AI adoption is driving revenue growth for technology companies by improving product engagement and ad performance. Major social platforms use AI recommendation tools to increase user time spent and enhance ad effectiveness, leveraging massive daily active user bases. Cloud-based AI services remain in high demand among small businesses, benefiting cloud providers that offer scalable AI solutions. Companies offering AI hardware and software are experiencing healthy growth, but elevated valuations across the tech sector make finding attractively priced AI stocks challenging. Some solid AI-focused companies remain available at reasonable valuations for long-term investors.
Artificial intelligence (AI) is turning out to be a great growth driver for technology stocks. Companies that offer AI hardware and software solutions are seeing healthy growth in their business and their valuations. That means finding an attractively valued AI stock trading at a reasonable valuation is now a challenge, considering the rich valuations at which tech stocks are trading thanks to AI. However, there are still some solid AI companies investors can buy stock in at the moment without paying a rich multiple. Let's take a closer look at two of them.
With a daily active user base of almost 3.5 billion, Meta gives advertisers access to a gigantic audience. Its AI recommendation tools encourage this huge user base to spend more time on its platform. This, in turn, leads to an improvement in the performance of ads. CEO Mark Zuckerberg remarked on Meta's earnings conference call last month that its improved ad performance was a result of "AI unlocking greater efficiency and gains across our ads system."
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