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Artificial intelligence (AI) is rapidly transforming industries across the globe. As AI capabilities evolve and improve, tech companies can create more value while expanding into new markets.
Several companies stand to benefit significantly from the advancement of AI. While top tech giants like Nvidia (NVDA), Microsoft (MSFT), and AMD (AMD) are obvious choices, there are a few emerging tech companies that might also profit extensively in the long run from their AI investments.
#1. CrowdStrike Holdings
CrowdStrike Holdings (CRWD) has emerged as a market leader in the rapidly growing cybersecurity market. Unlike traditional cybersecurity companies, CrowdStrike's cloud-native platform, the Falcon Platform, uses AI, machine learning (ML), and data analytics to detect and mitigate threats in real-time.
Valued at $78.4 billion by market cap, shares of the cybersecurity company have rallied 29.6% year-to-date, compared to the S&P 500 Index's ($SPX) gain of 25.2%.
Total revenue for the second quarter of fiscal 2025 increased 32% year on year to $963.9 million. The company's subscription model led to annual recurring revenue (ARR) growth of 32%. Adjusted earnings soared 40.5% to $1.04 per share.
Analysts predict earnings growth of 17.7% in fiscal 2025 and 18.2% in fiscal 2026. CRWD is trading at 74 times forward earnings. For the time being, the company's rapid revenue and earnings growth warrants a higher valuation. The company's collaboration with tech titans such as Nvidia, Tata Consultancy Services, Amazon (AMZN), and others will help strengthen the Falcon platform's market position.
Furthermore, the global cybersecurity market is expected to reach $298.5 billion by 2028, growing at a CAGR of 9.4%. CrowdStrike, with its advanced AI-driven technology and strong market position, is poised to capitalize on this growth.
Wall Street analysts are bullish on CRWD stock, with an overall “strong buy” rating. Among the 43 analysts in coverage, 34 have rated it as a “strong buy,” three as a “moderate buy,” and seven maintain a “hold” rating. The stock is trading close to its average 12-month price target of $325.54, while the Street-high price estimate of $424, suggests more than 28% expected upside from current levels.
#2. Palantir Technologies
Palantir Technologies (PLTR) is a significant player in the software and data analytics markets. Its data analytics platforms, namely Gotham and Foundry, serve both government and commercial clients.
Valued at $124.3 billion by market cap, shares of this software firm have surged an eye-catching 234.9% YTD, crushing the broader market's gain, with recent upside driven by strong Q3 results.
In Q3 of 2024, revenue increased 30% from the previous year to $726 million, while adjusted EPS increased 43% to $0.10.
Palantir's government business remains its core, but the company has made a significant push into the commercial sector. Growth of 54% in U.S. commercial revenue and 40% growth in U.S. government revenue drove this performance. Strong adoption of its Artificial Intelligence Platform (AIP) enabled the company to secure 104 contracts in Q3 alone.
Looking ahead, Palantir's commercial expansion may allow it to reach new clients and industries, increasing its revenue base and decreasing its reliance on government spending.
Analysts predict 52.8% earnings growth in 2024, followed by 22.1% in 2025. Palantir's stock is expensive, trading at 119 times forward 2025 earnings and 33 times forward sales. However, investors appear to believe in the company's long-term potential, which has driven its stock performance this year.
Overall, analysts are neutral about PLTR stock, rating it a “hold” due to its lofty valuation. With the YTD surge, PLTR stock has surpassed its average 12-month price target of $30.29, and closed Thursday just 2% away from its newly raised Street-high price target of $57.
#3. MongoDB
MongoDB (MDB) is a leading provider of modern database solutions, best known for its open-source, document-driven database. MongoDB's flagship product is MongoDB Atlas, a fully managed cloud database service that allows businesses to deploy MongoDB on major cloud providers such as Amazon Web Services (AWS), Microsoft Azure, and Alphabet's (GOOGL) Google Cloud. Other notable offerings include MongoDB Stitch, MongoDB Compass, and MongoDB Realm, among others.
Valued at $20.7 billion by market cap, shares of MongoDB have fallen 28% in 2024, lagging the overall market. However, this presents a buying opportunity, as Wall Street sees more upside in store.
In the second quarter of fiscal 2025, total revenue increased 13% to $478.1 million, led by a 13% increase in subscription revenue. Adjusted earnings per share were $0.70, down from $0.93 the previous year. Its flagship product, MongoDB Atlas, contributed 71% of total revenue, up 27% year on year.
The company ended the second quarter with $2.3 billion in cash, cash equivalents, short-term investments, and restricted cash.
At the midpoint, management expects fiscal 2025 revenue of $1.925 billion and adjusted EPS of $2.40, compared to $1.68 billion and $3.33 in fiscal 2024. Analysts predict that the company's revenue will rise by 14.6% and 17.6% over the next two fiscal years. In fiscal 2026, the company could report a $3.16 profit. MDB stock is trading at nine times forward sales, a discount from its five-year historical average of 20.8x.
Wall Street analysts are bullish on MDB, with an overall “strong buy” rating. Among the 31 analysts covering the stock, 22 have rated it as a “strong buy,” three as a “moderate buy,” five maintain a “hold” rating, and one suggests a “strong sell.” Its average 12-month price target of $337.85 implies an upside potential of 14.9%. Plus, the high price estimate of $440 suggests nearly 49.6% expected upside from current levels.
A team of Goldman analysts led by Ryan Hammond believes "platform" stocks like MongoDB and Snowflake will be the "primary beneficiaries of the next wave of generative AI investments."
#4. Snowflake
Snowflake (SNOW) offers a cloud-native data platform that allows businesses to seamlessly store, analyze, and share data across multiple clouds.
Valued at $40.7 billion by market cap, shares of Snowflake have fallen 37.9% this year, widely trailing the tech-led Nasdaq Composite’s ($NASX) gain of 28.4%.
Snowflake has shown strong customer confidence in its products, as evidenced by its net retention rate of 127% in the second quarter of fiscal 2025. Product revenue increased 30% year on year to $829.3 million. Snowflake's business model is based on usage-based billing, which means that revenue streams are relatively predictable. The remaining performance obligations, or RPO (contracted revenue to be realized in the future), increased by 48% to $5.2 billion in the second quarter.
The company has not yet achieved consistent profitability, and its Q2 net loss stood at $0.95 per share. Analysts predict that Snowflake's fiscal 2025 losses will be around $0.60, with profits of $0.92 by fiscal 2026. Revenue is expected to rise by 25.8% and 23.4% in fiscal years 2025 and 2026, respectively. SNOW, trading at nine times forward sales, is a reasonable AI stock to buy right now.
Overall, analysts are moderately bullish about SNOW stock. Among the 41 analysts in coverage, 24 have rated it as a “strong buy,” three as a “moderate buy,” 12 maintain a “hold” rating, and two suggest a “strong sell.” Its average 12-month price target of $170.25 implies an upside potential of 37.8%. Plus, the high price estimate of $220 suggests 78% expected upside from current levels.
