Unleashing the Spirit of Innovation: Why the Nasdaq is Expected to Skyrocket in 2024 and My Picks for Top Software Growth Stocks
In the past few years, high inflation and escalating interest rates have impacted the economy significantly. Yet, despite these economic pressures, the stock market has shown some signs of strength. The Nasdaq Composite, in particular, made a strong comeback last year, surging 43% due to the hype surrounding artificial intelligence (AI).
Although the Nasdaq experienced a 33% decline in 2022, it's come back in 2024, showing a 13% growth so far. This resilience in the face of adversity is a testament to the potential of AI-focused stocks. Given the present tailwinds propagating AI innovation, let's dive into five stocks operating at the intersection of software and AI, and why they are an attractive long-term investment prospect.
Palantir Technologies (PLTR)With a strong foothold in both government and private sectors, Palantir has carved out a place for itself in the intensely competitive AI market dominated by tech giants. The company's novel lead-generation strategy has led to an impressive 42% year-over-year increase in customers last year. In addition, Palantir's U.S. commercial customer base has grown 69% year-over-year, bolstering revenue and profitability.
While the stock's price-to-sales (P/S) ratio of 21 might not be considered cheap, its current P/S is significantly lower than its past highs, making it a compelling buy opportunity for those willing to take advantage of the dip.
Shopify (SHOP)Shopify, an e-commerce platform for small and medium-sized enterprises (SMEs), has shown promising growth in terms of revenue, margins, and cash flow. Despite the company's previous botched acquisition and a premium valuation compared to its peers, investing in Shopify presents a long-term turnaround prospect. Its commitment to AI and fintech could also make it a strong AI plant for investors.
ServiceNow (NOW)ServiceNow, an enterprise software platform, has demonstrated remarkable cross-selling prowess and an impressive renewal rate (98%). The company's revenue skyrocketed 27% year-over-year, bolstered by its expanding customer base and new business acquisitions. With a P/S ratio of 16.8, ServiceNow's stock represents an undervalued opportunity for investors in the AI and enterprise software space.
Monday.com (MNDY)Monday.com is an up-and-coming CRM and automation tools provider, poised for massive growth in the vast workspace productivity market. With $217 million in revenue for Q1, Monday.com's net dollar retention was 110%, demonstrating impressive customer loyalty and growth. Given its premium valuation, Monday.com could present an attractive investment opportunity for those willing to pay for its long-term potential.
CrowdStrike (CRWD)CrowdStrike provides cybersecurity solutions, representing a massive market opportunity. With a total addressable market currently estimated at $100 billion, CrowdStrike appears to be well-positioned for growth. Although shares have soared 136% over the last year, CrowdStrike's P/S ratio of 27.7 is still below its five-year average, making it an appealing buy for patients investors.
In closing, while the economy grapples with high inflation and interest rates, AI-focused stocks are showing resilience and growth potential. The five stocks discussed in this article have demonstrated impressive performance in their respective sectors, paving the way for future success in the era of AI.
In the current economic climate, investors might consider allocating funds towards these AI-focused stocks due to their resilience and growth potential, despite high inflation and interest rates affecting the finance sector. For instance, companies like Palantir Technologies and Shopify have seen significant growth in customer base and revenue, making them attractive long-term investment prospects.