Artificial intelligence stocks are popular on Wall Street. Remember that stock value always counts. Even the greatest companies can't guarantee refunds at any price. With that in mind, some good equities are cheap today. Meta Platforms (NASDAQ: META), Salesforce (NYSE: CRM), and SentinelOne are examples.
1. Meta-platforms Meta Platforms leverages AI to make more money from the approximately 4 billion users who use its apps monthly. Brands may now use AI to improve ad targeting. Meta is worth nearly a trillion dollars on Facebook, Instagram, and WhatsApp, but Threads is slowly becoming the next social media giant.
Threads, which competes with Elon Musk's X (previously Twitter), has over 130 million monthly active users, according to CEO Mark Zuckerberg during the company's fourth-quarter earnings call. Meta is focused on user growth, hence Threads is little monetized. A corporation that has turned social networks into cash cows should be encouraged by this momentum.
Meta is a steal even without knowing how Threads will affect the business. Despite an 18-month rally, shares trade at a forward P/E of 24. The stock may be a bargain because analysts predict the company to expand earnings by 19% to 20% annually over the next three to five years. Meta Platforms is unmatched in social media.
2. Salesforce Salesforce is in the heart of the massive enterprise software sector. The company was founded on customer relationship management software but now covers almost every business need. Salesforce offers Tableau data and Slack communication solutions after bolt-on acquisitions.
Salesforce augments their business with AI. Salesforce uses Einstein, a generative AI, to improve its products. Like having a digital assistant. This proprietary AI enables Salesforce users answer inquiries, understand and forecast customer behavior, and produce content across all software.
Salesforce is trading well financially. Analysts expect earnings growth of about 18% over the next few years, supporting the stock's 31 times 2024 earnings. A decent PEG ratio is 1.8. If shares fall, investors can nibble on this blue chip technology stock and get more aggressive.
3. SentinelOne Other AI-based firms include SentinelOne. SentinelOne uses AI to detect viruses and other dangers on devices and networks. SentinelOne must stay ahead in cybersecurity, which is competitive. The company has been recognized by Gartner for its protection.
SentinelOne is criticized for losing money. Over the past year, its quarterly cash burn has dropped from $32 million to $10 million, indicating free-cash-flow generation. SentinelOne has no debt and $925 million cash: a clean balance sheet. When cash runs low, the company should be profitable.
Lack of profitability has discounted shares. CrowdStrike Holdings, SentinelOne's main competitor, has twice the P/S. That's accurate today, but long-term investors who think SentinelOne may develop and profit may enjoy buying shares cheaply. Today's P/S ratio is 9, down from nearly 100 when the stock went public.
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