Artificial intelligence dominates tech stock news. AI news appears ubiquitous, and practically every company is striving to show shareholders how it is using AI to benefit business. AI may be in the hype cycle, but it appears to be here to stay and could alter society. As an investor, you must distinguish between real and fake AI startups. Two AI-boosted tech stocks are worth buying today and holding for the long run.
1. ASML ASML (NASDAQ: ASML) may be the most important company you've never heard of because it makes semiconductors. ASML makes semiconductor lithography machines in the Netherlands. ASML is the only firm that makes and sells ultra-accurate extreme ultraviolet lithography (EUV) machines for advanced chips.
When you read about firms buying and inventing more AI chips, the fabrication facilities making them use ASML machines, therefore this spike in chip demand is good for ASML. Demand is so high that the corporation has a $42 billion order backlog. Despite the chip industry's cyclical downturn, this helps the corporation maintain revenue.
As society digitizes and AI massive language models are developed, semiconductor demand will rise. The drive to nearshore U.S. semiconductor manufacturing should also spur additional fabrication facilities. All this entail new lithography machines and more ASML business.
2. CrowdStrike As the first cloud-native AI-driven cybersecurity startup, CrowdStrike (NASDAQ: CRWD) made waves before Wall Street noticed. CrowdStrike stands apart from its competitors in two ways. First, it was created for the cloud, providing it an advantage over older systems that had to adapt to cloud computing. Second, AI was employed from the start to detect dangers and protect clients.
CrowdStrike's Falcon software checks trillions of data points for security breaches using AI. To safeguard all CrowdStrike customers, the system learns and shares threats from across its client base.
The company has grown its client base and got existing consumers to spend more due to this tremendous network effect. In fiscal 2024 (the year ending December 2023), CrowdStrike increased the number of sales with eight-module buyers. Nearly two-thirds of clients use five or more modules. CrowdStrike's products are clearly valuable to customers.
For a long, CrowdStrike has had positive cash flow, but it only recently reached GAAP profitability. Fiscal 2024 changed the bottom line. In 2024, operational income rose 86%, earnings per share rose 101%, and free cash flow rose 39% compared to 2023.
Pioneering AI There will be many AI investment options in the future. Chip firms and mega-tech corporations establishing massive language models and developing next-generation AI applications make news. ASML and CrowdStrike give investors strong, industry-leading companies with credible AI linkages. Both companies are good buys without AI tailwinds, but they will gain in 2024 and beyond.
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