We recently published a list of Top 10 AI Stocks That Should Be On Your Watchlist for 2025. In this article, we are going to take a look at where Crowdstrike Holdings Inc (NASDAQ:CRWD) stands against other top AI stocks that should be On your watchlist for 2025.
Investors are looking for new growth horizons in the AI industry to gauge whether the current market rally can continue for the years to come. Chetan Puttagunta, Benchmark general partner, said he’s noticed a lot of innovation in the past few weeks focused on improving the efficiency of algorithms.
“In the last six to eight weeks, we’ve seen a tremendous amount of innovation, especially at the model layer, and then for the last two years at the application layer, taking advantage of all the advances in the AI models. Specifically, what’s happening at the model layer is, as we move into an inference-time or test-time compute paradigm, you’re seeing a lot more advantage to entrepreneurs and technical founders that are able to push to the frontier with algorithmic innovation.”
To explain how AI is now actually improving workflows, Puttagunta gave the example of Sierra, a conversational AI startup making customer service solutions.
“So think of this Sierra AI agent, if you will, delivering the best customer service agent experience every time, replicated an infinite number of times. And that’s an experience that was previously not possible without AI.”
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For this article, we picked 10 AI stocks that are making moves amid the latest news. With each stock, we have mentioned its hedge fund sentiment. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Number of Hedge Fund Investors: 74
Joseph Gallo from Jefferies said in a recent program on Schwab Network that despite a premium valuation and headwinds related to the July tech, Crowdstrike Holdings Inc (NASDAQ:CRWD) remains a strong pick for the long term.
“Valuation remains a premium, but as you look out over the next three to five years, it’s tough to find a vendor that’s better positioned to take advantage of that platform approach, right? You know, customers were upset in the moment, but customers remain massive fans of Crowdstrike Holdings Inc (NASDAQ:CRWD) long term, and we haven’t really seen a change in the competitive landscape.”
Despite the tech outage incident in July, the fundamental story of Crowdstrike Holdings Inc (NASDAQ:CRWD) remains unchanged. Wedbush Securities earlier this year said less than 5% of CrowdStrike’s customers might switch providers, potentially impacting revenue by $150 million out of the projected $3 billion in sales for fiscal year 2024. This would lower the company’s forward revenue growth from 30.6% to 25.6%, but even at this adjusted rate, Crowdstrike Holdings Inc (NASDAQ:CRWD) would remain well above the IT sector median.
Fidelity Growth Strategies Fund stated the following regarding CrowdStrike Holdings, Inc. (NASDAQ:CRWD) in its Q3 2024 investor letter:
“A non-benchmark stake in CrowdStrike Holdings, Inc. (NASDAQ:CRWD) (-40%) was the biggest detractor among individual stocks. The shares of this cybersecurity platform provider fell precipitously in July, after a glitch in a CrowdStrike software update led to a global outage for many of its customers that, among other impacts, caused the mass cancellation of flights around the world. After bottoming out in early August, the stock made a partial rebound by quarter end, but we exited the fund’s holding during the summer.”
Overall, CRWD ranks 8th on our list of top AI stocks that should be On your watchlist for 2025. While we acknowledge the potential of CRWD, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CRWD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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