Investors can’t seem to get enough of artificial intelligence (AI) stocks. Many corporations specializing in this industry have experienced tremendous stock gains over the past year. Some stocks in the industry have doubled while others have more than tripled, especially with these AI growth stocks for 2024.
It’s easy to think these stocks need a breather after a strong 2023, but these firms have continued to post strong financials. Investors looking to grow their portfolios with AI stocks may want to consider these three picks.
Nvidia (NVDA)
Despite the stock tripling over the past year, many analysts still feel bullish about Nvidia (NASDAQ:NVDA). The stock has a “Strong Buy” rating from 38 analysts, with an average price target of $675.40. This price target implies an 11% upside. The highest price target is $1,100, an 80% gain.
Nvidia has a vast competitive advantage with its AI chips that helped the company triple its revenue in the third quarter of fiscal 2024. Data center revenue is the big driver, up by 279% year-over-year.
While most investors who recently heard about Nvidia know it as an artificial intelligence stock, the company is growing in other verticals. Gaming revenue grew 81% year-over-year, while professional visualization revenue increased 108% year-over-year.
Nvidia’s AI products are taking off, and CEO Jensen Huang stated that the company’s growth engines are in full throttle. Huang mentioned GPUs, CPUs, networking, AI foundry services and Nvidia AI Enterprise software as growth engines.
Arista Networks (ANET)
Arista Networks (NYSE:ANET) is set to grow as more businesses embrace artificial intelligence. The firm offers data-driven, client-to-cloud networking for large data centers, campuses, and routing environments. Arista Networks’ customers will need more bandwidth to run AI tools, which can lead to higher revenue and earnings.
The firm serves over 8,000 cloud customers and has healthy profit margins. The company reported 28.3% year-over-year revenue growth in the third quarter of 2023 and saw its net income rise by 54.1% year-over-year. The company had a 36.1% net profit margin in the third quarter.
Arista Networks has consistently outperformed the stock market. Shares have more than doubled over the past year and have gained 380% over the past five years. The stock has a 36-forward P/E ratio. The company generates recurring revenue from its customers, which offers a good baseline. Artificial intelligence is another catalyst for this compelling growth stock.
Amazon (AMZN)
Amazon (NASDAQ:AMZN) operates in many verticals. The company’s online marketplace was the initial seed that has led to additional ventures and acquisitions.
Amazon Web Services, Twitch and Whole Foods are some companies under the Amazon umbrella. Amazon Web Services is making it easier for developers to build language learning models like ChatGPT. These language learning models can save organizations time and reduce costs.
Amazon is even working on its own AI chips that can handle the workload of artificial intelligence models. The company is simultaneously entering a deeper partnership with Nvidia. AI chips will give Amazon another revenue stream that can benefit long-term investors.
Amazon shares marched 56% higher over the past year and have gained 96% over the past five years. The tech conglomerate is tapping into artificial intelligence and can reward shareholders with revenue acceleration. The company posted double-digit year-over-year revenue growth rates in back-to-back quarters.
On this date of publication, Marc Guberti held long positions in NVDA and ANET. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
