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2 No-Brainer Artificial Intelligence (AI) Stocks to Buy With $260 in February
PANWPalo Alto(PANW) The Motley Fool·2025-01-31 09:22

Core Insights - The artificial intelligence (AI) sector has been a significant focus for investors, with companies like Nvidia and Microsoft leading the charge, while new opportunities continue to emerge in the industry [1] Palo Alto Networks - Palo Alto Networks is the largest pure-play cybersecurity company globally, with a market capitalization of 126billion,offeringAI−embeddedplatformsforcloudsecurity,networksecurity,andsecurityoperations[3]−ThecompanylauncheditsCortexXSIAMplatform,whichutilizesover400AIalgorithmstoautomatecybersecurityprocesses,significantlyreducingthemanualworkloadforenterprises[4][5]−InfiscalQ12025,PaloAltogenerated126 billion, offering AI-embedded platforms for cloud security, network security, and security operations [3] - The company launched its Cortex XSIAM platform, which utilizes over 400 AI algorithms to automate cybersecurity processes, significantly reducing the manual workload for enterprises [4][5] - In fiscal Q1 2025, Palo Alto generated 2.1 billion in revenue, a 14% increase year-over-year, with annual recurring revenue (ARR) from next-generation security (NGS) rising by 40% to 4.5billion[6]−TheguidanceindicatesthatNGSARRcouldexceed4.5 billion [6] - The guidance indicates that NGS ARR could exceed 5.5 billion by the end of fiscal 2025, representing over half of the projected total revenue of 9.1billion[7]−Thestockistradingnearrecordhighs,withaprice−to−salesratioof16.5,whichislowerthanitscompetitorCrowdStrikeHoldingsat27.1[7]−PaloAltoisexpectedtoreportitsfiscalQ2resultsinmid−February,andanincreaseinforwardguidanceforNGSrevenuewouldbeapositiveindicatorforthestock[8]−ThecompanyaimstotripleitsNGSARRto9.1 billion [7] - The stock is trading near record highs, with a price-to-sales ratio of 16.5, which is lower than its competitor CrowdStrike Holdings at 27.1 [7] - Palo Alto is expected to report its fiscal Q2 results in mid-February, and an increase in forward guidance for NGS revenue would be a positive indicator for the stock [8] - The company aims to triple its NGS ARR to 15 billion by fiscal year 2030, which could significantly enhance its stock value [8] Upstart - Upstart has developed an AI-powered loan origination platform that assesses creditworthiness using over 1,600 metrics, compared to the traditional FICO scoring system, resulting in a higher approval rate and lower interest rates [9][10] - The company has faced challenges due to weak credit demand since 2022 but reported a 65% increase in unsecured personal loans originated in Q3 2024, totaling 186,786 loans [11] - Upstart is set to report its Q4 2024 results on February 11, with a consensus revenue forecast of 599million,reflectinga16599 million, reflecting a 16% growth compared to 2023 [12] - Analysts project a 37% revenue increase to 820 million in 2025, presenting a potential buying opportunity as the stock remains down 83% from its 2021 peak [13] - The company operates in a market with over 3trillioninannualloanoriginations,havingonlyoriginated3 trillion in annual loan originations, having only originated 40 billion since its inception in 2012, indicating significant growth potential [14]