AI And Technology Companies Are Expected To Soar In 2024. Which Companies Should Investors Be Looking At?

For much of the year, Wall Street investors have shrugged off their losses, loading up with technology and artificial intelligence (AI) stocks instead. Now, with the year coming to a close, and prospects for the year ahead looking brighter than ever for the technology sector, investors remain captivated by the potential this transformative technology can have for the wider market and economy.

The generous flow of capital investment technology companies have received during the year, and perhaps over the last decade, has allowed many of them to fast-track their developments in an attempt to lead the race for innovation.

Already, artificial intelligence has helped to set the tone for next year, with experts now predicting a bumper year for AI and technology stock – but analysts are saying that Wall Street is still sleeping on the monumental opportunity AI could bring in the coming months.

Following a note by Wedbush strategists, analysts are forecasting that tech stocks could soar about 20% in 2024, with the market being led by big tech companies and a wave of AI spending. In an interview, managing director and equity researcher at Wedbush, Dan Ives said that he forecasts technology stocks to see surging performance next year, as more companies are now starting to ramp up resources for AI and cloud technology development.

Already this year, technology stocks have managed to come out of the stock market unscathed, as inflation and high-interest rates left investors to retreat and park their cash in less risky investment options.

A Bumper Year For The Technology Sector

While there were some hiccups during the early months of the year, with some big tech companies slashing back their employee count, and hoping to stabilize their balance sheets, both investors and fund managers have widened their intake of technology stocks as the stock market managed to cut its losses.

Reuters reported that some of the most watched management funds on Wall Street have gone to raise their intake of various big tech stocks. In one report, Tiger Global Management, an investment fund, increased its holdings of companies such as Nvidia (NASDAQ:NVDA); Alphabet (NASDAQ:GOOGL); Microsoft (NASDAQ:MSFT), and Meta Platforms (NASDAQ:META).

Following recent filings, the firm has further increased its holdings in Amazon (NASDAQ:AMZN) by 6.5%. This year already, AMZN has climbed by 68.40% year-to-date, while META is up 154%; MSFT 53%; GOOGL 45%, and Wall Street sweetheart, NVDA rose 217%.

Despite the challenges, the information technology and communication services segment of the S&P 500 managed to gain nearly 50% year-to-date, according to data compiled by U.S. Bank.

The tech-heavy Nasdaq-100 tech index experienced similar gains, climbing 47% this year, and has since started approaching an all-time high, which investors are hoping would send the index shattering the glass ceiling by the early weeks of 2024.

All of this excitement has put industry experts into overdrive, with some now projecting that applications of generative AI technology could add the equivalent of $2.6 trillion to $4.4 trillion to the global economy annually, according to consulting firm McKinsey & Company.

For comparison, the United Kingdom’s total Gross Domestic Product, or GDP was roughly $3.1 trillion in 2021.

Sectors such as banking, finance, and advanced technology could see the most significant financial boost, with McKinsey analysts projecting generative AI technology and AI-related products to add an additional $200 billion to $340 billion annually if the necessary technological and digital tools were to be implemented.

All the while, as consumer and commercial utilization of generative AI technology, and perhaps more importantly, AI-powered tools are taking off at full speed – investors are hoping to ride the wave, but lackluster support from Wall Street could slow the wider potential of these tools and the adoption thereof within the global economy.

AI and Technology Stocks To Watch In 2024

While accurately predicting which companies could experience a blowout year in 2024, investors are most likely sticking to their guns, and further loading up on some of their favorite technology stocks before the new year begins to settle in.

Although the amalgamation of AI and technology stock to choose from provides a seemingly endless amount of potential, looking at some variables, including market performance, growth, and technological innovation could help paint a better picture for investors and help them navigate which stocks could have a soaring year of performance in 2024.

Apple

For quite some time now, Apple (NASDAQ:AAPL), the maker of the iPhone, iPad, and Mac Computer has been steadily turning its attention towards artificial intelligence, hoping to quietly win over market share and gain investor confidence as it continues to leverage newer and more advanced technology in its products.

Although the company has been secretive regarding its developments in the AI ecosystem, recent reports have indicated that the company has released a machine learning framework, better known as MLX.

The framework will help Apply navigate the seemingly complex ecosystem of artificial intelligence, and enable them to develop more efficient and flexible machine learning on Apple devices and products.

For the fourth quarter, the company posted $89.5 billion in quarterly revenue, roughly 1% down year over year. However, the company posted earnings of $1.43 per diluted share, an increase of nearly 13% year over year.

While strong sales, and new product releases, such as their iPhone 15 helped boost their fourth-quarter performance, steady investment in AI applications could help give them a significant edge over other competitors.

C3.ai

For a pure AI player, C3.ai (NYSE:AI) holds a firm position in the sector, with close relationships to some of the biggest names in the oil and gas, cloud storage, and defense sectors. Following their somewhat mixed second-quarter results, CEO Tom Siebel shared that their defense business arm is rapidly expanding due to heavy investment capital flowing from federally-funded defense projects.

The company holds a robust product portfolio, developing advanced technological software used for customer relationship management (CRM), environmental, social, and governance (ESG), product and supply chain optimization, and AI-powered forecasting models.

This is however only the tip of the iceberg, as the company has its fingers in nearly every sector, including banking and finance, state and local governance, and sustainability management.

Though their second-quarter financial results were less exciting than what many analysts and investors expected it to be, C3.ai posted $73.2 million in Q2 2023 revenues, an increase of 17%.

However, the company fell short on earnings per share, with AI stocks losing $0.13 per share on adjusted losses, after losing $0.11 per share earlier in the year, according to reports by Investor’s Business Daily.

