Introduction

Artificial intelligence (AI) is a dominant theme in the tech stock market, with companies eagerly showcasing their use of AI to enhance their operations. While AI may be currently experiencing a hype cycle, its long-term transformative potential for society cannot be ignored.

When investing in tech stocks, it is crucial to distinguish between companies genuinely leveraging AI and those merely riding the trend. Here are two tech stocks that are well-positioned to benefit from the AI boom and are excellent long-term investment options.

1. ASML

ASML, a Netherlands-based company, holds a critical role in semiconductor production by manufacturing lithography machines essential for chip manufacturing. The company's innovative extreme ultraviolet lithography (EUV) machines are vital for creating advanced chips, making ASML the sole provider of these precision instruments worldwide.

The global demand for AI chips has amplified the need for semiconductor chips, boosting ASML's revenue. With a significant backlog of orders amounting to $42 billion, ASML continues to demonstrate resilience and growth potential even in a cyclical chip industry downturn. As digitalization expands and AI development accelerates, the demand for semiconductors is expected to rise, benefiting ASML through increased orders and business opportunities.

2. CrowdStrike

CrowdStrike stands out as the first cloud-native AI-driven cybersecurity company, leveraging AI to effectively detect and prevent security breaches. By operating in the cloud and incorporating AI from the start, CrowdStrike enjoys a significant advantage over traditional cybersecurity systems that had to adjust to cloud computing trends.

The Falcon platform by CrowdStrike utilizes AI to analyze vast amounts of data, identifying and thwarting security threats efficiently. The platform's advanced threat detection capabilities and seamless threat-sharing among customers have driven the company's success in expanding its customer base and enhancing customer engagement.

CrowdStrike's fiscal 2024 performance showcased substantial growth, underscored by increased deals with customers adopting multiple products and achieving prominent milestones in profitability and cash flow generation.

Conclusion

In the realm of AI investments, ASML and CrowdStrike are top contenders in their respective industries with robust ties to AI. Both companies exhibit strong fundamentals and sustainable growth potential, making them attractive investments beyond 2024. The AI tailwinds forecasted for these companies further strengthen their positions as solid investment choices in the tech sector and beyond.