Finding good prospects is crucial when making technological investments. In 2024, three gems stand ready to change the whole market narrative. These businesses, which operate across a range of industries, from information technology to industrials, have solid growth and innovation stories and are solid options among AI stocks.
The first company’s shift from net losses to net profits signals significant financial and operational improvement, bolstered by securing lucrative contracts. Meanwhile, the second company is rapidly adopting platformization to drive client adoption and secure future revenue streams, aligning with its ambitious revenue goal by 2030. Lastly, the third company’s strong revenue growth and market dominance in voice AI products indicate its potential to lead the next generation and outperform the market in 2024 and beyond. These are the top AI stocks investors should consider in 2024 — and beyond.
Innodata (INOD)
Innodata (NASDAQ:INOD) has reversed its net loss trend toward profitability. This signifies enhanced financial stability and operational effectiveness, critical to maintaining growth momentum. Q4 2023 delivered a net income of $1.7 million, as opposed to a net loss of $2 million in Q4 2022.
Certainly, the change from net losses to profitability reflects Innodata’s edge in deriving top-line, cost control and operations. The company’s financial standing solidifies upcoming growth projects. Additionally, significant long-term contracts that Innodata has landed offer revenue visibility and stability vital to propel valuation growth.
With a big tech customer, the business landed a three-year contract for around $23 million annually or $69 million over the three years. Thus, long-term agreements give Innodata a stable top-line for smart resource planning and allocation. This large contract derives from the company’s competitive stance and the perceived value of its services.
To conclude, the company wants to grow at a rate of 20% annually by 2024. This is primarily by entering the enterprise and big tech sectors. Therefore, by concentrating on high-growth areas, Innodata fits industry trends and sets itself up for long-term growth, making it an ideal option among AI stocks.
Palo Alto (PANW)
Palo Alto’s (NASDAQ:PANW) remaining performance obligations (RPO) grew by 22% (Q2 2024), while its top-line has attained a boost of 19%. This indicates that Palo Alto is sharply locking future income streams from its current contracts, implying that growth will continue steadily in the upcoming quarters.
Moreover, Palo Alto emphasized its commitment to promoting client adoption of its integrated cybersecurity solutions while outlining its expedited platformization and consolidation plan. The startup wants to benefit from the cybersecurity market’s move toward platform-based solutions.
Certainly, programs and activities aimed at reducing customer friction, speeding up product launches and promoting vendor consolidation help Palo Alto’s platformization ambitions. These initiatives include incentives to standardize estate rollout, no-cost introductory offers and legacy trade-ins to ease the transition to Palo Alto’s integrated platforms.
Further, Palo Alto’s platformization approach is anticipated to affect the company’s financial performance in the medium to long run. However, platformization initiatives may initially put pressure on billing growth.
Finally, Palo Alto’s platformization approach also projects the company’s long-term objectives forward. This includes boosting its annual recurring revenue (ARR) to $15 billion by 2030 and attaining industry-leading non-GAAP operating margins.
SoundHound (SOUN)
Its top-line is the base factor enabling SoundHound’s (NASDAQ:SOUN) explosive valuation potency. SoundHound had a considerable rise in revenue in Q4 2023, coming in at $17.1 million, reflecting a massive 80% increase over Q4 2022. This boost exceeds the norm for the industry and signifies that SoundHound can take market share and develop its top-line AI products.
The revenue for 2023 was $45.9 million, a 47% increase over 2022. This year’s growth demonstrates the heavy demand for SoundHound’s offerings across a range of industries. The growth context from 2022 to 2023 shows how well SoundHound has been fundamentally able to grow its business and take advantage of market possibilities.
Moreover, SoundHound has a solid revenue projection for 2024 and 2025. The company has set a midpoint target of $70 million and anticipates sales for 2024 to range from $63 to $77 million. Thus, SoundHound is efficient in its ability to hit a bigger top-line and maintain its prevailing growth trajectory.
Lastly, the 2025 projection suggests a top-line pass of $100 million. In short, this highlights SoundHound’s potential for long-term growth and its dedication to ongoing growth and market lead.
On the date of publication, Yiannis Zourmpanos did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.