3 Artificial Intelligence (AI) Stocks to Buy with $3,000 and Hold Forever

By | March 28, 2024

Artificial intelligence (AI) isn’t just a trendy technology that doesn’t live up to the hype, like 3D printing is. AI has been integrated into many products for years, but the mainstream audience is only now starting to catch on.

AI fundamentally changes the way we interact and work with each other. As a result, investors should be aware of many of the long-term winners in this space and position their portfolios accordingly.

So if you have $3,000 to invest (or whatever amount), consider splitting it between these stocks.

1. Metaplatforms

When looking for companies that buy and never sell, it is critical to find companies with a steady product or service that can pivot quickly to stay on top.

One such company is Metaplatforms (NASDAQ: META), the owner of social media platforms such as Facebook, Instagram, Threads, WhatsApp and Messenger. Meta uses AI in multiple ways, including the way we communicate with those who don’t speak the same language.

Social media products also benefit from AI on the business side, as it helps create ads that target individuals. In the long run, this will likely increase the cost per ad due to their efficiency, and Meta benefits from this increase. For example, Nicola Mendelsohn, head of Meta’s Global Business Group, stated that ads using AI saw a 32% increase in ad viewer spend. As Meta’s ads become more effective, it’s only a matter of time before costs start to rise

Finally, the Reality Labs division is working on its Ego model and glasses, which could help bring technology such as augmented reality, currently used for games or other leisure activities, to training tools, allowing users to learn a new skill.

Meta is at the forefront of AI, making it a fantastic stock to buy and hold. With the shares trading at 25.5 times forward earnings and posting 25% revenue growth, the company is operating at a high level and at a reasonable price.

2.Adobe

Adobe (NASDAQ: ADBE) has industry standard digital design products. But if Adobe wants to continue growing, it must adopt AI, and it already has.

The Firefly tool gives users the ability to create images using AI and can significantly reduce the cost and time required to create media. For example, IBM used Firefly to generate 200 campaign items with 1,000 moment variations instead of the months it would have taken to do them individually. These generated images were also quite successful: the ad campaign had 26 times higher engagement than the benchmark.

These types of success stories excite me as an investor because they demonstrate Adobe’s prowess in digital media.

Getting existing customers to add offerings like Firefly is a key part of Adobe’s investment thesis, as it already has a strong position in its target market. Without new products, the company would have to increase subscription prices every year to drive growth. While Firefly is a key part of this expansion, other products and features also played a role in Adobe’s 11% revenue growth in the first quarter of 2024 (ending March 1). Combined with the effects of the stock buyback, this would have allowed Adobe to grow its net income by 30% if not for the $1 billion cost of the acquisition breakup fee.

With AI already impacting the way media is created, it is critical to invest in a company like Adobe, which is at the forefront of this shift.

3. Snowflake

Snowflake (NYSE: SNOW) is vital to the development of AI models, because a huge amount of information is required to make these models accurate, and collecting and storing it can be problematic without the right tools.

Snowflake allows companies of all sizes to capture, store and use data through its data cloud platform. And if a company has a data set that it wants to sell to another company that is creating an AI model, it can do so on the Snowflake Marketplace.

So Snowflake is a major company in this space, and no matter how widely AI is adopted, the importance of having a way to collect and store data will never go away.

This makes Snowflake a great stock to buy and hold, as it will continue to grow for years with the constant need to collect and process information to feed models.

Snowflake’s recent results show just how strong the company is, with product revenue growing 33% to $738 million in the fourth quarter of 2024 (ended January 31). For fiscal year 2025, the company expects growth of 22%, indicating continued demand for its product. With the stock trading around its historically low price-to-sales valuation, this is a smart buy.

Buying now and holding for at least five years is a wise decision for all three of these companies. They have good long-term prospects, making them excellent long-term choices.

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Randi Zuckerberg, former director of market development and spokeswoman for Facebook and sister of Mark Zuckerberg, CEO of Meta Platforms, is a member of The Motley Fool’s board of directors. Keithen Drury holds positions at Adobe, Meta Platforms and Snowflake. The Motley Fool holds positions in and recommends Adobe, Meta Platforms, and Snowflake. The Motley Fool has a disclosure policy.

3 Artificial Intelligence (AI) Stocks to Buy with $3,000 and Hold Forever was originally published by The Motley Fool

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