AI accelerator kingpin Nvidia (NASDAQ:NVDA) pretty much ended big tech’s earnings season with a thunderous bang. Even in the face of elevated estimates, Jensen Huang’s GPU firm continued to impress the crowd. When it comes to the AI run, it still seems to be full speed ahead. If I had to guess, Nvidia has a couple more positive surprises up its sleeves for future quarters as it finds more ways to fly. As Nvidia leads the charge in the AI revolution, there are cheap stocks cashing in on the craze which you can buy to make a clean profit.
Indeed, not every company has been able to pull off a rally-inducing quarter this earnings season. Some companies have fallen flat and could be at risk of further depreciation into year’s end. Though catching falling knives post-earnings can be a dangerous game, I do think the following names make sense to monitor while they’re oversold.
Who knows? Perhaps shareholders in such firms had lost their patience and jumped ship to Nvidia after its latest blowout. After all, why settle for an ailing performer when you could punch your ticket to a frontrunner in the fourth industrial revolution? In any case, the following trio is worth consideration if you seek great discounts in firms that are still worth owning through their temporary fumbles.
Top Cheap Stocks: Intuit (INTU)
Intuit (NASDAQ:INTU) is the financial software developer behind popular offerings such as QuickBooks and TurboTax. The company has been actively investing in generative AI initiatives to enhance its offering and remove some of the clouds from the rather hazy world of small business and personal finances. Indeed, dealing with one’s finances can be rather complex—a problem that Intuit can better solve with an assist from generative AI.
As Intuit doubles down on AI, there’s a glorious opportunity to improve the industry. Of course, by changing the industry landscape via AI-powered time savers, the firm will also be able to attract more cash from its loyal customer base.
For now, I don’t think much of the AI narrative is priced in here. Not after INTU stock plummeted more than 8% last Friday after issuing underwhelming guidance after it clocked in some solid quarterly results that got a jolt from tax season.
Investors with a longer-term mindset may find value in shares here while they’re off 9% from their 52-week highs and going for 32.5 times forward price-to-earnings (P/E). If you’re looking for cheap stocks, start here.
Workday (WDAY)
Workday (NASDAQ:WDAY) is another long-term AI beneficiary that investors seem to be cashing out of lately. Last Friday, shares of the enterprise management software company nosedived over 15% following a second quarter that saw softer full-year guidance and some subscription revenues that fell just shy of analyst expectations. Indeed, the WDAY stock plunge was bad enough that even some of its enterprise cloud peers, like Salesforce (NYSE:CRM), fell in sympathy on the day.
Undoubtedly, WDAY stock has been under pressure since shares peaked in February 2024. Now down over 28% from its all-time high, I view Workday as a compelling relative bargain at around $220 per share, especially if you’re a fan of its longer-term AI-driven growth narrative. The firm has an opportunity to bolster growth as it integrates AI technologies across its existing applications, specifically in areas such as human resources (HR).
At 32.9 times forward P/E, I view Workday as getting a tad too cheap given its promising AI-driven future. This is one of the top cheap stocks.
Home Depot (HD)
Home improvement retailer Home Depot (NYSE:HD) suffered a setback when it reported earnings just over a week ago. Sales came in short of expectations while comparable sales slipped 2.8%, thanks in part to industry-specific headwinds.
As inflation cools further and homeowners have more opportunity to save up for ambitious home remodeling projects, HD stock could easily bounce back. Additionally, many consumers may find it an opportunistic time to pursue home improvement projects as various construction materials (think lumber) fall further in price. Falling prices on various goods and an upward turn in housing turnover could certainly give Home Depot a shot in the arm.
In any case, Home Depot is one of those incredibly well-run companies that one should hang onto through good times and bad. It’s a wonderful company that happens to be moving through a wobbly industry climate. In due time, things could turn on a dime, perhaps at the first signs of any shifts in consumer spending habits. Until then, investors may wish to back up the truck while the dividend yield is at a bountiful 2.77%.
On the date of publication, Joey Frenette held shares of Salesforce. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
