If you’re optimistic about artificial intelligence (AI), there are plenty of ways to invest in the opportunities in the technology sector; it’s not just about chip makers. To benefit from long-term trends in AI, there are other types of stocks that offer exposure to some potentially promising growth opportunities in the coming years.
Technological research agency Gartner has identified several AI trends that it believes will be dominant in the coming years. Three stocks that could benefit from these trends include: Working day (NASDAQ: WDAY), CrowdStrike (NASDAQ: CRWD)And JUICE (NYSE: SAP). Here’s why these could be great AI stocks to buy and hold.
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Many workers are concerned that AI could eliminate jobs. And Gartner predicts that by 2026, about a fifth of companies will flatten their organizational structures using AI. Companies that do this will reduce the cost and complexity of their daily operations, giving them ample reason to rely on some form of automation in the future.
One company that stands out as a big winner of this trend is Workday, which provides companies with enterprise cloud applications that can help streamline HR and finance functions. Workday uses AI to help improve processes and says it can help minimize errors and “modernize” finances, which should help companies operate more efficiently and build in more checks and balances automatically, eliminating at least some need for manual control and supervision is reduced.
There are plenty of other opportunities for Workday, and with many companies already relying on the software to automate and improve their operations, taking advantage of AI seems like an obvious choice. With strong profit margins of around 20%, profits could rise along with sales as there is likely to be a surge in demand in the future.
The tech stock trades at a reasonable price-to-earnings ratio of 29 (based on analyst expectations) and could be a great buy for AI investors.
A big problem for companies with AI is that hackers and scammers will also have better tools at their disposal. The need to own a top cybersecurity stock is evident. And Gartner predicts that by 2028, a quarter of enterprise breaches will be the result of “AI agent abuse.” The use of AI agents will make it easier for malicious actors to carry out both a larger number and more sophisticated attacks.
CrowdStrike uses generative AI to help detect threats and notify businesses of breaches faster. It claims to have “the most complete AI-native defense in the industry.”
The company faced bad publicity earlier this year due to a software glitch that affected companies around the world. But CrowdStrike claims this was due to a problematic update, and not a breach or hack.
Since CrowdStrike is a prominent name in cybersecurity and is investing in next-generation technologies to keep its customers safe, this could be another good stock to buy and hold. It’s not a cheap stock, as it trades at a price-to-earnings ratio of over 70, but its business results have improved. As the company continues to grow, that multiple should decline as margins improve. If you’re willing to be patient with the stock, CrowdStrike has the potential to be a big winner in the long term thanks to AI.
Trust is undeniably a growing problem when it comes to AI. It is becoming more important than ever to have board safeguards in place to protect a company’s trade secrets, financial data and other information. Gartner predicts that by 2028, 40% of companies will use Guardian Agents to monitor and supervise AI agents.
CrowdStrike can play a role in this, but I think software company SAP can play an even more crucial role here, as it can help determine what these Guardian Agents should look for and how they should evaluate data to ensure proper financial controls are in place. place. A trusted name in accounting and finance, SAP can help businesses maintain data integrity and comply with necessary protocols and procedures, while still relying on AI agents for added efficiency.
SAP’s enterprise resource planning solutions can help automate tasks and implement rules to ensure that, whether it’s a human user or an AI agent, strict controls can limit a company’s losses and are can protect assets. The company trades at a forward price-to-earnings ratio of 34, which may seem a bit expensive for a company that saw revenue grow by just 6% last year, but it is arguably justified given the long-term potential the stock possesses .
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David Jagielski has no position in the stocks mentioned. The Motley Fool holds and recommends positions in CrowdStrike and Workday. The Motley Fool recommends Gartner. The Motley Fool has a disclosure policy.
3 Emerging Trends in Artificial Intelligence (AI) and How to Invest in Them was originally published by The Motley Fool
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