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3 emerging trends in artificial intelligence (AI) and how to invest in them
Enterprise

3 emerging trends in artificial intelligence (AI) and how to invest in them

These companies could be on the cusp of major growth in the coming years.

If you are bullish on artificial intelligence (AI), there are many ways to invest in the opportunities in the technology sector. It’s not just about chip manufacturers. To capitalize on long-term trends in AI, there are other types of stocks that offer potentially promising growth opportunities in the coming years.

Technological research company Gardener has identified several AI trends that it believes will be dominant in the next few years. Three stocks that could benefit from these trends are: working day (WTAG 1.19%), CrowdStrike (CRWD 1.79%)And JUICE (JUICE 3.35%). That’s why these AI stocks could be great to buy and hold.

1st working day

Many employees fear that AI could destroy jobs. And Gartner predicts that by 2026, around a fifth of companies will flatten their organizational structures using AI. Companies that do this reduce the cost and complexity of their daily operations, giving them many reasons to rely on some form of automation in the future.

One company that stands out as a big winner in this trend is Workday, which provides enterprise cloud applications that can help streamline human resources and finance functions. Workday is using AI to improve processes and says it can help minimize errors and “modernize” finance, helping companies operate more efficiently and incorporate more checks and balances automatically, eliminating the need for manual Verification and monitoring is at least partially reduced.

There are many more opportunities for Workday, and with many companies already relying on Workday’s software to automate and improve their operations, capitalizing on AI seems like an obvious choice. With strong profit margins of around 20%, earnings could rise along with sales as the company is likely to see 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 good buy for AI investors.

2. CrowdStrike

A big problem for companies with AI is that hackers and fraudsters also have better tools. The need to own a top cybersecurity stock is obvious. And Gartner predicts that by 2028, a quarter of corporate breaches will be the result of “misuse of AI agents.” The use of AI agents makes it easier for malicious actors to carry out both larger numbers and more complex attacks.

CrowdStrike uses generative AI to detect threats and notify organizations of breaches more quickly. It claims to have “the industry’s most comprehensive AI-native defense.”

The company came under fire earlier this year due to an outage in its software 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 well-known name in cybersecurity and is investing in next-generation technologies to keep its customers safe, this can be another good stock to buy and hold. It’s not a cheap stock, trading at a P/E ratio of over 70, but the company’s bottom line has improved. As the company continues to grow, this multiple is likely to 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 run because of AI.

3.SAP

Trust is undoubtedly a growing issue when it comes to AI. It will be more important than ever to have corporate governance 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 keep an eye on and monitor AI agents.

CrowdStrike can play a role in this, but I think software company SAP can play an even more important role here, as it can help determine what these Guardian Agents should be looking for and how they should evaluate data to ensure proper financial controls are in place are place. SAP is a trusted name in accounting and finance and can help companies maintain data integrity and adhere to necessary protocols and procedures while still relying on AI agents for added efficiency.

SAP’s enterprise resource planning solutions can help automate tasks and introduce rules to ensure that strict controls, whether it is a human user or an AI agent, limit a company’s losses and its assets can protect. The company trades at a forward P/E of 34, which may seem a bit expensive for a company that only grew revenue by 6% last year, but is arguably justified given the potential the stock has in the long run.

David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends CrowdStrike and Workday. The Motley Fool recommends Gartner. The Motley Fool has a disclosure policy.

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