3 Artificial Intelligence Stocks You'll Be Glad You Bought 5 Years From Now

Sentiments about stocks can change sharply, especially over a five-year period. This is true of both the artificial intelligence (AI) industry and AI-driven stocks. As the technology has advanced, many AI stocks have fallen out of favor while others have moved to the forefront.

Looking forward five years, nobody knows for sure which AI stocks will emerge as the market leaders. Nonetheless, some stocks will likely remain major forces in the AI industry for years to come, and three Motley Fool analysts believe investors will likely reach 2029 feeling glad they bought these companies.

Poised to meet the world's need for more cybersecurity

Jake Lerch (CrowdStrike): My pick is CrowdStrike (NASDAQ: CRWD), a leading provider of cybersecurity solutions with a proven track record in the industry.

Part of why CrowdStrike is an excellent buy-and-hold candidate is the overall growth of the cybersecurity market. In short, cybercrime is everywhere, and organizations now face enormous risks if they fail to secure their digital assets. Casino operators have seen their slot machines hacked, healthcare providers have had their billing systems compromised, and pipeline operators have watched as their infrastructure has been shut down.

This presents a significant opportunity for companies like CrowdStrike, as the demand for cybersecurity solutions is poised to surge. Statista estimates that the worldwide cybersecurity market will expand to over $500 billion by 2030, up from around $300 billion in 2022, indicating a potential for substantial growth in the sector.

With the overall market growing, CrowdStrike is leveraging its competitive advantages within the sector. The company operates a subscription-based model, selling access to its Falcon platform and various cloud-based, AI-powered security modules designed to protect endpoints, networks, and data.

CrowdStrike is a one-stop shop, and it's clear that its customers like what it can offer. As CEO George Kurtz put it, "Customers favor our single platform approach. ... CrowdStrike is cybersecurity's consolidator of choice, innovator of choice, and platform of choice to stop breaches."

Consequently, CrowdStrike is delivering exceptional financial results. In its most recent quarter (the three months ended Jan. 31), CrowdStrike reported annual recurring revenue of $3.4 billion, up 34% from a year earlier. Moreover, CrowdStrike was profitable for the fourth straight quarter. This marks a significant milestone in the company's life cycle as regular profits have become the norm.

Finally, analysts expect CrowdStrike to grow revenue by 30% this year and 27% next year. In summary, CrowdStrike remains an up-and-coming company in a fast-growing sector. Growth-oriented investors should take notice; this stock looks set for a bright future.

Buy this SaaS stock on the heels of its fabulous quarter

Justin Pope (Monday.com): My pick is Monday.com (NASDAQ: MNDY), and it's pretty obvious once you consider all the fundamentals here. The business is firing on all cylinders, as evidenced by Q1 earnings that were so good that Wall Street sent the stock soaring roughly 20% higher on the news. What got investors so excited? It boils down to a company growing both customers and profits rapidly.

Monday.com is a SaaS business that sells cloud-based software on a subscription model. The product is simple -- it's a collaborative platform that helps company employees manage projects and collaborate on work tasks. The company refers to itself as a workplace "OS," short for operating system.

The idea is that a person or two begin using the software, and it spreads throughout a company as it becomes popular. That's why Monday.com has a stellar 114% net revenue retention rate for customers with at least 10 users. Moreover, customers spending at least $50,000 annually grew 48% year over year in Q1 to over 2,400.

Monday.com is doing this while putting up all-time highs in cash flow and non-GAAP earnings of $0.61 per share, blowing away analysts' estimates by $0.21. This company still sports a modest $11 billion market capitalization, which sets up investors for stellar returns if Monday.com eventually becomes a major player in the enterprise software space.

Monday.com is doing everything right, making the stock worthy of closer examination by long-term investors. Those looking five years out could have a gem on their hands today.

This AI pioneer is not going anywhere

Will Healy (Alphabet): Although it is amazing how fast investors have soured on the AI prospects of Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) over the past year, my choice is the Google parent. Long dominant in search, it first integrated AI into its search tool in 2001. It has since applied AI to all of its applications and products, proclaiming itself an "AI first" company in 2016.

Nonetheless, the rise of OpenAI's ChatGPT appeared to catch Alphabet off guard. Its search tool faced its first meaningful competitive threat in years when Microsoft's Bing partnered with ChatGPT.

Moreover, when Alphabet responded with its generative AI product called Gemini, users gave it mixed reviews. Although it recently rolled out AI-native search to all users for the first time, investors seem more optimistic about the AI of other mega-techs such as Microsoft or Amazon.

However, despite missteps, counting Alphabet out is likely premature. Besides its extensive experience in the AI field, Alphabet invests heavily in research. Among the companies Alphabet owns, it combined subsidiaries to form Google DeepMind, which takes a multidisciplinary approach to developing AI applications.

Additionally, Google Cloud, which uses and supports AI applications, is one of its fastest-growing segments. In the first quarter of 2024, its revenue increased 28%, compared to 15% for the company overall. It has also emerged as the third-largest cloud provider.

amazon, microsoft, 3 artificial intelligence stocks you'll be glad you bought 5 years from now

Cloud Infrastructure Market Share, By Company - Q1 2024

Furthermore, Alphabet has tremendous resources to back DeepMind and Google Cloud or to buy out other businesses. As of the end of Q1, the company claimed $108 billion in liquidity, an amount unmatched by almost all of its potential competitors.

