<div id="readability-page-1">The U.S. stock market has demonstrated exceptional strength in 2024, with the benchmark S&amp;P 500 up by 26.6% as the year drew to a close. The Federal Reserve's expansionary monetary policy, rapid advancements in artificial intelligence technologies, and the increasing strength of the technology sector seem to have played pivotal roles in this growth. Not surprisingly, many AI-powered technology stocks rose dramatically in 2024, and now trade at expensive valuations. However, some of these still have huge scopes for growth. If you have even a modest amount of money that you can commit to your portfolio now for the long term -- even $500, for example -- purchasing any of these three stocks as 2025 arrives could be a smart move. <h2>1. Palantir</h2> Palantir Technologies (PLTR -3.72%) has emerged as a Wall Street darling for several reasons. The company's cutting-edge data mining and analytics solutions are increasingly used by government agencies and large enterprises across mission-critical environments. Since their use cases involve rigorous data integrity and confidentiality requirements, such clients tend to avoid switching to competing providers. This dynamic has helped Palantir build a sticky customer base. Palantir's Artificial Intelligence Platform (AIP) is at the heart of the company's impressive growth. It differs from other players in the artificial intelligence niche by opting for AI system implementation over model development, as models are increasingly commoditized. Instead, Palantir focuses on ontologies -- frameworks that help associate digital assets with real-world applications -- to effectively deploy AIP. The company's recent financial and operational performance has been impressive. In the third quarter, Palantir's customer base expanded by 39% year over year to 629. While U.S. revenue was up by 44%, overall revenue soared 30% to $729 million in the quarter. The company is also demonstrating improving cost efficiency. While operating expenses rose by 13.5%, revenue jumped 30%. Subsequently, the company's operating margin was also a solid 38%. Furthermore, Palantir generated adjusted free cash flow of more than $1 billion in the trailing four quarters. At this writing, Palantir trades at a lofty 70.9 times sales, far higher than its five-year average price-to-sales (P/S) ratio of 25.1. However, considering its robust AI-powered tailwinds and its recent inclusion in the S&amp;P 500 index, the stock seems to be a compelling buy even at this elevated valuation. <h2>2. C3.ai</h2> Leading enterprise AI player C3.ai (AI -4.26%) has also significantly improved its financial performance in recent quarters. In the company's fiscal 2025 second quarter, which ended Oct. 31, revenue rose 29% year over year to $94.3 million, exceeding the high end of the company's guidance range. This marked the seventh consecutive quarter of accelerating top-line growth. In addition, the company is also successfully reducing its over-reliance on its Baker Hughes contract. Non-Baker Hughes revenue soared 41% year over year in fiscal Q2. C3.ai is not yet profitable. However, the company is gradually reducing losses. In the second quarter, it's non-GAAP operating loss of $17.2 million was far better than its guidance for a loss of between $26.7 million and $34.7 million. The revenue momentum is set to continue thanks to the strategic alliance the company signed with technology giant Microsoft on Sept. 30. Under the agreement, which runs through March 2030, all of C3.ai's enterprise AI and generative AI services will be available on Microsoft's Azure marketplace. This deal will enable C3.ai to leverage the tech giant's market reach, which covers more than 95% of the Fortune 500. Since Microsoft's sales personnel will be incentivized to sell C3.ai's services, C3.ai will also benefit from the dramatic expansion in the sales force promoting its services. C3.ai boasts a strong balance sheet with more than $730 million in cash, cash equivalents, and investments, and negligible debt. This gives the company flexibility to invest in research and development without diluting its shareholders. Hence, although C3.ai is trading at a P/S multiple of about 14.1, far higher than its three-year average multiple of 10.7, the stock appears an attractive pick now. <h2>3. UiPath</h2> UiPath (PATH -2.28%) stands out as a compelling pick for 2025 for several reasons. A prominent player in the business of AI-powered robotic process automation (RPA), it's now making rapid strides in the AI agent automation space. Market research firm IDC estimates that the AI agent labor automation market will expand from zero in 2023 to almost $4.1 billion by 2028. UiPath is releasing tools and technologies to enable clients to build, maintain, and deploy AI agents for automation. This strategy is expected to lead to the introduction of automation across multiple new use cases. AI agent automation is already generating significant customer interest -- more than 1,000 organizations have signed up for the private preview of UiPath's agent builder. That's the largest number of registrations a preview in the company's history. AI agent automation is set to emerge as a major growth catalyst for UiPath in the coming years. The company differentiates itself from competition by offering AI agents and robots that can work across both legacy and new applications, which prevents vendor-locking for customers. The company also offers orchestration to manage AI agents, people, models, and robots. Finally, the company is also leveraging its low-code tools to democratize access to AI agents. As growth opportunities develop, UiPath's AI-powered automation platform is well positioned to benefit from the double-digit percentage growth rate of the RPA market. In the company's fiscal 2025 third quarter, which ended Oct. 31, annual recurring revenue soared 17% year over year to $1.6 billion. Furthermore, its dollar-based net retention rate was 113%, indicating success in retaining customers and cross-selling to them. Considering its many potential tailwinds, UiPath could be a smart long-term buy in 2025. </div>

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The U.S. stock market has shown strong growth in 2024, with the S&P 500 up 26.6%. Key drivers include the Federal Reserve's monetary policy and advancements in AI. Three stocks to consider for a $500 investment are: 1) Palantir Technologies, which has a growing customer base and impressive revenue growth; 2) C3.ai, which is expanding its revenue and has a strategic partnership with Microsoft; 3) UiPath, a leader in AI-powered automation with significant market potential. Despite high valuations, these stocks are seen as compelling buys for long-term growth.

- The U.S. stock market saw significant growth in 2024, with the S&P 500 rising by 26.6%, driven by the Federal Reserve's monetary policy and advancements in AI.  
- Three notable stocks for long-term investment include Palantir, which reported a 30% revenue increase and a strong customer base, C3.ai, which is expanding its revenue through a partnership with Microsoft, and UiPath, which is capitalizing on the growing AI agent automation market.  
- Despite high valuations, these companies are positioned for continued growth, making them attractive options for investors entering 2025.

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