3 Artificial Intelligence (AI) Stocks to Invest $1,000 in During a Market Downturn and Hold Forever

Throughout the recent months, as stock values have mainly risen, the overall sentiment has been positive. Yet, the emotional aspect of investing can ensnare traders and shorten their recollections. Not too far back, Wall Street was shrouded in pessimism. It’s crucial to remember how erratic Wall Street can be. In general, the market does not sustain a singular direction for extended periods, and shifts can swiftly occur. Numerous technology equities have recently encountered sudden turbulence, hinting at a possible correction in this ongoing bull market.

Welcome it. Corrections are beneficial and allow investors to procure thriving stocks at a reduced price. An array of prominent artificial intelligence (AI) equities come to mind in this regard.

Presented here are three equities that investors can acquire for less than $1,000 and confidently retain for the long haul. Consider beginning with small investments now and ramping up purchasing if market volatility persists.

1. Palantir Technologies

Data-focused and AI software corporation Palantir Technologies (NYSE: PLTR) has been garnering significant growth momentum from commercial clients after establishing a foundation catering mainly to the U.S. government and its associates. Palantir crafts personalized software on its exclusive platforms, aiding clients in analyzing data and patterns, facilitating quick decision-making across various sectors from national security to healthcare. The essence of the argument is that data is evolving into a competitive asset, and Palantir empowers its clients to leverage their data.

The narrative of Palantir’s growth is still in its infancy. By the end of 2023, the company only held 375 commercial accounts. Considering that there are 350,000 large corporations globally, Palantir’s software may not be affordable for every organization. Nevertheless, it seems plausible for Palantir to expand its client base into the thousands over the forthcoming decade and beyond.

An added benefit is that Palantir is rapidly transforming into a profitable entity. It consistently upholds profitability in accordance with generally accepted accounting principles (GAAP), with analysts projecting a compounded annual earnings growth rate of 26% in the next three to five years. Despite its relatively high valuation, at 69 times earnings, investors should appreciate a market downturn that offers Palantir at more attractive valuations.

2. Microsoft

Technology conglomerate Microsoft (NASDAQ: MSFT) has entrenched itself in the AI arena, leveraging its cloud service Azure and its strong collaboration with ChatGPT and Sora creator OpenAI. Microsoft is integrating AI technology into its operations, including Microsoft 365 software, Bing search, and enterprise software applications. Azure also fuels AI solutions for external organizations as one of the world’s leading cloud platforms.

The remarkable aspect of Microsoft is its robust and diversified portfolio, ensuring that investors not only benefit from AI advancements but also possess a perpetual stock. With nearly $70 billion in annual free cash flow and a rock-solid balance sheet boasting a AAA credit rating higher than that of the U.S. government, Microsoft stands as one of the least likely companies to falter.

The fusion of AI enthusiasm and Microsoft’s stellar reputation has led to a premium valuation of the stock, trading at 34 times earnings, with analysts projecting a 16% average annual earnings growth rate. If market volatility triggers a decline from its peak levels, investors should prioritize Microsoft as a top choice for acquisition.

3. CrowdStrike Holdings

The cybersecurity sector presents an immense long-term growth opportunity. The rising digital economy necessitates advanced security technologies to combat sophisticated cyber threats and attackers. CrowdStrike Holdings (NASDAQ: CRWD) is part of a new wave of next-gen security platforms utilizing cloud capabilities and AI to deliver real-time adaptive protection.

CrowdStrike offers a range of modular products and services, with strong revenue growth fueled by cross-selling to clients. As of Q3 in CrowdStrike’s fiscal year 2024, approximately 63% of customers subscribe to at least five modules, while 26% pay for seven or more. The business maintains high profitability, converting 30% of revenue into cash flow, and possesses an additional $2.4 billion in net cash.

The stock has experienced significant growth, surging 170% over the past year. Currently trading at 80 times earnings, even with an anticipated annual earnings growth rate of 36%, the valuation may appear steep. Investors should refrain from attempting to time their initial purchase perfectly but should approach building a position gradually, increasing purchasing efforts when market fluctuations challenge the stock’s upward momentum.

Is it worthwhile to invest $1,000 in Palantir Technologies at this moment?

Prior to investing in Palantir Technologies, it is advisable to consider the following:

The Motley Fool Stock Advisor analyst team recently identified the10 most promising stocks for investors to acquire at present… and Palantir Technologies did not make the list. The stocks identified are anticipated to yield significant returns in the upcoming years.

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Justin Pope does not possess positions in any of the equities mentioned. The Motley Fool holds positions in, and advocates for, CrowdStrike, Microsoft, and Palantir Technologies. The Motley Fool recommends long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool abides by a disclosure policy.

Market Decline? 3 Artificial Intelligence (AI) Stocks to Purchase With $1,000 and Maintain Indefinitely was originally presented by The Motley Fool

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