Incredibly, its cash pile could continue to climb. In Q1 alone, Alphabet generated nearly $17 billion in free cash flow, and for all of 2023, that free cash flow came in at over $69 billion. This, along with its existing AI technologies, gives Alphabet tremendous optionality as it works to remain a leader in AI and related industries.

Where to invest $1,000 right now

When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for two decades, Motley Fool Stock Advisor, has more than tripled the market.*

They just revealed what they believe are the 10 best stocks for investors to buy right now… and CrowdStrike made the list -- but there are 9 other stocks you may be overlooking.

See the 10 stocks

*Stock Advisor returns as of May 13, 2024

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jake Lerch has positions in Alphabet, Amazon, and CrowdStrike. Justin Pope has positions in Monday.com. Will Healy has positions in CrowdStrike. The Motley Fool has positions in and recommends Alphabet, Amazon, CrowdStrike, Microsoft, and Monday.com. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

OTHER NEWS

6 hrs ago

Transfer: Okejepha set to complete move to Tanzanian club Simba SC

6 hrs ago

50 Rep members demand Nnamdi Kanu’s release, write Tinubu

6 hrs ago

Euro 2024: Be bold enough to drop Harry Kane – McCoist tells Southgate

6 hrs ago

F2 Spain: Crawford victorious as Correa gets podium retribution

6 hrs ago

I’m a Mortgage Lender: 5 Red Flags Your Financing Will Fall Through Before Closing

6 hrs ago

This Stock Is Down 42% This Year, but Wall Street Sees a 73% Upside

6 hrs ago

Where Will Tellurian Be in 5 Years?

6 hrs ago

4 Delicious Chicken Burger Recipes

6 hrs ago

Fun With Flags #7 - Oddly Shaped Flags (Nepal, Vatican City, Switzerland And More!)

6 hrs ago

For the First Time in 65 Years, This Recession Indicator Has Been Wrong -- but Wall Street Isn't Out of the Woods Just Yet

6 hrs ago

Albon to start from Spanish GP pitlane after F1 power unit changes

6 hrs ago

What If Two Hurricanes Collided?

7 hrs ago

3 Artificial Intelligence Stocks to Buy and Hold for Great Long-Term Potential

7 hrs ago

Nvidia and Microsoft Will Make Up Over 40% of This Popular ETF. Here's Why This Alternative ETF Could Be a Better Option.

7 hrs ago

Lakers mock draft: Zach Edey, Tristan da Silva among best 2024 NBA prospects to pair with LeBron James, Anthony Davis

7 hrs ago

Beyond Nvidia: the search for AI's next breakthrough

7 hrs ago

Forget NuScale Power: 2 Nuclear Power Stocks to Buy Instead

7 hrs ago

Beyond green card: Nigerians find true love abroad amid cultural bias

7 hrs ago

Rockefeller Foundation President Holds Productive Meetings in Nigeria to Advance Ambitious 300 Million Project

7 hrs ago

Best Stock to Buy Right Now: Amazon vs. Disney

7 hrs ago

How to Use Packing Cubes For Travel & 6 Tips for Minimalist Packing

7 hrs ago

3 Nasdaq Stocks to Buy Before They Soar as Much as 97% According to Select Wall Street Analysts

7 hrs ago

Warren Buffett Doesn't Own Nvidia. Here's How He's Profited From the Artificial Intelligence (AI) Stock's Big Gains Anyway

7 hrs ago

Meet 1 of the Market's Latest Stock-Split Stocks. Is It a Buy?

7 hrs ago

1 Growth Stock Down 34% to Buy Right Now

7 hrs ago

4 Reasons to Buy Enterprise Products Partners Stock Like There's No Tomorrow

8 hrs ago

Netizens Oppose Politicians' Presence at Bishop Gachathi's Consecration

8 hrs ago

T20 World Cup: Bangladesh suffer another thumping defeat to India

8 hrs ago

Marcos says Philippines won't 'instigate war' with China

8 hrs ago

3 Artificial Intelligence (AI) Stocks That Are Screaming Deals

8 hrs ago

VIDEO: Heavy Security Presence at Nyahururu Church as Ruto Attends Service

8 hrs ago

Isaac Mwaura Discloses Foreign Countries Funding Anti-Finance Bill Protests

8 hrs ago

Monthly inflation slowed amid policy tightening – CBN

8 hrs ago

How Long Costco's Most Popular Products Last

9 hrs ago

Touching Reunion: Evelyn Wanjiru and Anastacia Mukabwa in India

9 hrs ago

NATO Leadership Change: Mark Rutte Set to Succeed Jens Stoltenberg as NATO Secretary-General

9 hrs ago

Every Premier League club’s pre-season fixtures ahead of 2024-25

9 hrs ago

Japa: Civil servants must refund salaries collected, department heads punished – Tinubu

9 hrs ago

Watch Videos: See how Kenyan Revellers Stopped Music, Dancing to Observe Reject Hour in Clubs

9 hrs ago

What If We Built Cities on the Moon?