The artificial intelligence (AI) revolution rolls on. True, some of the AI stock stars like Nvidia have taken a breather recently as they consolidated their monster gains.
Yet below the surface, it's clear: AI isn't going anywhere, and there is still money to be made in the sector for investors with the courage -- and willpower -- to buy and hold.
Here are two AI stocks that I believe are flying under the radar.
Image source: Getty Images.
CrowdStrike
First up is CrowdStrike (CRWD -0.71%). The company, one of the leading providers of AI-powered cybersecurity, continues to deliver impressive results.
In its most recent quarter (ended Jan. 31), the company reported $845 million in revenue, up 33% from a year earlier. Similarly, free cash flow increased to $283 million, rising 35% year over year. Two factors are driving CrowdStrike's outstanding fundamentals.
First, the world needs more (or at any rate, much-improved) cybersecurity solutions. As countless crucial systems and data have become digitized, the profits from hacking have grown immense.
Nearly every month, dozens of cyberattacks -- some publicized, some not -- result in millions of dollars in damages. Consequently, organizations are eager to pay for the protection companies like CrowdStrike can provide.
Second, CrowdStrike differentiates itself from the pack by providing cutting-edge AI-powered cybersecurity that acts as a force multiplier. CEO George Kurtz put it this way last year when discussing how the company's latest generative-AI application, Charlotte AI, will help boost security and productivity for its clients:
Last I checked, security folks are hard to find, they're expensive, and they're hard to keep. So how do you make them more productive? And how do you get to teach them new skills on the job? These are the things that Charlotte is focused on.
Thanks to its innovative products and the enormous growth of the cybersecurity market, CrowdStrike remains near the top of my AI stock watch list.
Fiverr
Fiverr International (FVRR 0.68%) operates an online platform connecting freelancers with employers, might seem like an odd choice. After all, shouldn't the rise of AI eat away at the company's core business?
Yet if you dig down, it becomes clear that Fiverr's business model is not only resilient, but that the rise of AI is also opening up new opportunities for the company.
Consider this: In its most recent earnings call (for the three months ended March 31), management said, "We continue to see growth in our rapidly evolving AI services, including new services such as AI Avatar design and custom GPT applications, and currently have over 10,000 AI experts on our marketplace."
In short, the rapid growth of AI chatbots isn't killing the freelancer market; it's simply changing it. New AI-driven professions like prompt engineers and module developers are emerging, and Fiverr is quickly helping to connect employers and these freelancers with its platform.
Financially, the company remains early in its life cycle, meaning it is focused on revenue growth. Over the last 12 months, Fiverr generated $361 million in revenue, with quarterly sales growing 10% year over year. Analysts expect revenue to rise about 6% this year and 10% next year.
This isn't a stock for everyone. For one thing, the company isn't consistently profitable, making it a poor choice for value-seeking investors.
And growth-focused investors would be wise to keep an eye on the stock. It's a good example of how technological advancements can open up unexpected growth opportunities for people, organizations, and stocks.
