Artificial intelligence (AI) is a buzzword of 2024, and it is everywhere. You are missing out big time if you are not on the AI ride. Companies and investors are pushing big money into AI and will rule the market in the coming years. While some celebrated stocks like Nvidia (NASDAQ:NVDA) have become too expensive to touch, others could soar to new highs soon. According to new Bloomberg research, Generative AI can become a $1.3 trillion market by 2032. The economy is growing, and it is time to join the AI hype. Here are three overlooked AI stocks that are soaring in the shadows.
Advanced Micro Devices (AMD)
Nvidia’s biggest competitor, Advanced Micro Devices (NASDAQ:AMD), has had a good start to 2024. AMD stock has been up 147% in the past year and 46% in the present year. There is rising demand for its chips, and some of the biggest tech companies are lining up to get their hands on AMD chips. AMD is one of the best AI stocks to own.
Trading at $202 today, the stock is moving closer to the 52-week high of $227, and it isn’t done yet. AMD stock will keep moving upward over the next few weeks. There are several reasons to put your money in AMD stock.
It recently launched the MI300 graphics processing units to handle higher AI workloads. If the GPU is a hit, we could see even better numbers in the coming years. Management predicts revenue of $3.5 billion from its chips this year.
Fundamentally, AMD is back on track and saw a 6% year-over-year revenue surge in the fourth quarter. It reported an EPS of $0.41 and a revenue of $6.2 billion. The global data center market is huge and AMD is a mature company with a lot of potential to thrive in a competitive environment.
The growing demand for chips means that Nvidia cannot handle the supply by itself, and customers will have to look for alternative options. This is a massive growth opportunity for AMD, which can hit new highs in the coming months.
Mizuho Securities has a buy rating for the stock with a price target of $235. If you think Nvidia is too expensive to buy, consider AMD before it becomes too hot to touch.
Palantir Technologies (PLTR)
Palantir (NYSE:PLTR) was once known as a highly secretive business that worked for the government. Over the past decade, the company has taken giant strides in the industry and has achieved profitability.
It reported the first-ever quarter of positive net income in the fourth quarter and saw a significant improvement in numbers. The company has bagged 103 deals in the quarter, and an increase in commercial clients drives the growth.
One major driving force for the company is its Artificial Intelligence Platform (AIP), which is used for data analysis and recommending the right business actions and processes. The company’s boot camps for clients have helped convert leads into deals.
It saw a 32% YOY rise in the commercial business and an 11% rise in government revenue. The customer count was up 35% YOY. Its total revenue stood at $608 million; for the current quarter, it is expecting a revenue from $612 to $616 billion.
Its fourth-quarter results have proved that AIP is a success with the clients and could bring in significant revenue in the coming years. We could also see strong profitability in the following quarters. Trading at $24 today, the stock looks highly overlooked to me and could double your money.
I have repeatedly recommended Palantir, but having proved its worth, it is a strong buy now. Palantir is a safe stock that has been steadily growing and is up 48% year to date. Already successful in the government industry, Palantir is making its mark in the commercial sector.
After the AIPCon event last week, Wedbush analysts raised the stock’s price target from $30 to $35 with an Outperform rating.
Amazon (AMZN)
Known as one of the best e-commerce companies globally, Amazon (NASDAQ:AMZN) is one of the top AI stocks, and investors aren’t looking at its AI prowess when they look at the company. The company has a diversified business and holds a presence across multiple industries. Amazon Web Services (AWS) is a solid revenue generator for the company. It saw a 13% YOY increase in revenue in the fourth quarter.
AWS holds a large market share and has generated billions in revenue from the segment. In the fourth quarter, the AWS revenue was $24.2 billion and $91 billion for the year. It is a strong segment and highly reliable.
Amazon has been using AI for many years and has helped strengthen the cloud platform. Trading at $175 today, the stock looks overlooked to me and has a lot of space for growth. It is up 16% year to date and 89% in the year. The stock is still trading lower than AMD stock. The company has an attractive valuation and is an ideal long-term play.
Whether you look at Amazon as an e-commerce or an AI stock, it is worth adding to your portfolio. AMZN is a Wall Street favorite today with the majority of Buy ratings. AMZN stock could keep soaring higher in the coming months.
On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
