Looking back, 2023 may be a tipping point for artificial intelligence (AI). The latest developments in large-scale language models have spawned next-generation technologies such as OpenAI’s ChatGPT, but this is likely just the beginning. The capabilities of these AI systems inspire imaginations, and how the brightest minds in business can use this breakthrough technology to automate repetitive tasks, improve customer service, and create new opportunities. I’m looking for
With the ongoing AI revolution, investors are looking high and low to profit from the enormous potential offered by this cutting-edge technology. Estimates vary widely, but one of the most bullish predictions comes from Kathy Wood’s Ark His Investment Management, which says the global AI software market will grow at 42% per year, and by 2030, he will grow to 14%. It suggests that it will break the trillion dollar mark. , which helps show that the market for AI-enabled software could grow at a breakneck pace for years to come.
Let’s take a look at two booming stocks that are well-positioned to benefit from the AI revolution.
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1. Hubspot
hubspot (Hub -0.14%) I made my fortune by subverting traditional advertising. It pioneered inbound his marketing concept of building relationships with potential customers through engaging content provided online, on social media and in blog posts.
Since then, the company has expanded its empire to cover the entire spectrum of customer relationship management (CRM) with a vast ecosystem of interconnected products. These include solutions for marketing, sales, service, content management and operations teams with tools to help manage data, commerce, reporting, automation, content, messaging and payments.
During the company’s first quarter earnings call, CEO Yamini Langan explained what the latest advances in AI mean for HubSpot and its customers. [a] Powerful yet easy to use… an AI-powered all-in-one CRM platform. ,” he said, noting that the company is integrating generative AI across its products, and goes on to say that the company is “differentiated by its unique and extensive data.” distribution. ”
“HubSpot CRM data is unified and consistent, making it easier for AI to drive ingestion and improve relevance,” says Rangan. Finally, the CEO noted that HubSpot’s customers “do not have to be AI experts to reap the transformative benefits” available on its platform.
HubSpot’s first quarter results offer a glimpse of what’s possible. Even in the midst of tough economic times, sales grew 27% year over year and adjusted earnings per share (EPS) he more than doubled to $1.25. This result was driven by solid customer growth, up 23%. Perhaps more important is expanding relationships with existing customers, as 45% of the company’s annual recurring revenue is generated by customers who use three or more hubs.
The stock is currently selling at 10 times next year’s sales, which is far from cheap by traditional valuation measures. That said, HubSpot’s stock is up more than 1,600% of his in less than nine years, and he’s still far from his peak. The valuation seems much more reasonable given its history of strong growth.
2. MongoDB
MongoDB (MDB -1.43%) It made a name for itself by breaking the traditional database paradigm. Most databases are limited to rows and columns, but MongoDB’s Atlas cloud-native platform can handle much more data, including video and audio files, social media posts, and even entire documents. Provide users with a more robust database solution. This gives developers more flexibility in creating software applications.
During the company’s first quarter 2024 earnings release, CEO Dev Ittycheria explained what the move to AI means for MongoDB. “We believe that recent advances in AI represent the next frontier in software development. The move to embed AI in applications requires:” A broad and sophisticated set features enable developers to move faster and create a competitive advantage. He added that the company is “well-positioned to benefit from the next wave of AI applications in the coming years.”
MongoDB’s first quarter fiscal year 2024 results speak for themselves. Revenue was $368 million, up 29% year-over-year, and adjusted EPS was $0.56, up 180%, despite economic headwinds. This result was driven by the largest net addition of new customers in more than two years. The results were driven by the company’s fully managed platform-as-database-as-a-services platform, Atlas, which grew 40% year-over-year and now accounts for 65% of MongoDB’s total revenue.
The stock may seem expensive at 14 times next year’s sales, but consider the following: MongoDB’s stock has risen more than 1,000% in his five-plus years, despite a crash caused by the economic downturn, so its valuation shouldn’t be taken for granted. vacuum.
As new customers seek a platform that offers the highest capacity to build and run new AI applications, MongoDB’s Atlas is the first choice.
