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The Dawn of AI Dominance: AI-Powered Stocks Ready to Surge in 2024

2023 saw remarkable gains in the stock market, with the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite posting double-digit returns. The surge of artificial intelligence (AI) was a major impetus for the momentum in tech stocks throughout the year. Investors cast their eyes toward 2024, wondering which companies are primed for continued domination. Let’s delve into three members of the esteemed “Magnificent Seven” and dissect why each of these stocks appears ready to maintain their reign in 2024.

1. Microsoft: Pioneering the AI Race

Microsoft (NASDAQ: MSFT) kickstarted the AI arms race with a groundbreaking $10 billion investment in OpenAI in early 2023. The alliance marked a pivotal leap as Microsoft seamlessly integrated the AI technology across its Windows operating system, resulting in substantial revenue growth, particularly in its Azure cloud business. Amidst the buzz, the spotlight is on Microsoft’s productivity assistant, CoPilot. Wall Street analysts project a staggering $100 billion in revenue from CoPilot by the decade’s end, setting the stage for a potentially lucrative venture.

Expectations are high, and analysts are bullish on the immense revenue potential generative AI presents, with a three-year price target of $600 for Microsoft stock, indicating significant upside. The path ahead entails closely monitoring CoPilot’s progress and the company’s operating margin, as sustained growth and profitability will be key. Should Microsoft soar on both fronts, investors are poised for ongoing success.

2. Amazon: A Late-Game Player in the AI Arena

Unlike its counterparts, Amazon (NASDAQ: AMZN) initially lagged in the AI race but captivated attention with a $4 billion investment in OpenAI rival, Anthropic. Seemingly belated, the collaboration carries the promise of rejuvenating growth, particularly in cloud computing. The partnership’s most intriguing feature lies in the integration of AI into Bedrock, a managed service offering an array of generative AI applications, heralding a renaissance in Amazon’s cloud business.

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Traversing a clouded macroeconomy, Amazon exercised patience, awaiting an opportune moment to reignite growth. With a P/S ratio indicating a substantial discount compared to its historical average, Amazon is primed for a resurgence, ready to harness the power of AI to garner sustained success.