If you thought 2023 was an exciting year for artificial intelligence (AI), wait until you see what 2024 has to offer. Although the AI revolution was unofficially kicked off in late 2022 when ChatGPT rose to fame, 2023 saw many incredible releases by some of the biggest tech names in the industry.

2024 will surely bring more of the same, as many of these products are starting to be launched to broader, business-focused audiences. The top two names I'm watching in this space in 2024 are Nvidia (NVDA 3.14%) and Microsoft (MSFT 1.28%). Both stocks have been exciting in 2023, and it won't surprise me if 2024 is just as good.

1. Nvidia

Nvidia has been the undisputed king of the AI movement, as its graphics processing units (GPUs) are the bedrock for the computers that create AI models. Customers use thousands of these units tied together to create the computing power necessary to crunch mounds of data for AI models.

The company has seen unprecedented growth, with its second quarter of fiscal year 2024 (ending July 30) revenue rising 101% year over year to $13.5 billion. Q3 looks like more of the same, with revenue projected to be about $16 billion, indicating growth of around 170%.

The question is, how long can Nvidia sustain this growth? The overall demand for these GPUs is unknown, as once customers build out their AI data centers, they may not need to purchase more GPUs from Nvidia for some time. While it's a valid question, Wall Street analysts think this won't happen for Nvidia in FY 2025 (ending January 2025). Analysts expect revenue growth of 51% next year, as they project Nvidia's revenue will increase from $52 billion in FY 2024 to $78 billion the next year.

This growth is critical, as Nvidia's stock fetches a premium valuation.

NVDA PE Ratio Chart

NVDA PE Ratio data by YCharts

With the stock trading at 110 times trailing earnings, yet 42 times forward earnings, it conveys to investors that there is massive earnings growth ahead. But, if something happens and Nvidia can't deliver on that growth, the stock will be heavily sold off.

While I'm not saying Nvidia can't reach next year's projections, I am saying it may be hard to sustain those sales. 2024 will be an interesting year for Nvidia, and I'm excited to watch and see if it can deliver on these lofty expectations.

2. Microsoft

Microsoft is another company that has found itself at the center of the AI revolution. Through its cloud computing offering, Azure, it's being heavily utilized as clients look for places to store information and run various AI workloads. It's also expanding its Copilot product beyond its coder-focused GitHub application. Copilot will now be available for the standard Microsoft Office products for $30 per month.

At this price point, not everyone will be able to afford it. But, if the ones who adopt it see incredible efficiency gains, the $30 monthly price tag may be worth it. This would be a substantial boost for Microsoft and further cement its place at the top of the AI leaderboard.

2024 should reveal how well its Copilot rollout is going and how it's faring in the cloud computing battle for supremacy. Microsoft doesn't have the same valuation concerns as Nvidia, so the stock is much less risky. Of the two, it seems like a better buy today, but it doesn't have the same upside as Nvidia if it hits some lofty analyst projections.

Either way, both of these two are worth keeping tabs on in 2024 regardless of whether you're a shareholder or not.