"The development of AI is as fundamental as the creation of the microprocessor, the personal computer, the Internet, and the mobile phone."
-- Microsoft co-founder Bill Gates
Once a decade or so, a new technology comes along that reshapes the world in which we live. Artificial intelligence (AI) has the potential to be that new technology. AI is already beginning to change the way people work and play. It's predicted that this revolutionary technology will disrupt trillion-dollar industries and create entirely new ones.
Investors who can identify the companies best positioned to profit from this megatrend stand to earn a fortune. To help you stake your claim, here are three stocks that could soar in the coming era of AI.
1. Adobe
As recently as a few months ago, analysts viewed generative AI as a serious threat to Adobe's (ADBE 0.87%) business. But after the creative software provider unveiled some intriguing AI-fueled products and services, more investors started to see the cutting-edge technology as a potentially powerful driver of new growth for the company.
In March, Adobe launched Firefly, a suite of generative AI tools designed to enable users of all skill levels to produce high-quality images quickly and easily via text prompts. Adobe is integrating the tech into its popular Photoshop software, so customers can use these new AI features within their existing workflows. Notably, Adobe will train its AI model on licensed or public-domain images to be safe for commercial use.
Adobe also strengthened its partnership with semiconductor giant Nvidia. The two companies will work together to develop a new generation of advanced generative AI models geared toward the creator economy. Adobe intends to make the models accessible through Photoshop and several of its other products and services.
These new AI upgrades could broaden Adobe's customer base, boost its client retention rates, and allow it to charge higher prices for its offerings. All of this should help to drive the software leader's sales and profits higher in the coming years.
2. Salesforce
Like Adobe, Salesforce (CRM 0.42%) wants to be a player in the booming artificial intelligence market. The cloud software titan wants to help its corporate clients better connect with their customers via a combination of AI, data analytics, and relationship management solutions.
Just days ago, Salesforce introduced its AI Cloud, a suite of generative AI tools geared toward the enterprise market. Salesforce wants to serve as a centralized dashboard from which its customers can access nearly all their AI services. AI cloud will integrate with the company's popular offerings, including data visualization software Tableau, automation platform MuleSoft, and messaging network Slack.
AI Cloud will also offer access to a host of AI models, including those developed by Salesforce, Amazon, and tech start-ups Anthropic and Cohere, among others. Importantly, AI Cloud is designed to enable companies to access the enormous benefits of generative AI while satisfying their data privacy, cybersecurity, and regulatory requirements.
Additionally, Salesforce boosted its AI-focused venture fund to $500 million. The fund could help the cloud giant get a head start in identifying promising AI investments, as well as potential takeover targets to fuel its growth-through-acquisition strategy.
3. CrowdStrike
Although AI promises a wide array of potential benefits, it also poses some serious risks. For example, the technology could be used by hackers to conduct more advanced cyberattacks. Fortunately, CrowdStrike (CRWD 2.03%) excels at helping companies and government agencies protect their increasingly vital cloud networks.
CrowdStrike uses AI to bolster its ability to predict, detect, and defend against threats. It recently debuted Charlotte AI, an innovative cybersecurity tool that combines generative AI with human feedback to provide advanced threat protection, faster incident response times, and automated remediation. CrowdStrike is working with Amazon Web Services to accelerate the development of Charlotte AI and other AI-powered cloud security applications.
In turn, customers are flocking to CrowdStrike's cloud security platform. The cyber protection specialist's client base soared by 41% to over 23,000 in its 2023 fiscal year, which ended on Jan. 31.
Moreover, each new customer who joins the cyber guardian's network increases its data collection capabilities -- and makes its AI smarter. Every new user thus makes CrowdStrike's network more valuable to all other users. These beneficial network effects should continue to fuel the cybersecurity leader's growth.
Increasingly sophisticated cyberattacks are boosting demand for digital defenses that can thwart them. The global cybersecurity market is forecast to exceed $130 billion by the end of the decade, up from less than $15 billion in 2022, according to Acumen Research. With roughly $2.4 billion in trailing-12-month revenue, CrowdStrike has a long runway for expansion still ahead.
