7 Machine Learning Stocks to Buy in 2024

Machine learning techniques, a branch of artificial intelligence (AI) that uses data and experience to enable computers to mimic the way humans learn and adapt, are not new. Early research into machine learning began in the late 1950s, when the term “machine learning” was coined. IBM (IBM 0.17%) Scientist Arthur Samuel.

In the early 1960s, a computer equipped with machine learning beat researchers at a game of checkers. Today, machine learning systems tackle much more complex problems. Everyday, we benefit from machine learning when searching the internet. alphabetof(Google 2.57%)(Google 2.44%) Search Google or find recommended TV shows and movies Netflix (NFLX 1.19%).

Companies of all kinds are looking to apply machine learning to their operations, and according to research firm IDC, global spending is expected to nearly double between 2023 and 2026, reaching more than $300 billion annually. Given these projections, investing in companies working on machine learning could pay off big time.

Our List

Best Machine Learning Stocks for 2024

While these are not purely machine learning focused, here are some of the top companies participating in the machine learning space:

1. NVIDIA

Nvidia's hardware made its name powering high-end video game graphics, but in recent years the company's investments in AI and machine learning have begun to pay off. Machines need vast amounts of information to learn, and Nvidia's graphics processing units (GPUs) are ideally suited for the task.

The semiconductor industry is undergoing a generational shift, and Nvidia is quickly emerging as the technology leader in the field, powering high-end computing with GPUs that accelerate data center production and the training of AI models.

The semiconductor company also continues to research next-generation circuits. It provides machine learning and other AI customers with an extensive software library to help them deploy the technology. Customers include automakers developing self-driving cars, biotech researchers searching for cures for diseases, and retailers looking to improve their supply chains. The company consistently generates double-digit operating margins while spending billions of dollars annually on research and development.

2. Tesla

Tesla is using machine learning to develop its self-driving cars. Self-driving cars are controversial but one of the most exciting developments in the field of machine learning. Mimicking the many split-second decisions a human driver makes is immensely complex, but Tesla is steadily improving its Autopilot and fully self-driving (not fully self-driving, at least not yet) cars. The electric car maker regularly releases updates to its machine learning-enabled cars through cloud-based software.

Tesla collects video and data from Tesla owners to continually improve its machine learning algorithms. Tesla also has a supercomputer, nicknamed Dojo, that trains the software needed to make its cars truly self-driving. Additionally, the company is applying its software expertise to the global power grid to virtually manage and automate the storage of electricity used by its network of charging stations, as well as selling it to local utilities and other businesses that need it.

In addition to strong sales growth, Tesla is also generating strong profit margins that are much higher than its traditional automaker peers. The company's stock has risen sharply as investors hope the EV company can leverage its AI and machine learning advantages to disrupt the energy and transportation status quo for years to come.

3. Accenture

Accenture is a global consulting firm and technology specialist that helps companies transform their operations through technology. Accenture's deep expertise includes artificial intelligence and machine learning.

This stock's slow and steady growth makes it the least exciting company on this list, but what Accenture stock lacks in excitement it makes up for in shareholder rewards through dividends and share buybacks.

Accenture has labs dedicated to different areas of AI, and some of its projects involve determining how machine learning can be applied to solve real-world problems. The company encourages its clients to use machine learning not only to increase the efficiency of cloud computing, but also, where appropriate, to support and improve the productivity of the human workforce. Machine learning is expected to rapidly spread to enterprises over the next decade, and Accenture is well positioned to help companies adopt it.

4. Service Now

ServiceNow is a cloud computing platform powered in part by machine learning. As a provider of workflow automation software, the company uses machine learning to help its customers eliminate tedious and redundant tasks, so employees can spend more time working instead of discussing how to get their work done.

ServiceNow's use of machine learning also means that its capabilities are constantly improving. The longer they use machine learning to run their platform, the more accurate it becomes at predicting how to improve workflows and flag and prioritize tasks. ServiceNow may not be a household name, but they're deep in machine learning, and it's transforming work, software development, and customer relationship management.

Though ServiceNow is a large software company today, with revenue still growing at a 20%+ growth rate, this applied machine learning company still has a long way to go.

5. Snowflake

AI and machine learning require the storage and processing of vast amounts of digital data, and as organizations around the world seek ways to make the most of new cloud computing capabilities, Snowflake's cloud-based platform was built to address this exact need.

Snowflake calls its platform a “data cloud.” Businesses can use the software for nearly limitless uses, including analytics and training machine learning algorithms. The company has been growing rapidly since its IPO in 2021. The stock has since plummeted due to an overvaluation at the time of its listing and the subsequent bear market. But Snowflake now presents an attractive investment potential.

The company's business is now profitable as measured by free cash flow, and it's expected to continue expanding at a rapid pace throughout the 2020s. But like any highly valued, high-growth stock, Snowflake is likely to experience some rough times, but it also has great potential as AI and machine learning become more important.

6. CrowdStrike Holdings

The cybersecurity company uses machine learning to detect and identify threats, recommend next steps if a breach occurs, and help information technology (IT) teams resolve issues. CrowdStrike's machine learning technology collects data from thousands of customers and continuously adapts to get smarter.

CrowdStrike, a cloud-native company that started out as a vendor of endpoint security software for devices used outside of traditional office environments, has become a top security vendor, effectively leveraging machine learning to deliver strong online protection that continues to improve over time.

In addition to its phenomenal growth rate, CrowdStrike is also highly profitable: the company generates free cash flow margins of over 30%, an enviable rate, especially for an emerging technology company.

7. Palantir Technologies

Palantir is a software company that builds foundational software solutions for large enterprises. The global economy is witnessing unprecedented change driven by rapid improvements in computing power, cloud, and AI. To keep up with this change, businesses need better ways to gain insights from vast and growing troves of digital data.

That's where Palantir's AI and machine learning software comes in. The company has designed an operating system with machine learning at the core of its functionality to help customers make better decisions and predictions. The company has signed large contracts with various government agencies and a rapidly growing number of private sector customers.

Palantir has a lot of fans among retail investors and has been a top meme stock. But it's a solid business: Palantir is profitable (measured by free cash flow) and has an impressive balance sheet with over $2.9 billion in cash and short-term investments and no long-term debt.

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Should you invest?

Should you invest in machine learning stocks?

Companies around the world are dedicating resources to developing AI and machine learning software for a variety of purposes, which means the machine learning field is poised for significant growth. As the technology continues to evolve, it will increasingly impact the way many businesses operate and interact with their customers.

However, because the field is still developing, machine learning stocks are generally best suited for buy-and-hold investors who can tolerate more volatility in price. Investors who stick with machine learning stocks for years could realize significant gains as the machine learning industry advances and matures.