Artificial intelligence (AI) is the talk of the town in 2024, permeating every sector of the economy like a pervasive mist. Missing out on the AI boom is akin to ignoring the rumbling thunder before a storm. While stalwarts like Nvidia (NASDAQ:NVDA) have ascended to lofty valuations, a new breed of AI stocks is quietly spreading their wings, poised for flight. Recent projections by Bloomberg foresee Generative AI metamorphosing into a $1.3 trillion behemoth by 2032. The landscape is shifting, and the time to embrace the AI frenzy is now. Here lie three hidden gems in the AI realm, burgeoning in obscurity.
The Resilient Power of Advanced Micro Devices (AMD)
Advanced Micro Devices (NASDAQ:AMD), the perennial rival to Nvidia, is scripting a remarkable tale in 2024. AMD’s stock has surged by 147% over the past year, a staggering 46% surge in the present year alone. The insatiable hunger for AMD’s chips has attracted tech juggernauts like moths to a flame, positioning AMD as a premier AI stock for discerning investors.
Priced at $202 presently, AMD’s trajectory is on a collision course with its 52-week pinnacle of $227, a summit that beckons tantalizingly close. The advent of the MI300 graphics processing units to manage escalated AI workloads sparks optimism. Should these GPUs strike a chord, the company could be in for a meteoric rise. Management prophesies a revenue influx of $3.5 billion from its chips this fiscal year, a testament to the robust foundation they’ve laid.
Fundamentally sound, AMD’s recent fourth-quarter performance showcased a resilient 6% year-over-year revenue escalation, culminating in an EPS of $0.41 and a revenue juggernaut of $6.2 billion. Engulfed in a colossal global data center arena, AMD stands battle-hardened, primed for a scuffle in the AI arena.
The quantum surge in chip demand has left Nvidia grappling with supply shortages, ushering a golden opportunity for AMD to seize the reins. Mizuho Securities has bestowed AMD with a bullish buy rating, anchoring a lofty price target of $235, an oasis for those wary of Nvidia’s stratospheric valuations.
The Phoenix Ascending: Palantir Technologies (PLTR)
Palantir (NYSE:PLTR), once enshrouded in government clandestinity, has metamorphosed into a profit-pinning powerhouse over the decade. Witnessing its inaugural quarter of positive net income in the recent quarter, Palantir dazzles with a suite of 103 lucrative deals, fueled by an upsurge in commercial clientele.
A cornerstone of Palantir’s ascent is its Artificial Intelligence Platform (AIP), a beacon guiding businesses through the labyrinth of data analysis and strategic decision-making. Boot camps tailored for clients have proven pivotal in transmuting leads into concrete deals.
Basking in a radiant 32% year-over-year uptick in commercial ventures and an 11% surge in government revenue, Palantir’s customer roster burgeons by 35% annually. A layered revenue edifice stands at $608 million, poised to scale greater heights, anticipating a $612 to $616 billion revenue surge for the ensuing quarter.
The AIP’s triumph with clients forebodes a windfall in revenues in the foreseeable years, with burgeoning profitability contours etching a rosy trajectory. Traded at $24 currently, Palantir’s hidden allure is pregnant with a promise to double investments, an understated gem waiting to gleam.
Post the revelatory AIPCon ordeal, Wedbush analysts vaulted Palantir’s orbit, raising the stock’s price objective from $30 to $35, cast under the luminance of an Outperform rating.
The Sleeping Giant: Amazon (AMZN)
Amazon (NASDAQ:AMZN), the titan of global e-commerce, boasts a silently humming AI engine, eclipsed by its larger-than-life stature. Nestled within its diversified portfolio spanning multitudinous industries, Amazon Web Services (AWS) emerges as a stalwart revenue fountain. A 13% year-over-year revenue surge in the fourth quarter plants a milestone in AWS’s saga.
AWS, commandeering a vast market share, has amassed billions from its operational theater. Notching $24.2 billion in revenue in the fourth quarter and a sumptuous $91 billion annually, AWS stands stalwart, a bedrock of reliability setting the stage for Amazon’s AI reservoir.
A harbinger of AI’s integration, Amazon’s AI acumen fortifies its cloud expanse, propelling the company’s positioning as a nurturing soil for growth. Priced at $175 today, Amazon’s stock gestures toward being underrated, offering ample space for attaining loftier heights. With a 16% year-to-date upswing and an 89% annual leap, Amazon’s trajectory remains deflated compared to AMD’s ascendancy. An appealing valuation underpins Amazon’s allure as a long-term investment venture.
View Amazon through the prism of e-commerce or an AI visionary, either facet is a valuable inclusion in your investment repertoire. Wall Street’s reverential gaze has Amazon entrenched as a favored darling, embraced by a cacophony of Buy ratings, propelling AMZN’s trajectory skyward in the ensuing months.