Two AI-driven Investment Opportunities to Consider for 2024: UiPath and CrowdStrike

When considering where to invest in the realm of artificial intelligence (AI), there's merit in looking beyond companies solely dedicated to AI technology development. A more holistic strategy involves identifying enterprises that excel in incorporating AI into their existing product suite. Two companies stand out as industry exemplars: UiPath and CrowdStrike. These firms not only had a successful run in 2023 but also pose as attractive investments for the upcoming year and beyond, particularly when adopting a five-year investment horizon.

1. UiPath

Reshaping the landscape of automation, UiPath has made its mark by offering software that performs robotic process automation (RPA). RPA is instrumental in systematizing mundane processes such as completing forms, but UiPath's integration of AI into its platform elevates its capability to automate a broader spectrum of tasks. The company provides tools to help businesses identify processes ripe for automation, emphasizing the ease with which UiPath's solutions can be adopted.

The RPA market, though not vast at the moment, is on a trajectory of swift adoption. In fact, Polaris Market Research forecasts the RPA market to leap from $2.66 billion in 2022 to $66 billion by 2032, which represents a nearly 38% compound annual growth rate (CAGR). With its annual recurring revenue reaching $1.38 billion, a figure that saw a 24% increase in the third quarter of the fiscal year 2024, UiPath already commands a significant share of the RPA market—and it's poised for further expansion.

In light of this considerable market growth, UiPath emerges as a compelling investment choice. What's more, unlike many tech stocks, it isn't overvalued, suggesting the recent uptick in its stock price is just the beginning of a promising upward trend.

2. CrowdStrike

CrowdStrike, an authority in cybersecurity, has ingrained AI into its foundation from the outset. Its leading solution revolves around endpoint protection, securing devices like laptops and smartphones against unauthorized access. Utilizing an AI model, CrowdStrike can distinguish between regular device usage and potential cyber threats, autonomously neutralizing these attacks without the need for human intervention.

Beyond endpoint protection, CrowdStrike offers an impressive suite of additional services, with a significant percentage of its clientele utilising multiple products. This cross-sell potential hints at a deeper customer engagement and a commitment to scaling up their security infrastructure with CrowdStrike's offerings.

The market potential CrowdStrike addresses is extensive and projected to balloon from $100 billion in 2024 to $225 billion. With its annual recurring revenue surging 35% to $3.15 billion in the third quarter of the fiscal year 2024, the company is understandably considered an attractive long-term investment despite its high revenue multiples, which some investors may view as steep. However, given its consistent performance, the premium could well be justified.

Investors should note the encouraging prospects for UiPath and CrowdStrike, considering their comprehensive AI integration and robust market potential—making them two AI breakout stocks to keep on your radar for 2024 and the years that follow.

UiPath, CrowdStrike, investment