2023 marked a significant turning point for artificial intelligence (AI) in the market, with the rise of ChatGPT capturing the attention of investors and leading to a surge in prominent AI stocks. As investors reflect on the past year and plan their New Year's resolutions, one stock that stands out as a potential investment is Verizon (NYSE: VZ). Despite facing challenges such as debt costs and growth struggles, recent developments indicate that Verizon is well-positioned for a strong performance in 2024.

Verizon has experienced a decline in its stock price over the last five years, falling by 35%. Factors such as slow customer growth, competition from T-Mobile and AT&T, and the substantial capital costs associated with network upgrades have weighed on the telecom company. Accumulating around $147 billion in debt, Verizon faces the task of refinancing almost $13 billion of upcoming debt obligations over the next year, with interest costs ranging from 1.625% to 4.073%.

However, the Federal Reserve's commitment to keeping the federal funds rate steady and reducing it three times in 2024 provides a favorable environment for Verizon. This interest rate cut could mitigate the impact of higher rates when issuing new debt. Lower rates can also stimulate revenue prospects for Verizon, as businesses may resume spending activities previously curtailed by higher borrowing costs.

Verizon's network quality has been consistently recognized, having been named No. 1 for network quality 31 times by J.D. Power. This reputation positions Verizon as an attractive choice for businesses seeking AI-driven solutions. AI applications rely on robust networks, and Verizon's accolades make it a strong contender for attracting clients within the AI space.

Furthermore, Verizon's 5G network has created an additional revenue stream through its support of AI-driven tasks and real-time insights and innovation. Companies like Honda Motor Company and Arizona State University already rely on Verizon's 5G network for critical connectivity and IT-related functions necessary for AI operations. Attracting similar clients will further enhance the importance of Verizon's 5G network and its role in facilitating the application of AI.

These developments are expected to pique the interest of investors as the benefits become more evident. In the past, Verizon's low price-to-earnings (P/E) ratio of just under 8 did not attract investors due to slow growth and high debt. However, if AI-driven applications drive revenue growth, investors may respond positively to the company's low earnings multiple.

While some argue that eliminating the dividend would expedite debt reduction, lower debt costs make it easier to maintain a payout, preserving the appeal of Verizon stock to income investors. With the company's commitment to supporting AI-driven applications and the potential for falling interest rates, Verizon is poised for growth in the new year.

Investors looking to capitalize on promising opportunities in the market may want to consider Verizon Communications. However, it is worth noting that The Motley Fool Stock Advisor analyst team recently identified 10 stocks they believe have the potential for significant returns, and Verizon Communications did not make the list. Investors interested in exploring these recommended stocks can access the Stock Advisor service, which provides a blueprint for success, including portfolio guidance, regular analyst updates, and two new stock picks each month. The Stock Advisor service has outperformed the S&P 500 by over threefold since 2002.

Disclaimer: Will Healy has no position in any of the stocks mentioned. The Motley Fool recommends T-Mobile US and Verizon Communications. The Motley Fool has a disclosure policy.