Of all the artificial intelligence (AI) stocks on the market, few excite me more than CrowdStrike (CRWD 2.92%). Not only is AI at the heart of its cybersecurity solution, CrowdStrike's software has consistently proven to be best in class. While the stock has had a strong 2023 so far (it's up more than 55%), there's room for more gains as the company's valuation isn't terribly expensive.

Here's what has me most excited about CrowdStrike stock.

CrowdStrike's use of AI isn't just a sales pitch

CrowdStrike's cybersecurity platform is focused on protecting network endpoints, like cloud servers or laptops. It blocks attackers from gaining access to its clients' systems, which prevents harmful attacks that can lead to ransoms, damaged reputations, exposure of private data, and lost customers.

It uses a branch of AI known as machine learning to continuously update its software to improve the protection it provides its clients. Analyzing trillions of signals weekly, its system learns to recognize threat-like activity levels so it can shut down attacks before they can do serious damage.

While that's the primary service, CrowdStrike offers more than 20 different add-ons, making it nearly a one-stop shop for organizations' cybersecurity needs. In fact, 63% of its clients use five or more of its modules, and 24% use seven or more. Last year, those numbers were 59% and 20%, respectively, demonstrating that CrowdStrike continued to convince its customers to expand their spending with it despite a challenging economic backdrop.

The second quarter of its fiscal 2024 was another strong quarter, as annual recurring revenue rose 37% to $2.93 billion. It also generated strong free cash flow in the period (which ended July 31), producing $189 million -- a 26% margin. It also squeaked out a GAAP net income of $8.5 million, thanks to interest income on its cash holdings of $37 million.

Those figures show how close CrowdStrike is to consistently breaking even, and that management isn't sacrificing profitability for all-out growth. After the earnings report, CrowdStrike's stock popped more than 9%. But why do I think this is just the beginning? It all has to do with its market opportunity.

Trading at a more reasonable level than its tech peers

CrowdStrike estimates its current total addressable market is about $76 billion. However, with market expansions and the new offerings it's working on, its targeted addressable market is about $158 billion.

That's a significant expansion in its potential, and even without new products, CrowdStrike is still growing quite rapidly during a period when most customers are trying to control their expenses tightly. When those clients are able to free up more resources, one of the first things they'll look to upgrade will be their cybersecurity.

This all bodes well for CrowdStrike, yet the stock doesn't trade at an ultra-premium level.

CRWD PS Ratio Chart

CRWD PS Ratio data by YCharts.

While 15 times sales isn't cheap, it's a lot less than the ratios of around 20 times sales that some of its software peers are trading at. Its free cash flow ratio of 49 is similar -- a bit pricey, but not bad considering other peer stocks.

CrowdStrike's sensible valuation combined with its ability to execute and its expansion potential make this stock a no-brainer buy. Even though the stock price jumped just a few days ago thanks to a strong earnings report, the future is still bright, and investors shouldn't let that jump cause them to miss out on this opportunity to invest.