Artificial intelligence (AI) is being touted as the most potentially transformative technological movement of the 21st century. While some big strides have made headlines recently, the good news for investors is that the AI revolution is just getting started, with the potential for incredible returns for those taking a buy-and-hold approach in the right companies. It means that there is sexuality.
If you’re looking for long-term investments that can help you profit from the AI revolution, let’s take a look at two AI-related companies you can buy with confidence and keep forever.
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1. Amazon
While artificial intelligence does projects from OpenAI, microsoftand other big companies have been getting a lot of attention lately, but many investors seem to overlook Amazonof (AMZN -2.09%) Strengths and opportunities in space. The e-commerce and cloud computing giants have access to vast amounts of data that can be used to feed AI algorithms, and can greatly benefit from the implementation and continuous evolution of AI technology.
Even better, investors can take advantage of the market’s overly pessimistic stance on the tech giant’s outlook. Down about 46% from its highs and boasting his one of the world’s strongest overall businesses, Amazon stands out as a great buyer for investors looking to profit from advances in AI.
In addition to improving the customer experience for its online retail platform and providing new tools for AWS users, advances in AI will ultimately play an important role in the robotics revolution that will fundamentally change the profitability of Amazon’s e-commerce business. I think it will play its role. The combination of factory automation and advances in self-driving cars could well boost the margins of the company’s massive e-commerce business. The company recently announced a successful pilot for its Zoox self-driving taxi division. This AI-powered self-driving technology has the potential to become a stand-alone sales driver and complement the online retail segment.
As far as ‘AI stock’ goes, Amazon still doesn’t get enough attention. With the company’s key business segments set to benefit from AI initiatives and already enjoying a strong competitive moat, the stock now looks like a good buy-and-hold investment.
2. Crowdstrike
If I had to pick a few industries likely to see strong growth over the next decade, no matter what twists and turns the economic and geopolitical backdrop would take, cybersecurity would be at the top of the list. will be close to cloud strikeof (CRWD 3.96%) Software for endpoint protection helps keep mobile devices, computers, servers, and other hardware from being used in cybercriminal attacks. CrowdStrike is ahead of the curve by putting AI at the heart of its cybersecurity services, putting the company on track to profit from strong demand tailwinds.
Advances in AI technology are sparking an arms race in the cybersecurity arena. As AI continues to advance, it will become easier than ever for bad actors to launch large-scale and highly sophisticated attacks. As a result, cybersecurity companies must keep up with growing threat vectors and increasingly sophisticated attacks. Thankfully, these capabilities are built into CrowdStrike’s Falcon platform, where the company’s software is designed to learn and adapt to each new type of threat it comes across.
Adaptive AI at the heart of the company’s Falcon software creates powerful network effects. When a new kind of attack against one customer is detected by Falcon, all other customers benefit from the data and knowledge generated from the incident. Better performance means more customers have an incentive to join the platform. More customers joining the platform means more threats are detected, which again improves the capabilities of the platform as a whole and improves the overall value proposition.
CRWD PE ratio (forward) data by YCharts
Although the company’s valuation is growth-dependent and trades at about 56 times its expected earnings this year, CrowdStrike’s performance and long-term growth opportunities more than justify the current price level. Last year, revenue increased 54% to $2.24 billion and non-GAAP (adjusted) net income increased 130% to $1.30 per share.
While macroeconomic pressures are still depressing the value of growth stocks, the AI cybersecurity arms race is only just beginning to heat up. CrowdStrike already provides mission-critical protection for many customers, and the software specialist looks poised to grow as advanced cybersecurity services become increasingly essential.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Keith Noonan has no positions in any of the mentioned stocks. The Motley Fool has positions and endorses Amazon.com, CrowdStrike, and Microsoft. The Motley Fool’s U.S. headquarters has a disclosure policy.
