Ever since ChatGPT’s debut in late 2022, investors have been all-in on AI stocks. They expect that, much like the internet changed the world over the past two decades, artificial intelligence will change the world over the next two decades.
Makes sense. But then, what AI stocks should you be buying?
Here’s an idea: Marketing AI stocks.
When looking for future AI winners, we don’t want to focus on firms that are hard at work on AI models or developing new products. Rather, we’re searching for the companies that are already turning new models and products into profits right now.
And it appears some marketing firms have this figured out.
Marketing AI Firms: Getting Ahead With Powerful Products
I’ll bet most readers have never heard of Zeta (ZETA) or Klaviyo (KVYO) before. Both are small marketing technology companies that provide innovative services to help customers better market their products.
And both stocks are up about 30% over the past month, even amid the market’s recent selloff. In fact, ZETA stock is up nearly 170% this year.
These huge run-ups in ZETA and KVYO can be attributed to these firms’ new AI products, which are driving accelerated growth and boosting long-term growth prospects.
At Zeta, the company is using AI to help clients better understand their customers and how to market to them. At Klaviyo, the company’s flurry of new AI products are collectively helping customers to better analyze the relative success of their different marketing campaigns.
Thanks to these powerful new products, Zeta grew revenues by 33% last quarter. Klaviyo grew revenues by 35%.
And now Wall Street is rewarding this supercharged growth with higher stock prices. We think this positive trend can continue for both ZETA and KVYO stock.
But the bigger point here is this…
Artificial intelligence is already being used to drive real-world financial value. The companies that are successfully using AI to increase profits will likely see their stocks soar for the foreseeable future.
KVYO and ZETA are just two examples of this in the marketing world.
But plenty of companies in other corners of the AI Boom are doing the same…
The Final Word
Look at Samara (IOT) in the industrial world. The firm has honed its sensors and AI to optimize the utilization of things like heavy machinery in the construction and manufacturing industries. And as a result, its stock is up 60% over the past year.
Or how about Palantir’s (PLTR) impact in the military world? That stock has soared 70% this year alone because the company has figured out how to successfully deploy AI in the military and defense industries, improving outcomes for clients like the U.S. government.
Q2 (QTWO) is pioneering innovative AI solutions for banks and other financial institutions. AppLovin (APP) is doing the same in the mobile advertising world. Cellebrite (CLBT) is creating powerful AI for law enforcement agencies. And all three of those stocks are up more than 50% this year.
So, which stocks should you be buying?
Those that are already making a difference, creating transformative AI and turning it into profits.
Learn about a few stocks we have our sights on right now.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
P.S. You can stay up to speed with Luke’s latest market analysis by reading our Daily Notes! Check out the latest issue on your Innovation Investor or Early Stage Investor subscriber site.