16 times the EBITDA estimate. Even the more traditional forward P/E ratings believe that meta stocks are worth the 27x multiples that they have to pay for the stock today.
Adam Levy has jobs at Amazon, Meta Platforms, Microsoft and Salesforce. Motley Fool has jobs at Amazon, Meta Platforms, Microsoft, Nvidia and Salesforce and recommends. Motley Fool recommends the following options: A $395 phone at Microsoft for January 2026 length and a $405 phone to Microsoft for January 2026 short term. Motley Fools have a disclosure policy.
