Over the last ten years, there has been significant fluctuation in the U.S. stock market due to various factors like economic data, global tensions, and technological progress. Investors with a long-term perspective should focus on investing in stocks of companies that have enduring competitive strengths. Businesses that can adjust to market changes perform better than those with inflexible operations when the market goes through periods of growth and decline.
Considering this, let’s examine the three stocks that are recommended for a long-term investor to consider purchasing.
1. Palantir
The initial stock to include in your purchasing list is data mining. AI Expert in artificial intelligence Palantir ( PLTR 2.49% ) , a company recognized for its sophisticated ability to analyze large amounts of disorganized and intricate data in order to produce useful conclusions for both governments and businesses.
Palantir has a strong reputation for providing technology solutions to government agencies to prevent terrorist attacks and detect malicious individuals. However, the company has also seen success in its U.S. commercial sector, particularly due to the growing popularity of its new artificial intelligence platform (AIP). In the initial quarter of fiscal year 2024, revenue from U.S. commercial operations increased by 40% compared to the previous year, reaching $150 million. Additionally, the number of U.S. commercial customers grew by 69% year over year to 262.
AIP is playing a significant role in driving growth by enabling clients to swiftly and efficiently integrate AI applications. It also has the capability to handle clients’ disorganized and unstructured data to generate practical results. This offers a significant competitive edge as most competitors are limited to working with data that is already prepared for AI implementation.
Palantir is a strong investment choice as the global data production is projected to exceed 180 zettabytes by 2025, and there are numerous government agencies and businesses that can take advantage of its outstanding services.
2. Oracle
The database specialist could be the next great stock to add to your investment portfolio. Oracle ( ORCL 2.40% ) The company is experiencing significant growth in its cloud division, particularly in Oracle Cloud Infrastructure (OCI). This is primarily due to the high demand for data center infrastructure optimized for artificial intelligence applications, such as training and running large language models. Despite the challenging economic conditions, Piper Sandler has expressed strong confidence in Oracle by including it in its list of top investment ideas.
Oracle’s cloud infrastructure is recognized for being quicker, more efficient in terms of cost, autonomous, and secure when compared to other providers in handling intricate AI and machine learning tasks, especially the training and inference processes of large language models. The company is developing compact, flexible, and cost-effective data centers alongside extensive data centers that utilize liquid cooling technology to handle the energy-demanding and heat-intensive AI tasks. Oracle is experiencing significant advantages from the ongoing shift of businesses moving from on-site infrastructure to cloud-based solutions.
The outstanding commitments for Oracle Cloud Services increased by 44% compared to the previous year, reaching $98 billion by the end of fiscal year 2024 (ending on March 31, 2024). The management anticipates a yearly revenue growth of over 50% from cloud infrastructure services for fiscal year 2025. Additionally, the company is forecasting a revenue growth in double digits for fiscal year 2025.
Given this context, with Oracle’s forward earnings multiple standing at only 17.78, it appears to be a very good deal.
3. Confluent
The data streaming platform player is the third stock on the list. Confluent ( CFLT 2.01% ) Despite exceeding revenue and earnings expectations in the previous quarter, investors were displeased with Confluent due to the growing unpredictability in consumption trends among its major digital native clients. The company experienced consistent demand in the initial quarter and strong demand in the beginning of the second quarter, but customers started prioritizing the management of immediate cloud expenses in June 2024. As a result, Confluent’s progress in exploring new usage scenarios has been impacted.
Confluent’s stock has dropped significantly by more than 25% following the release of its financial results for the second quarter of fiscal year 2024. The extent of this decline may be overstated, given that Confluent is a prominent company that helps businesses analyze and manage data streams instantly. This is crucial in the current landscape where AI and machine learning technologies rely heavily on real-time data. Confluent’s platforms are already being utilized in AI applications like voice assistants and tailored customer experiences that demand reliable and secure data streams.
Confluent is close to finalizing its shift towards a consumption-focused business model and has introduced additional features like stream processing, connectivity, and governance to its data platform. This transition has proven to be successful, with the company acquiring 320 new customers in the second quarter, bringing its total customer base to approximately 5,440, marking the highest growth over the past two years. Confluent has observed that customers utilizing both the cloud-based and platform-based data streaming services demonstrate stronger loyalty and exhibit a higher The net retention rate refers to the percentage of revenue retained from existing customers over a specific period, after accounting for customer losses, upgrades, and expansions. The amount spent by current customers compared to the previous year is higher than the total spent by the company.
Confluent’s stock is unpredictable and may experience further declines due to the current unstable macroeconomic conditions. Nevertheless, given its strong growth drivers and significant contribution to the evolving AI sector, it might be worth considering investing in a small portion of this promising stock.
