3 stocks to watch in December
The year 2024 was full of challenges for stock market investors. Despite record highs in the S&P 500, the market faced high inflation, rising debt levels, supply chain disruptions and geopolitical tensions. In this uncertain environment, many investors are targeting strong and promising companies, with one of the most promising sectors being artificial intelligence (AI).
AI is emerging as a key technology that is changing the way companies operate in a variety of industries. Here are three stocks that can grow significantly in the coming months thanks to their AI projects:
Meta Platforms
Meta Platforms $META is a social media giant that is significantly improving user experience and optimizing advertising strategies through AI. Its AI tools, for example, increase user engagement - time spent on Facebook and Instagram grew by 8% and 6%, respectively, in 2024. This translates into better ROI for advertisers, as demonstrated by Meta's 7% increase in ad impressions and 11% increase in average cost per ad.
Meta is also expanding into new areas with AI assistant Meta AIwhich already has 500 million monthly active users. In addition, the company is investing in an open-source AI model Llamawhich has become an industry standard and attracted 350 million downloads per year.
With growing revenues, double-digit net profit growth and a strong financial position ($70.9 billion in cash), Meta represents an opportunity for investors, according to analysts.
Microsoft
Microsoft $MSFT is another key player in the AI sector. Despite concerns about slowing revenue growth from Azure cloud services, the company is showing strong results thanks to AI. Its partnership with OpenAI has brought in new revenue streams, with the AI division having the potential to reach $10 billion in annual sales.
Azure and other cloud services saw 33% year-over-year revenue growth, with AI accounting for 12 percentage points of that growth. Microsoft has also been successful in offering AI service packages (hardware, software, models) to enterprise customers, driving demand for Azure AI.
Another important source of growth is the productivity suite Microsoft 365. Copilot's AI capabilities are used by 70% of Fortune 500 companies, which strengthens customer loyalty. These innovations and strong financial health make Microsoft an attractive investment.
Micron Technology
Micron Technology $MU is a major player in memory for data center and AI applications. As demand for high-performance servers increases, so does the consumption of DRAM and NAND memory, where Micron plays a key role.
Micron is investing in production upgrades such as new beta DRAM technologies and advanced NAND processes to improve its profit margins. At the same time, it is focusing on HBM (high-bandwidth memory)which has key growth potential - the market is expected to grow from $4 billion in 2023 to $25 billion in 2025. Micron aims to capture 20-25% of this market.
Micron is already fully sold out for 2024 and 2025, providing investors with high certainty and stability of income.
Disclaimer: There is a lot of inspiration to be found on Bulios, however, stock selection and portfolio construction is up to you, so always do a thorough analysis of your own.
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