Three AI software stocks (Palantir Technologies, Microsoft, AppLovin) poised for growth in various industries.

From Nasdaq: 2025-01-09 06:42:00

The first wave of artificial intelligence led to significant revenue growth for companies like Nvidia. Now, the second wave is expected to come from AI software, with three stocks poised to benefit: Palantir Technologies, Microsoft, and AppLovin. Each company has unique strategies to capitalize on the growing demand for AI technology in various industries.

Palantir Technologies is focusing on becoming the AI operational system for organizations, leveraging AI workshops to attract commercial customers and drive revenue growth. Microsoft is seeing success with its AI Copilots in Azure and Microsoft 365, offering efficient tools for developers and workers. AppLovin’s AI-powered adtech solution, Axon-2, has transformed the company, leading to significant revenue growth and expanding gross margins.

While these companies have strong potential for growth in the AI software space, investors should consider the valuation of each stock. Palantir Technologies is trading at a high price-to-sales multiple, Microsoft is reasonably valued based on forward price-to-earnings, and AppLovin has a low price/earnings-to-growth ratio. As the demand for AI software continues to rise, these stocks could be well-positioned for further success in the future.



Read more at Nasdaq: 3 AI Software Stocks to Consider Buying