Artificial intelligence (AI) has already been implemented in nearly every industry in the United States, but the technology is still in its infancy. Contributions to the economy could increase significantly over the next decade, adding between $7 trillion and $200 trillion in output, depending on Wall Street forecasts.
Cybersecurity companies use AI to detect threats, automate incident response, and drive better outcomes. Meanwhile, semiconductor companies are designing the hardware developers need to be able to train and continuously improve AI models.
These two industries can be great places for investors to park their money and stocks. sentinel one (S -1.99%) and micron technology (MU -3.27%) is an excellent starting point. An investor with idle cash, money not needed for immediate expenses, allocates $120 to buy his one share (or more if he has free cash) in each company. , this is why you want to hold it for 10 years.
1. Sentinel One
SentinelOne is a provider of cybersecurity software with AI and automation at its core. The rise of cloud computing means more businesses are operating online, exposing them to attacks that can come from anywhere in the world at any time. Not every employee can become a cybersecurity expert, making automated threat detection and incident response increasingly important.
SentinelOne’s Singularity platform is a comprehensive cloud, endpoint, and identity solution for enterprises. It not only protects your entire cloud network, but also the computers and devices used by your employees. With so much external contact through email, phone calls, and messaging platforms, employees are often the most vulnerable part of an organization.
While AI is built into nearly every segment of the Singularity stack, SentinelOne released a new tool last year called Purple AI. It is a virtual assistant (chatbot) that integrates with Singularity to reduce alert fatigue for human security administrators.Report by palo alto networks According to research, 93% of security operations centers within enterprises still rely to some degree on human-driven processes, and 23% of security alerts go uninvestigated due to heavy workloads.
Purple AI can quickly analyze incidents and present the results to management teams, saving time from manual investigation efforts. Additionally, if a new threat emerges in the corporate world, Purple AI can scan specific assets or even the entire network for signs of its presence.
SentinelOne serves more than 11,500 businesses and generated $164 million in revenue for the most recent fiscal third quarter of 2024 (ending October 31, 2023), an increase of 42% year over year. Ta. This was a faster revenue growth rate than its competitors. cloud strike Palo Alto Networks (although SentinelOne is a much smaller provider).
As of this writing, Sentinel One stock is trading at $26.34, which is 65% below the all-time high it hit during the height of the 2021 tech frenzy. Investors were a little irrational at the time, as trillions of dollars in pandemic-era stimulus were coursing through the financial system. . The subsequent drop in SentinelOne stock created an opportunity.
The company expects sales for the full fiscal year 2024 (ending January 31) to reach a record high of $616 million, and expectations have increased further after strong third-quarter results. This puts the company’s stock at a price to sales (P/S) ratio of just 12.8x, cheaper than Palo Alto (16.3x) and nearly 50% cheaper than CrowdStrike (24.5x). This could be a long-term entry point for investors.
2. Micron Technology
Micron is the world’s leading manufacturer of memory (DRAM) and storage (NAND) chips for computers, mobile devices, automobiles, and data centers. It has received less attention from investors than other semiconductor giants such as . Nvidia and Advanced Micro Devices Because they produce the fascinating graphics processing units (GPUs) that are responsible for the development of AI. But Micron shouldn’t be ignored, as DRAM and NAND are important parts of its story.
Most AI models are developed, trained, and deployed in the cloud, and most cloud workloads are run through centralized data centers. Building AI models requires large amounts of data, and GPU chips provide the computing power needed to train models using that data. But GPUs require DRAM. DRAM determines the speed of data transmission and retrieval and has a significant impact on the performance of AI models.
Mid last year, Micron launched a new data center memory chip called HBM3E. It can train AI models 30% faster and process 50% more queries per day than competing hardware. Nvidia selected his HBM3E to drive his new H200 GPU. The H200 GPU will be widely released this year and is expected to dominate the industry. That could bring significant benefits to Micron.
But Micron is also bracing for a surge in demand outside the data center. Computers and devices will soon be able to process AI workloads on-device, making the technology woven into the entire user experience. apple has released a new iPhone 15 Pro with the A17 Pro chip, powerful enough to handle AI.Similarly, AMD’s Ryzen AI chips have been featured in his 50 different notebook computer designs, and the company has microsoft To develop new versions of Windows to take full advantage of its powerful hardware.
According to Micron, AI-powered computers require three to five times more memory than traditional ones, which should significantly increase the company’s revenue in the future.
Micron’s annual revenue fell 50% in fiscal 2023 (ending August 31) due to difficult economic conditions that weighed on consumer spending. However, an upswing became evident in the first quarter of fiscal 2024 (ending November 30). Micron’s total revenue increased 16% year-over-year, but its computing and networking division grew an impressive 45% quarter-over-quarter, thanks to demand for AI-related data center chips.
Micron CEO Sanjay Mehrotra expects improved financial performance through 2024 as the worst of the pricing and inventory issues that plagued the company in fiscal 2023 appear to be in the rearview mirror I predict that will happen. This could be a great time for investors to buy Micron stock, as it enters a potentially long-term rally driven by demand for AI.