2 Artificial Intelligence (AI) Stocks That Rallied 59% and 130% Over the Past Year Are Still Worth Buying Today

The tech sector is coming back to life in 2023, after suffering significant losses in 2022. Investors are particularly interested in companies benefiting from artificial intelligence (AI), which has been the strongest area of stock market gains over the past year.

Over the past 12 months.Duolingo (NASDAQ: DUOL)respond in singingSpotify (New York Stock Exchange: SPOT)Both companies are using AI in their own unique ways, and AI can help them accelerate their growth in the coming years.

Here's why it's not too late for investors to buy these two stocks.

1. Duolingo

Duolingo is the world's largest digital language education platform. It uses a mobile-first approach to deliver fun, engaging and interactive courses to its 88.4 million monthly active users. Since 2013, the company has been developing artificial intelligence to improve user access, and is working with OpenAI, the creator of ChatGPT, to accelerate progress.

Duolingo's free model is to monetize by showing ads to free users and offering paid subscriptions for those who want to accelerate their learning. in the fourth quarter of 2023, Duolingo reached a record 6.6 million monthly paid users, an increase of 57% from the same period last year. part of this growth was due to the introduction of a new premium subscription level, called Duolingo Max, and the introduction of two artificial intelligence features. This growth was due in part to the introduction of a new premium subscription tier called Duolingo Max and the introduction of two artificial intelligence features.

Roleplay is an AI-enabled companion feature for users who want to practice their foreign language conversation skills. On the other hand, Explain My Answer uses AI to provide users with personalized feedback based on the mistakes they make in a particular lesson. These AI tools are an important step in that direction.

Duolingo generated a record $531.1 million in revenues in 2023, a year-over-year increase of $44%, an impressive result considering the tough economic climate for consumers due to rising inflation and rising interest rates. The company also realized a profit of $17.7 million, a significant improvement over its 2022 net loss of $58.6 million.

Duolingo is unique in that about 90% of its user growth has been organic, meaning that the company's marketing costs are relatively low. Its largest expense is actually R&D, which is mainly used to improve the platform and develop artificial intelligence.

Duolingo estimates that 2 billion people worldwide are learning a foreign language, so it has only scratched the surface of the addressable market. Considering the company's rapid growth, profitability, and future opportunities, it's no surprise that its shares have risen 59% in the past 12 months to near all-time highs. Again, it still looks like a good buy.

2. Spotify

According to Statista, Spotify is the world's largest music streaming platform, with a market share of 31%.Tencent Music came in second, with a share of just 141 TP3 T. Competition in this sector is fierce, as each streaming provider offers a similar music catalog to its subscribers, so they can only differentiate themselves based on their technology and other content.

On the content side, Spotify is a popular podcasting platform, with the industry's most popular show, "The Battle of the Birds".The Joe Rogan ExperienceIt's on the air right here. The two parties have just signed a new agreement, which is expected to be worth $250 million in a few years. In addition, Spotify last year became the second most popular channel afterAmazon Audible is the world's second largest audiobook platform, with more than 375,000 audiobooks, and Spotify Premium subscribers can listen to 15 hours of audiobooks per month, with the ability to pay to listen to more audiobooks, creating a new revenue stream for the company.

On the technical side, Spotify uses artificial intelligence in its content recommendation engine to understand what each user likes, so it can recommend more content and increase user engagement, as well as a feature called "AI DJs," which can customize playlists for each user, complete with software-generated voiceovers. Spotify also has a feature called "AI DJ" that customizes the playlist for each user, with a software-generated voiceover.

In addition to AI, last year the company launched a unique feature called "Clips" to help artists reach out to their audience. clips are primarily short-form, so it offers content in the same format as TikTok andMeta Platforms The Clips are similar to Instagram Reels, which has helped Spotify attract younger users. During the Spotify Wrapped 2023 campaign, 40,000 artists used Clips, generating 725 million views, more than half of which came from Gen Z users.

Spotify ended 2023 with 602 million monthly active users, a year-over-year increase of 231 TP3T, which drove full-year revenue up 131 TP3T to a record $14.1 billion. Chief Executive Officer Daniel Ek aims to reach 1 billion users by 2030, which means the company still has plenty of room for growth.

Even though Spotify's stock price has risen 1,30% in the last 12 months, it's still 17% below its all-time high set during the tech boom of 2021, so even though the company has come a long way in the last three years, investors can buy the stock cheaper today than they could have done otherwise. Considering Ek's long-term forecast for the user base, this represents an opportunity.

Should you invest $1,000 in Duolingo now?

Before buying Duolingo stock, consider the following:

Motley Fool Stock AdvisorThe analyst team has just named what they believe to be the best value for investors.10Only ...... and Duolingo is not one of them. The 10 stocks that made the list could generate huge returns in the coming years.

Consider April 15, 2005NvidiaOn the list ...... If you invest $1,000 at the time of our recommendation, theYou will have 540,321dollar! * *The

Stock AdvisorIt provides investors with an easy-to-learn blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. Stock Advisor The service has contributed to the S&P 500 Index's return since 2002.translate twiceMuch*.

View 10 Gift Certificates

*Stock Advisory Rates as of April 8, 2024

Randi Zuckerberg, former Market Development Director of Arms and Spokeswoman for Facebook, and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool Board of Directors. John Mackey, former chief executive of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's Board of Directors. Anthony Di Pizio has no position in any of the stocks mentioned above, and The Motley Fool owns shares of Amazon, Duolingo, Meta Platforms, Spotify, and Meta Platforms, as well as a number of other stocks. The Motley Fool has a disclosure policy.

2 Artificial Intelligence (AI) Stocks That Rallied 59% and 130% Over the Past Year Are Still Buys Today was originally published by The Motley Fool.