3 Technology Stocks to Buy Hand Over Fist in November

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Over the past year, artificial intelligence (AI) has captivated companies and investors, showing the potential to drive the next wave of economic growth.

Among the prospective beneficiaries, a few standout companies seem well positioned to capitalize on the AI boom — and, importantly for investors, still maintain relatively reasonable valuations. Here are three such stocks and a look at how each is integrating generative AI into its business strategy.

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Some investors fear generative AI could destroy Google Search, the largest segment for Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), as upstarts like OpenAI’s ChatGPT have taken market share. There is some validity to those concerns, considering research suggests Google has lost nearly 3% of its total market share since ChatGPT was launched in November 2022. Additionally, experts believe the United States Department of Justice could soon ban Google’s longtime deal with Apple, which makes Google Search the default setting on iPhones.

But digging into the numbers, according to Statcounter, a web analytics company, Google Search still makes up 89.3% of the total search globally. The segment continues to deliver for Alphabet, generating $49.3 billion in revenue for Q3 2024, representing a year-over-year increase of 12.2%. Additionally, if the deal falls through with Apple, Alphabet will save an estimated $25 billion annually, which it had been paying to the maker of iPhones.

Alphabet is taking the threat of AI seriously, having spent a staggering $49.3 billion on capital expenditures, most of which has been spent to build out its AI infrastructure, which includes servers and data centers. Google Search users may have already seen how the company has rolled out “AI Overviews,” which summarize search results into short paragraphs. Management claims the new feature reaches more than 1 billion monthly users.

Alphabet’s stock is up nearly 30% year to date and trades at a valuation of 24 times earnings. Notably, its five-year median price-to-earnings ratio is higher at 26.6 times earnings, suggesting the stock is on sale. With $82.3 billion in net cash at its disposal, the company can continue returning capital to shareholders through dividends and share repurchases. Notably, Alphabet initiated its first-ever dividend in 2024 and has repurchased 11% of its outstanding shares over the past five years, increasing existing shareholders’ ownership stake.

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