TLDR:
- Not all AI stocks will be successful in the long run.
- Three companies with sustainable competitive advantages are attractive after the recent market sell-off.
Artificial intelligence stocks have been a major driving force in the bull market, but have also suffered losses in the recent market sell-off. Investing in companies with strong competitive advantages across various areas is key for long-term success. Buying these stocks at a discounted price can lead to excellent returns. Here are three AI stocks to consider:
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Amazon
Key Points:
- Leading public cloud provider with Amazon Web Services.
- Strong in e-commerce and digital advertising.
Amazon’s diverse revenue streams, strong positioning in cloud computing, and continuous growth in cash flow make it a compelling investment option, especially at its current price.
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Microsoft
Key Points:
- Rapidly growing in the hyperscale cloud market with Azure.
- Investing heavily in AI and experiencing strong growth in AI-focused services.
Despite a premium valuation, Microsoft’s growth prospects and long runway make it a solid choice for long-term investors.
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Adobe
Key Points:
- Renowned for its creative software suite with new generative AI features.
- Return to growth in annualized recurring revenue and strong performance in core metrics.
Adobe’s industry standard status, strong network effect, and attractive valuation make it a favorable pick during a market sell-off.