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With so many different companies laying claim to the artificial intelligence (AI) moniker lately, it can be difficult to determine which AI offerings are worth investing in. Companies can be defined as AI stocks doing anything from providing hardware for cloud infrastructure to training large language models using machine learning to analyze data. To narrow it down, this article will focus exclusively on AI software stocks to buy.
For companies like these, the value lies in the relative capabilities of their software products. Since these companies do not produce goods, they rely on the effectiveness of their intellectual property to generate subscriptions or sales. These types of companies can provide investors with a safe entry into the speculative nature of artificial intelligence. Mainly because their software serves as an ancillary revenue support rather than a sole offering. These three shopping AI software stocks are growing their customer base thanks to the reliability and added value their products provide.
Datadog (DDOG)
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Focusing on cloud-based monitoring and analytics platforms has proven successful for Datadog (NASDAQ:DOG) in recent years. Offering visibility for information technology (IT) infrastructure performance, Datadog’s proprietary cloud software is gaining popularity. That’s because the company supports developers’ efforts to pinpoint software bugs and monitor user experience.
Furthermore, the company’s cloud-based approach to its software-as-a-service offering has allowed it to more effectively integrate artificial intelligence into its products. His latest AI project, Bits AI, is a direct tool to support developers who want real-time queries and summaries of code and datasets.
What makes DDOG even more attractive is its strong growth, with the addition of 79 additional customers paying more than $1 million annually. The company also reported a 27% year-over-year increase in revenue to $2.13 billion. Datadog might get less publicity, but its strong growth and direct AI applications make it a buy right now.
Fortinet (FTNT)
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Fortinet (NASDAQ:FTNT) develops and sells various security solutions and software to protect companies and organizations from cyber threats. The company has made firewalls its core product line, offering users the first line of defense against hacking and ransomware.
In terms of artificial intelligence, Fortinet offers a service called FortiAI. This deep learning solution is designed to optimize cyber attack investigation. By shortening investigation times, Fortinet claims its customers can speed up their responses to hacker threats by identifying them in real time and blocking them from corporate networks.
Moreover, the company’s solid performance in 2023 saw a 10% increase in revenue and an 8.5% increase in Fortinet services billings. Factor in the fact that FTNT is currently among the top cybersecurity providers out there, and you’ve got one of the best AI software stocks to buy.
Cisco Systems (CSCO)
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A leading player in the field of computer networks, Cisco Systems (NASDAQ:CSCO) has taken serious steps to continue growing. Chief among these exciting changes is Cisco’s new partnership with Nvidia (NASDAQ:NVDA), which has the potential to skyrocket the value of Cisco stock. With significant expertise in Ethernet networking, Cisco and Nvidia intend to integrate AI with highly secure Ethernet-based infrastructure.
Together, Cisco and Nvidia have been able to synergize Webex with AI-powered meetings and virtual desktop infrastructure. This exceptional commitment to functionality has seen Cisco’s revenue grow to $57 billion in 2023, representing 11% annual growth. The company also completed the acquisition of Splunk, further expanding its market offering and revenue streams into cybersecurity.
This merger comes at the perfect time. As organizations continue to adopt artificial intelligence, they will look to Cisco’s ecosystem. Of all the AI software stocks to buy, Cisco could be the most promising if it capitalizes on aggressive growth.
On the date of publication, Viktor Zarev did not have (either directly or indirectly) positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to InvestorPlace.com Publication Guidelines.