AI: 2024 will mark significant enterprise adoption, pricing
Chipmaker Nvidia (NVDA) isn't the only AI play investors should be favoring. Macquarie Head of U.S. AI & Software Research Fred Havemeyer joins Yahoo Finance Live the assortment of tech and software developers AI investors should consider in 2024, including Microsoft (MSFT), ServiceNow (NOW), and CrowdStrike (CRWD) among others.
"I believe that in 2024, we're going to begin to see the first really significant and material signs of enterprise adoption of generative AI, that going into also calendar year 2025... we'll be seeing significant adoption trends occurring," Havemeyer says. "With now products like Microsoft 365 Copilot rolling out, enterprises will actually have the opportunity to adopt and purchase these products."
Click here to watch the full interview on the Yahoo Finance YouTube page or you can watch this full episode of Yahoo Finance Live here.
Video Transcript
BRIAN SOZZI: All morning long, we're sitting here really all week long, I should say, really talking about all things NVIDIA. What might be in store for them? But you're here to say I think there are other names besides NVIDIA investors should be looking at. What are those names?
FRED HAVEMEYER: Yeah. Thank you. We put together a basket of names that we think provide exposure to the theme of generative AI just across a number of different sectors of software because even on our end, we thought for a while that Microsoft was one of the primary names to find exposure to significant and we think profitable generative AI growth.
So we put together a basket of stocks that we believe have solid exposure to generative AI, either directly or indirectly. And that includes, of course, Microsoft ServiceNow, CrowdStrike, MongoDB, HubSpot, Salesforce, and PowerSchool.
So we're looking at names all up and down the value chain here. We're looking at companies that we think will be monetizing products built with generative AI directly, like your ServiceNow, is your Salesforce, is HubSpot's, even PowerSchool, as well as those that are in the pick and shovel side of things like a MongoDB on the database side. And those that are exposed we think too what will be trends that are supportive of cybersecurity adoption related to generative AI with CrowdStrike pick
BRAD SMITH: So you think about some of the largest forces that have driven even investors' attention towards cybersecurity AI over the course of this year. What type of long tail are you seeing on those trades?
FRED HAVEMEYER: I think that this year was the year that we started seeing in 2023, it was the rise of ChatGPT. We all now suddenly know and can see a really commercialized use case that became extremely popular among consumers and even businesses of generative AI. I think going into 2024 and beyond, I believe that in 2024, we're going to begin to see the first really significant and material signs of enterprise adoption of generative AI.
That going into also calendar year of 2025, I think we'll be seeing really significant adoption trends occurring. I think with now products like Microsoft 365 Copilot rolling out, enterprises will actually have the opportunity to adopt and purchase these products, which were not previously available except on early access bases.
So going into 2024, we're finally going to see pricing emerge for many of these products. And as a result and on the other side of this, I think we're going to see a significant trend of adoption on enterprise generative AI. We're starting to see it with ServiceNow. We're certainly seeing it with Microsoft. And as companies roll out more products, I'm looking forward to seeing how the pricing and competition emerges. But I think 2024 is going to be the year of enterprise adoption of generative AI.