On the stock market, shares shed some weight after the mixed financial results, however, in the long term, AI stocks have climbed 172% this year, and investors are positive that the company could soon see the tides begin to change as it aims to turn a profit in the next year.

Nvidia

This year, Wall Street simply couldn’t get enough of Nvidia (NASDAQ:NVDA) and many investors stunned the market, as they rallied NVDA stocks on the back of the company increasing its footprint in the AI sector due to growing demand and development for advanced computer processing chips.

While the company is predominantly known for the development of integrated circuits, including high-end graphics processing units (GPUs), the Santa Clara-based company has now gone further into manufacturing chips and integrated units that will likely help power the next generation of artificial intelligence.

Latest Q3 2024 reports, showed that the company had another record-breaking quarter, with revenues of $18.12 billion for the quarter, up 34% quarter over quarter, and up 206% year over year.

Company founder and CEO, Jensen Huang said during the earnings call that industry-wide AI transition has seen them experience tremendous growth and helped accelerate their development of computing and generative AI products and services.

Investors who started 2023 with NVDA shares have already witnessed their holdings grow 217% through November. Overall, shares have been trading steadily above highs from last year and are expected to continue this trajectory in 2024.

Symbiotic

Soon to become a well-known name on Wall Street, Symbiotic (NASDAQ:SYM) is a powerhouse of opportunity for investors that have a bit of spare change, seeing as stocks are relatively cheap trading at a year range of $10.21 – $64.14 per share.

Although from the outside Symbiotic looks more like a robotics company, a deeper look shows that the company has been heavily investing in the transformative qualities of artificial intelligence in most of its services.

The company provides automated warehouse systems and powers all its systems with artificial intelligence software. Their clients aren’t small names either, as Symbiotic has already partnered with industry big leagues such as Walmart (NYSE:WMT), Target (NYSE:TGT), Albertsons (NYSE:ACI), and Giant Tiger, to name a few.

Both revenue and net income were on the positive side during the most recent quarterly earnings postings. Revenue rose by more than 60% year over year to $391.89 million, while total net income was up 23.83% year over year to $112.71 million.

SYM stocks have been riding the AI craze, shares are already up 312% year to date, and the company is positive that the coming year will bring increased business opportunity, with Symbiotic services moving roughly 1.6 billion cases of goods annually.

Microsoft

Microsoft (NASDAQ:MSFT) is one of those companies that have remained on the cusp of innovation and change for decades, and now they’re doing it again, bringing wide-scale AI adoption into their forward-looking business strategy.

The last few months have been nothing but exciting for the company, with the introduction of major AI-powered tools and software systems. While Microsoft started off with projects such as Microsoft Cloud and Azure Space, this was perhaps only the stepping stone for the company.

Now the company is forging ahead, bringing onboard major applications including Copilot, a fully integrated AI software system that powers services such as Bing’s latest upgrade, DALL.E 3.

Other projects include Microsoft 365 Copilot, which now features Microsoft 365 Chat and a new AI assistant. Collaboration with the developers at OpenAI will perhaps help Microsoft become a fully-fledged AI company by the end of the decade, as it remains a steadfast, and reliable name in the technology sector.

While the year wasn’t without challenges, and a few mistakes that the company has since rectified, stocks remained steady, with MSFT climbing 53% year to date. Meanwhile, revenue was up 12.76% year over year to more than $56.52 billion, and the company reported a 27.23% increase in earnings per share.

Opera

The multi-platform service provider and software company, Opera (NASDAQ:OPRA) has operated this year under the radar, and investors are now beginning to take note of how the company is leveraging artificial intelligence integration within some of its biggest, and most widely used services.

Although the company is more known for operating one of the biggest browsing platforms in the world, seeing roughly 311 million active monthly users, new opportunities in AI searching have enabled them to leverage more advanced technologies to help give them a leg up in the race for innovation.

The company has gone on to introduce Aria, Opera’s proprietary AI browser, which uses voice and speech recognition technology to provide more seamless search results. Furthermore, the company has partnered Aria with OpenAI’s ChatGPT platform, which enables users to obtain search results faster and more effectively.

Yet, this is only scratching the surface of what Opera has been working on this year. Other leading products include Opera GameMaker, a game development environment, which allows users to generate game content, which is compatible with other platforms such as Windows, Mac, Linux, iOS, HTML5, Xbox, PlayStation, and Nintendo Switch, to name a few. 

The company has also given their Opera News and Opera News Lite platforms a much-needed upgrade, invested in developing a more user-friendly Opera MiniPlay platform, and further upgraded Opera Cashback, Opera VPN Pro, and further invested in Loomi by Opera, a platform similar to the likes of Netflix and Youtube, only powered by Opera systems.

It was indeed a stellar year for the company, with the company reporting $102.64 million in Q3 2023 revenue which represented a 20.26% year-over-year increase. Net income for the same quarter was up by 79.41% year over year to more than $16.83 million, while OPRA shares 83.50% year to date.

Still, stocks are trading at a day range of $11.00 – $11.29 per share, making OPRA cheap AI stock to hold, which provides much-needed diversification and product development for investors.

Looking towards next year

While there’s a lot of excitement on the books for next year, investors will continue to look towards artificial intelligence as the driver of the stock market. Yet, as experts might suspect, turning a blind eye to the potential that AI stocks can bring to investors’ portfolios could lead them to lose out on gaining tremendous momentum.

As the year begins to approach its end, investors will need to strategize how they will navigate 2024. Although next year doesn’t come without a high level of expected uncertainty and volatility, we’re only now perhaps entering the start of the race for innovation. In that case, investors will need to buckle up and get ready, because things are about to move at a rapid speed.

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(Featured image by Hitesh Choudhary via Unsplash)

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