Technology stocks had a good start in 2024, with the Nasdaq-100 Technology Sector index gaining more than 10% already, and artificial intelligence (AI) has been a driving force behind this rally.

Strong quarterly results from top AI names such as Nvidia lifted not only tech stocks but also the market as a whole, with both the Nasdaq and the S&P 500 indexes hitting new highs. The positive stock market sentiment seems to have rubbed off on internet browser provider Opera (NASDAQ: OPRA) as well.

Shares of the company shot up more than 15% on March 1 as investors reacted positively to its fourth-quarter 2023 earnings report. Let's see why the market gave the thumbs-up to Opera's results, and check why it could be an ideal alternative for investors looking to buy an AI stock that's not as expensive as Nvidia.

Opera beats expectations and predicts another good year

Opera's fourth-quarter revenue increased 17% year over year to $113 million, landing at the higher end of its guidance range and exceeding the consensus estimate of $112.2 million by a whisker. The company's adjusted earnings per share (EPS) shot up to $1.38 from $0.22 in the year-ago period.

Opera credited its growth to the increased traction of its ad business, which grew 20% year over year. Advertising now accounts for 60% of the company's total revenue, and it is improving thanks to a focus on monetizing its browsers. Also, it had a 15% year-over-year increase in its search revenue.

The company finished the fourth quarter with 313 million monthly active users (MAUs), a slight jump from 311 million in the third quarter. More importantly, Opera was able to significantly improve the monetization of its customer base. Average revenue per user (ARPU) increased 22% year over year to $1.44.

This year, Opera is predicting a 15% increase in revenue to a range of $450 million to $465 million. While that would be a tad slower than the 20% full-year revenue growth it recorded in 2023, investors should not forget that the company kept raising its guidance each quarter last year.

It was originally anticipating $380 million in revenue in 2023 with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $76 million. However, it finished 2023 with $397 million in revenue and adjusted EBITDA of $94 million. Opera could repeat that feat in 2024 and outperform expectations thanks to its focus on integrating generative AI tools into its browsers.

Management said on the latest earnings conference call that generative AI is one of its core growth drivers. Its Aria browser AI service has been available since May 2023, and it surpassed 1 million users within just two months after launch.