2 Under the Radar AI Stocks to Consider
Are you sick of hearing about AI yet? Well, sorry to break it to you but you’re going to be hearing about it for a while, at least on Wall Street. While we’re used to hearing about companies like NVIDIA (NASDAQ: NVDA) and Tesla (NASDAQ: TSLA), some other under-the-radar stocks also deserve your attention.
Why? Because chips aren’t the only way to invest in the AI industry. And while semiconductor stocks have had an incredible run, other tech industries are just as involved in AI as chips. So if you’re tired of reading about NVIDIA, consider these two AI stocks to add while the chip market cools off.
Crowdstrike (NASDAQ: CRWD)
I have been writing about Crowdstrike since it was below $100 and my conviction has never been stronger. It has distanced itself as the best-in-class cybersecurity company, potentially in the world. This stock has certainly had its strong rally this year and has gained nearly 150% over the past 52 weeks. So how can it still be a stock worth considering?
Crowdstrike used AI before AI was even popular. Its Falcon platform uses machine learning to help identify and neutralize threats faster and has been trained by trillions of different online threats. Falcon utilizes a cybersecurity mesh network rather than each user having its endpoints. By using this network effect, Crowdstrike can continue to strengthen its security platform with each threat that Falcon stops.
It’s certainly expensive and trades at about 81 times forward earnings, but sometimes these premium companies deserve a premium valuation. In my opinion, Crowdstrike is one of those especially when you consider its Annual Recurring Revenue (ARR) increased by 34% in the most recent quarter. Customers are using it, staying loyal, and willing to pay more each year. That’s almost all you need when it comes to a SaaS company like Crowdstrike.
Amazon (NASDAQ: AMZN)
When it comes to big tech companies, Amazon might not be the first company you think of when it comes to using AI. Especially when it is compared to its peers like Microsoft (NASDAQ: MSFT), Alphabet (NASDAQ: GOOGL), and NVIDIA. Amazon might not have its own generative AI platform right now, but it has certainly dabbled in the world of AI.
First, the obvious ways in which Amazon uses AI. Its marketplace is powered by machine learning algorithms that make shopping a much more user-friendly experience. Amazon also has its Bedrock platform which utilizes AWS to build and create AI-powered applications and foundational models. Finally, Amazon has made a major investment into the AI startup and OpenAI's rival Anthropic. Anthropic has created the ChatGPT rival Claude AI, which many believe could one day surpass GPT. Amazon has deep pockets and hasn’t been shy about spending on AI. What that eventually looks like for AWS and its other platforms is anyone’s guess. I wouldn’t bet against Amazon and neither should you!
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