Investing around $3,000 in you? Here are three notable Artificial Intelligence (AI) stocks to consider for a long-term investment:

Investing around $3,000 in you? Here are three notable Artificial Intelligence (AI) stocks to consider for a long-term investment:

Artificial Intelligence (AI) company shares are currently trending high. However, some may be overvalued with uncertain future prospects, making them less suitable for long-term investment strategies like 'buy-and-hold'. On the other hand, there are some AI stocks that show promise for future growth.

If I were investing $3,000 in AI stocks, I'd diversify my portfolio by investing in both established players and newer ventures. Here are my top three AI stocks for long-term investment.

The market behemoth

With a market capitalization surpassing $3 trillion, Microsoft (MSFT -0.51%) stock is a sizeable investment today, more so than two years ago. This increased value can be partially attributed to the growing excitement around its AI offerings.

Microsoft's major AI investment is its stake in ChatGPT's developer, OpenAI, which has ballooned to a staggering $13 billion over several years, constituting nearly half the AI start-up's current estimated value! Microsoft has also made significant improvements to its own products, such as AI-driven apps and tools for its Azure cloud platform, and AI Copilot for its Office suite. Furthermore, Microsoft's varied revenue sources, including software, cloud services, and gaming, ensure its financial success isn't entirely dependent on its AI investments.

Despite the market's enthusiasm for AI, Microsoft's current valuation at 34 times earnings is within its historical range, and its shares have underperformed the S&P 500 in 2024. This seems like an opportune moment to acquire shares.

The resurgent company

Although primarily known for its cybersecurity services, CrowdStrike (CRWD 0.69%) has made substantial AI investments that promise significant returns for the company.

CrowdStrike's origins lie in the concept of crowdsourced cybersecurity. By swiftly deploying AI-enhanced threat responses across its vast network, CrowdStrike's efficient model was ideally suited for AI integration. It has begun to incorporate AI tools into its primary Falcon system, such as Threat Graph, which uses AI and machine learning to monitor threats in real-time, and AI-powered conversational assistant Charlotte AI, which helps analysts locate and address system vulnerabilities.

CrowdStrike made headlines in July due to a problematic update that led to widespread internet outages. The stock lost over 40% of its value and has yet to fully recover. However, the company appears to have navigated the aftermath effectively, offering an attractive investment opportunity for this AI innovator in the swift-growing cybersecurity industry.

The dedicated AI firm

Interest in AI data analytics company Palantir Technologies (PLTR 3.92%) has skyrocketed, with the stock price surging over 245% this year. Trading at around 54 times sales, the stock seems overpriced. While I recommend waiting for a lower price point to invest, I believe in Palantir's long-term potential, fully tied to its AI offerings.

Palantir's flagship platform, Gotham, is employed by U.S. government intelligence and defense agencies for detecting and monitoring potential threats. By using AI to analyze combined data across multiple incompatible systems, Gotham can uncover hidden dangers that individual agencies might otherwise miss. The company has also expanded its customer base for its corporate data analysis platform Foundry, and introduced new AI products like Apollo for software deployment.

As a dedicated AI firm, Palantir is a riskier investment than Microsoft or CrowdStrike. Its current high valuation makes its stock vulnerable to a short-term pullback if growth slows or there's a prominent misstep. However, Palantir's management has successfully converted its AI assets into new products and revenue streams, so I anticipate its success persisting over the long term.

Select the best fit for you

If you wanted to invest $3,000 in Microsoft, CrowdStrike, and Palantir, you'd have numerous possibilities. A risk-averse investor might choose to invest more in Microsoft, whereas an investor comfortable with volatility might lean towards Palantir. By building a diversified portfolio with three shares each of Microsoft and CrowdStrike at their current prices and allocating the remaining funds to Palantir (approximately 10-11 shares), you could create a balanced portfolio.

Regardless of how you divide your investment, these AI companies seem like strong choices for long-term holding.

Based on the text, here are two sentences that contain the words 'finance', 'investing', and 'money':

1. To ensure a balanced portfolio, a risk-averse investor might choose to invest more in Microsoft, known for its financial stability, while allocating a smaller portion to the more volatile Palantir, demonstrating a strategic approach to finance and investing with their $3,000.
2. The potential for exponential growth in AI stocks like Microsoft, CrowdStrike, and Palantir, driven by their investments in AI technology and data analytics, is enticing to many investors looking to diversify their investment portfolios, seeking to capitalize on the finance sector's transformative shift towards technology.

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