You don't have to invest a fortune in order to generate stellar returns over the long term. If you have your financial bases covered and $1,000 comfortably available to invest, taking a buy-and-hold approach with the right stocks could turn that principal amount into a life-changing sum.
Consider that Amazon first crossed the $50 billion valuation threshold in 2009. Today, the company has a market capitalization of approximately $1.2 trillion. That means $1,000 invested in the stock on that landmark day back in 2009 would now be worth roughly $24,000.
For an even more explosive example, take a look at Nvidia's stock trajectory over the last decade.
The graphics-processing leader's share price soared more than 8,280% over the last 10 years -- enough to turn a $1,000 initial investment into more than $82,800.
Finding companies capable of generating these levels of returns is no easy task, but focusing on businesses that are facilitating and benefiting from massive industry shifts is a great starting point. With the artificial intelligence (AI) revolution heating up rapidly and still in the early stages of unfolding, investors could have opportunities to score incredible wins with this transformative technology trend.
If you're on the hunt for stocks that can help you capitalize on the AI trend, read on for a look at one clear-cut category leader that stands out as a brilliant investment right now.
This tech leader is fighting the dark sides of AI
For all its potential promises, the rise of artificial intelligence is a scary thing. AI advancements are on track to radically reshape human life. They could create new sources of prosperity and even save countless lives, but bad actors will also inevitably utilize the tech for nefarious purposes. An arms race is escalating in cyberspace. Without a doubt, it's going to change the world.
Thankfully, CrowdStrike (CRWD 2.20%) is ahead of the rapidly accelerating AI curve -- and its cybersecurity tech is preventing cyber criminals from wreaking havoc. Launched in 2013, the company's Falcon platform was built around machine learning and AI technologies, and it will continue to play a key role in protecting against cyberattacks.
CrowdStrike's tech helps ensure that computers, mobile devices, servers, and other hardware can't be used by bad actors to breach networks. Its Falcon platform learns and adapts to each threat it encounters, providing customers with an evolving network of protections.
But despite fantastic business performance and a very promising long-term demand outlook, CrowdStrike stock stumbled due to macroeconomic pressures that spurred broad-based sell-offs for growth stocks. With the company's share price down 51% from its high, now looks like a great time to build a long-term position in this cybersecurity leader.
CrowdStrike is a strong business demonstrating resilience
As cyberattacks mounted, CrowdStrike's revenue soared 54% to hit $2.24 billion in its last fiscal year (ended Jan. 31). Meanwhile, the company's non-GAAP (adjusted) earnings rose 130% to reach $1.54 per share.
Even with macroeconomic headwinds creating a less favorable growth environment in fiscal 2024 (now underway), management expects revenue to increase roughly 34% annually and adjusted earnings to rise approximately 49%. There's admittedly some deceleration happening here, but the company's services are mission-critical for its public and private sector customers, and the business is showing resilience in the face of macro challenges.
CrowdStrike has huge growth on the horizon and an evolving AI edge
The Falcon platform already provides best-in-class defenses for networked hardware, and its performance edge could become even more pronounced with time. As Falcon attracts new customers and encounters a wider range of threats, its AI-powered systems will evolve to provide more advanced and comprehensive protections. In turn, CrowdStrike's platform should become increasingly attractive to prospective clients, opening the door for even more threat-data collection.
There's an incredibly promising network effect at play here. But the cybersecurity leader isn't resting on its laurels.
Image source: CrowdStrike.
Based on guidance for roughly $3 billion in sales this year, CrowdStrike is on track to capture just 4% of its $76 billion total addressable market (TAM). The company is already outpacing the growth of its market and gaining share, and it looks like some major developments could supercharge the business over the next few years.
Through organic growth for existing services, new product launches and initiatives, and emerging cloud-security opportunities, CrowdStrike expects its TAM will explode to $158 billion in 2026. Amid today's rising tide of cybersecurity threats, there are good reasons to believe its addressable market will expand at a healthy clip from there.
You couldn't ask for more in a leader
In addition to its strong market position and tech advantages, CrowdStrike also has great leadership at the helm. Beyond his proven skills as a manager, founder and CEO George Kurtz has decades of experience in the cybersecurity industry and actually co-wrote one of the most influential books in the field. Kurtz's Hacking Exposed: Network Security Secrets and Solutions stands as the all-time best-selling cybersecurity book. It wouldn't be an exaggeration to say that CrowdStrike's CEO wrote the book on this stuff.
Kurtz's visionary leadership and deep industry expertise are key assets as the business navigates its next growth stages. He's also the company's largest shareholder, controlling 21% of total voting power, and this high level of skin in the game means the CEO has plenty of incentive to deliver wins for shareholders at large.
CrowdStrike is a great AI play for growth investors
Valued at roughly $34 billion, CrowdStrike is already in large-cap territory, but we're likely still in the early chapters of its long-term growth story. While the company trades at approximately 62.5 times this year's expected earnings and could face volatility due to its growth-dependent valuation, I think the passage of time will show that the stock was actually quite cheap at today's prices. I purchased shares prior to the publication of this article, and I have high conviction that CrowdStrike will go on to be a big winner for long-term shareholders.
