AI Stocks Retail Investors Are Watching In ServiceNow Oracle And Alphabet

AI related investment is helping support growth in parts of Europe, even as higher energy costs and conflict risks keep volatility elevated. That mix of caution and targeted spending is drawing fresh attention to stocks tied to the ChatGPT and AI boom. Investors do not want to miss companies powering this shift. This article highlights 3 AI stocks from our screener that stand out on this theme.

The three AI stocks below are just a starting sample, and the full screen surfaced 674 more companies with equally compelling narratives that are not covered here. If you want to go broader and deeper on this theme, head straight to the Artificial Intelligence/ AI Stocks screener to identify and analyze the highest conviction AI plays.

ServiceNow (NOW)

Overview: ServiceNow is a cloud software company that helps large organisations run critical workflows, from IT support and cybersecurity to HR, customer service and AI governance, so everyday processes move smoothly across departments.

Operations: ServiceNow generates about US$14.7b in revenue primarily from its internet software and services business, with most sales coming from the United States and the rest spread across EMEA, Asia Pacific and other regions.

Market Cap: US$128.2b

Investors looking at AI infrastructure rather than headline grabbing chatbots may pay attention to ServiceNow. The company sits inside many large enterprises as the workflow “nervous system” and is now using that position to help customers control and monitor AI through features like AI Control Tower and agent governance. Subscription revenue and AI related contract value are already measured in the billions, while renewal rates near 98% suggest deep customer reliance. At the same time, the stock trades on a rich P/E and depends on external funding sources, so market setbacks can be significant. The key consideration is whether you view this as a maturing software vendor or a utility-like platform for AI era operations that the market may still be mispricing.

ServiceNow’s workflow “nervous system” position across large enterprises could be masking a very different AI story than a typical software vendor. Get the full picture in the analysis report for ServiceNow

Build your own AI workflow shortlist

ServiceNow and the other two AI stocks here all came from a single screener, but the real edge is in creating filters that fit how you invest. Use our Screener to mix metrics like valuation, growth and balance sheet strength, or tap into our curated Investing Ideas for ready made starting points.

Oracle (ORCL)

Overview: Oracle is a global software and cloud infrastructure company that provides databases, business applications and computing power that large organisations, governments and hospitals use to run core operations and increasingly to power AI workloads. Its portfolio spans Oracle Cloud Infrastructure, Fusion and NetSuite applications, Oracle Health and industry specific solutions that tie together data, AI and everyday business processes.

Operations: Oracle generates about US$65.4b in revenue, with roughly US$58.5b from cloud and software, US$5.7b from services and US$3.1b from hardware, and around US$39.8b of sales coming from the United States.

Market Cap: US$433.6b

Investors watching the AI build out are paying close attention to Oracle because it now supplies the cloud infrastructure behind some of the most demanding workloads, including OpenAI superclusters and multi cloud database partnerships with Amazon, Google and Microsoft. The contract backlog has reached very large levels and runs alongside strong earnings growth and a P/E that screens lower than many software peers. Together these factors suggest the market may not fully appreciate the scale of long term AI demand priced into signed deals. The flip side is heavy debt, negative free cash flow from data center spending and credit concerns, which mean you need to weigh the appeal of AI driven growth and DoD contracts against the funding and execution risks that still hang over the stock.

Oracle’s AI cloud story appears broader than many investors assume, with a sizeable backlog and a P/E that screens lower than peers. Get the context in the 4 key rewards and 3 important warning signs (1 is major!)

Alphabet (GOOGL)

Overview: Alphabet is the parent company of Google, running a global ecosystem that spans Search, YouTube, Android, Chrome, Google Maps, Google Play and subscription services, alongside Google Cloud, which supplies AI infrastructure, data, cybersecurity and productivity tools to businesses.

Operations: Alphabet generates most of its revenue from Google Services at about US$367.1b, with Google Cloud contributing roughly US$77.6b and Other Bets around US$1.5b.

Market Cap: US$4,217.3b

Alphabet sits at the center of the AI build out, with Gemini integrated across Search, YouTube and Workspace and Google Cloud already profitable. Net profit margins above 50% and high forecast ROE indicate how much cash the core ad and cloud businesses can generate, even as heavy AI infrastructure capex has recently pushed free cash flow into decline and created earnings volatility related to large SpaceX and Anthropic gains. At the same time, the stock is described as trading well below estimated fair value. For investors, the question is how to weigh regulatory and funding risks against a combination of large scale AI assets and a substantial cloud and data backlog that the market may not be fully pricing in.

Alphabet’s AI engine is generating significant profits, yet the stock is still described as trading well below estimated fair value. Get the full story in the 4 key rewards and 2 important warning signs (2 are major!)

Seeking Fresh Alternatives Before Others?

AI stocks are grabbing attention, but other themes are building quiet momentum. Before the best entry points get caught by the crowd and pricing shifts, act now.

• Scan a curated pool of sturdy cash generators through the 10 dividend fortresses while yields still look appealing and attention remains limited.
• Review the hand picked 19 high quality undiscovered gems that remain under the radar for now and may attract momentum once institutions refocus.
• Filter for a targeted 80 resilient stocks with low risk scores group that may help steady your portfolio if volatility picks up again and quality gets priced richer.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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