As we progress through 2024, there continues to be many AI stocks to watch. The surge in AI applications, particularly in generative AI and machine learning, has created lucrative opportunities for investors. Particularly for those looking to capitalize on the next wave of technological innovation.
Despite economic uncertainties and fluctuating market conditions, AI stocks have demonstrated resilience and a strong upward trajectory. The Federal Reserve’s dovish stance of late has further bolstered investor confidence. As businesses increasingly integrate AI solutions to enhance efficiency and drive innovation, the demand for cutting-edge AI technologies is set to escalate.
As AI continues to reshape industries and drive economic transformation, keeping an eye on the top-performing AI stocks is essential. Here are three AI stocks that deserve a place on your must-watch list this quarter.
Upstart (UPST)
Upstart (NASDAQ:UPST) has carved out a niche in the fintech sector by leveraging advanced Artificial Intelligence to revolutionize the personal loan industry.
Unlike traditional models that primarily rely on FICO scores, Upstart employs a sophisticated AI platform to determine creditworthiness. This method has demonstrated a superior ability to predict loan defaults.
Despite the challenges posed by rising interest rates and economic uncertainty, Upstart has shown resilience and an ability to adapt. The company’s financial results for the first quarter of 2024 evidenced a significant recovery. The company posted a revenue of $128 million, up 24.16% year-over-year (YOY), surpassing analysts’ forecasts. This uptick in revenue, driven by a 20% increase in total fee revenue, signifies a rebound in loan origination activities.
Upstart’s market position, underpinned by AI-driven capabilities, sets it apart in a crowded fintech space. As the market begins to recognize the efficacy of AI in reducing risks and improving loan performance, Upstart is well-placed to capture a larger share of the market.
SentinelOne (S)
SentinelOne (NYSE:S) is carving out a significant niche in the cybersecurity landscape. Specializing in AI-powered endpoint security, the company stands out in a sector that is becoming increasingly vital.
The company’s platform, SentinelOne Singularity, epitomizes innovation in the cybersecurity space. Singularity integrates AI to automate and streamline threat detection and response. This platform not only enhances the effectiveness of security protocols but also significantly reduces the workload on human security teams, allowing for more efficient resource allocation.
Although the company is fairly young, SentinelOne has been recognized alongside major players in Gartner’s Magic Quadrant. This recognition underscores SentinelOne’s technological parity with its competitors, offering cutting-edge solutions that effectively secure digital assets against cyber threats.
SentinelOne has strategically expanded its capabilities through acquisitions, such as Scalyr and Attivo Networks. These acquisitions not only enhance the company’s product suite but also fortify its position in a competitive market, ensuring it stays ahead of technological and operational curves.
Lemonade (LMND)
Lemonade (NYSE:LMND) stands out in the insurance industry by leveraging advanced AI and machine learning models to streamline operations and offer competitive pricing. Unlike traditional insurers, Lemonade targets a tech-savvy, younger demographic with products including renters, homeowners, car, pet and term life insurance.
Despite the historical losses, Lemonade’s gross earned premium has nearly doubled in the recent past, showcasing robust growth in its customer base and market reach. The company’s shift towards more sustainable growth is evident in its conservative approach to policy issuance, focusing on profitability over volume.
The company reported its Q2 2024 earnings recently, surpassing expectations with an EPS of minus 81 cents. Lemonade posted a revenue of $122 million, marking a 16.63% increase from the same period last year and beating forecasts by $616.67K.
Moreover, Lemonade’s market valuation suggests potential undervaluation. With a forward P/E ratio significantly below the industry average, the company might be positioned for a rebound as it continues to expand its market presence. This makes LMND one of the AI stocks to watch over the next few months.
On the date of publication, Mohammed Saqib 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.
On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.