The meteoric growth of generative AI is set to continue into 2024 as the transformative technology moves into its implementation phase.

Whether you believe that generative AI is a fresh dotcom bubble or the biggest innovation of the 21st Century, it’s clear that the stock market rally driven by the technology isn’t ready to slow down just yet.

According to a recent Bloomberg Intelligence has suggested that the emerging industry could grow at a CAGR of 42% to become a $1.3 trillion market by 2032, a feat that would provide masses of prosperity to the generative AI stocks that sustain the boom period.

This sentiment is echoed by Wedbush analyst Dan Ives, who suggested that the rise of generative AI is the “fourth industrial revolution playing out.”

“I think this is really transformational changes to technology that I think would change the tech space for the next 20-30 years,” Ives added. “I think we are just starting what we believe is the start of a new tech bull market, despite many of the bears continuing to really being skeptical.”

Generative AI Revolution Shifts into the Implementation Phase

Crucially, the generative AI boom will shift its focus starting in 2024 as early adopters move beyond concepts and into implementing the technology for their operations.

This is likely to be a difficult process for many enterprises. Much of the early hype surrounding GenAI stocks was focused on Nvidia as a leading chipmaker that could power much of this shift toward artificial intelligence, but will entry costs temper enthusiasm?

2024 will see more business leaders looking to move beyond the ideation process and into piloting the technology to optimize operational efficiency, productivity, and creativity.

To supplement this, generative AI providers will spend the year seeking profitable business models that are ready to support premium quality systems.

So, what will fully integrated generative AI models look like as businesses seek to implement the technology?  The MIT Technology Review suggests that early implementation will take the form of customizable chatbots that will offer more efficient support for customers based on powerful large language models (LLMs).

Although the growth of GenAI chatbots for businesses will be dependent on eliminating existing biases and inaccuracies within models, it’s logical to expect that the success of ChatGPT manifests itself in the development of LLMs for business as the technology becomes more commonplace.

Will Barriers Get The Better of GenAI in 2024?

Despite the vast potential of generative AI, there will likely be many bumps in the road as the technology grows.

2024 is likely to uncover many flaws and weaknesses in generative AI as the technology remains in its infancy.

The threat of error and inefficiencies will be a major barrier to the widespread adoption of generative AI technology and could impact some of the stocks that have performed exceptionally well on Wall Street in recent months.

Patience is always a virtue when it comes to emerging tech, and any short-term volatility is set to give way to more widespread market optimism as more sophisticated solutions are developed.

However, the inevitability of inefficiencies means that investors could be best placed to trust larger generative AI stocks for the first half of 2024 as reality begins to bite for firms with big ideas and few efficient solutions to show for them.

Where Should Investors Look in H1 2024?

As generative AI shifts into its implementation phase, we’re likely to see some fundamental changes to how investors view stocks in the first half of 2024.

Market euphoria as innovations emerge can quickly give way to timely reality checks as investors begin to remember the value of fundamentals and sustainable business models.

We can expect this to deliver more value to resource-rich firms that have the power to overcome the challenges thrown up by 2024 with greater efficiency. However, there will still be plenty of room for strong growth stocks with innovative plans for the industry.

With this in mind, let’s explore three stocks that are set to show strong performance in H1 2024:

1. Alphabet (​​NASDAQ: GOOGL)

Alphabet’s influence in the world of generative AI can’t be understated. Crucially, more than half of generative AI startups are Google Cloud customers, and the tech giant’s cloud services are growing at a healthy 22% pace in a market still blighted by economic headwinds.

In addition to this, Alphabet’s strategic artificial intelligence investments are set to provide more industry growth throughout the coming months. Most notable is the firm’s Gemini generative AI model, which could help to bolster the evolution of the technology throughout its future.

“In Q3 2023, Alphabet reported revenue of $76.7 billion, showcasing notable YoY growth of 22% and 11% in Google Cloud and Search revenues, respectively,” highlights Maxim Manturov, head of investment research at Freedom Finance Europe. “The integration of generative AI played a key role in boosting ad revenues on YouTube to an impressive $7.95 billion.”

“Alphabet strategically plans to integrate AI broadly across its business segments, leveraging its substantial advantage in data,” Manturov added.

Given that Alphabet is already utilizing generative AI solutions to make existing processes like advertising on YouTube more profitable, it provides a relatively safe foundation for investors to buy in the hopes of accelerating GenAI innovation in the future.

2. Amazon (NASDAQ: AMZN)

Amazon represents another safe bet for investors to continue growing its generative AI competencies in early 2024.

The eCommerce giant has already sought to integrate AI across a vast array of services and recently announced its new generative AI chatbot, Q.

In addition to this, the launch of text-to-speech and speech-to-text services, Amazon Polly, is another example of high-performance artificial intelligence solutions that are immediately ready for market.

Investors can expect Amazon to continue scouting out innovative AI solutions in the new year at a rapid pace. This is underlined by the waves that the tech leader has made in its $4 billion investment in healthcare AI startup Anthropic.

3. Palantir Technologies (NYSE: PLTR)

Finally, Palantir is an example of a specialist artificial intelligence company that’s continually shown sustainable growth, paving the way for greater investor confidence in the firm’s sustainability as the generative AI boom grows in 2024.

The financial performance of Palantir is a cause for optimism, reporting Q3 2023 revenue of $558.16 million, representing 16.8% growth over the same period in 2022.

Palantir’s strong market position in the world of AI was underlined by a recent market study from Dresner Advisory Services, which highlighted the firm as a leading provider of analytics features in model operations.

This indicates that Palantir could be a key beneficiary as generative AI ideation leads to implementation, with the firm likely to be at the forefront of the minds of many business leaders during the first half of the year.

Market Growth to be Underlined by Efficiency

The furor surrounding generative AI will transform into a widespread quest for efficiency in the first half of 2024, with business leaders seeking practical, reliable, and affordable solutions to incorporate into their operations.

We can be sure that the draw of generative AI and its incredible pull over investors will ensure its widespread appeal among would-be adopters, but the successful implementation of such a transformative technology will be key over the coming months.

There will still be room for innovative new ideas and fresh industry breakthroughs, but the quest for sustainability will likely provide a timely reality check. With this in mind, we’re likely to see investors place their trust in key industry players with a track record of innovation.