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In the dynamic stock market landscape of 2023, Artificial Intelligence (AI) emerged as the pivotal buzzword. Stocks featuring AI in their name or press releases experienced significant surges. Contrary to any expectations of a departure from the AI trend, the revolution is just commencing, coinciding with projections of interest rate cuts by the US Federal Reserve. Amidst this backdrop, numerous stocks in the AI space are poised to yield exceptional returns. Noteworthy are the following five stocks, each holding substantial potential for stellar returns through their AI endeavors. Excluded from this list is Nvidia, the indisputable leader in this arena. As the market anticipates further volatility, these AI-centric stocks present compelling opportunities for investors to explore and potentially outperform.’
10 Best AI Stocks to Buy in 2024
5 Best AI Stocks To Buy In 2024
AMD
AMD shares didn’t do as well as market leader Nvidia, gaining around 115% in 2023 but all that could change in 2024. In December 2023, AMD launched its AMD Instinct MI300 Series accelerators,a direct competitor to Nvidia’s H100 series. AMD says, the MI300 “…are uniquely well-suited to power even the most demanding AI and HPC workloads, offering exceptional compute performance, large memory density, high bandwidth memory, and support for specialized data formats.” A key customer here is Microsoft that is going to use these in Azure and this could give a boost to ChatGPT’s dominance. If this clicks, the MI300 will become a major alternative to Nvidia H100. Meta is also using MI300X for AI inferencing. 2024 could be the year AMD emerges as a serious contender to Nvidia.
It also launched the Ryzen 8040 series processors. These are designed for AI PCs that will release this year. AMD Wants to infuse AI in desktops and workstations, to improve business productivity and collaboration, boost creativity, and offer security features.
Amazon
Imagine having a ChatGPT-like experience while chatting with Alexa? Well, that could become a reality if Amazon realizes its generative AI ambitions in 2024. In a CNBC interview, he said, “Generative AI is going to change every customer experience, and it’s going to make it much more accessible for everyday developers, and even business users, to use.” He added, “If you’ve studied generative AI and you’re still scoffing, you’re really not paying attention,” Jassy said. “We think we have a real opportunity to be the leader there, and we’re in the process of building a much more expansive large language model underneath Alexa that will make her both much more knowledgeable and much more conversational.”
On the commercial front, there’s tremendous scope for AI with AWS. The cloud computing sector is key for AI tech, as workload demands, and training and executing models see increasing demand. AWS sales for Q3 2023 increased 12% year-over-year to $23.1 billion. AI will keep playing a more important role in Amazon’s scheme of things, and that is a good thing for AI and Amazon investors.
Super Micro Computer
Super Micro is an alternative to Nvidia, and it has actually beaten the limelight hogger in 2023, growing 250% to Nvidia’s 236%. Super Micro’s business models kicks in after Nvidia produces GPUs. These GPUs have to be placed in data center servers. Super Micro builds and runs data centers on which chips made by Nvidia, AMD, and Intel run. All these chip manufacturers are also Super Micro customers. And Super Micro ensures that it works closely with its customers. For instance, collaborating closely with Nvidia, Super Micro fine-tunes its architecture to optimize performance. Super Micro also customizes servers for purchase, catering to diverse applications such as game development, generative AI, engineering simulations, and drug discovery. This ensures clients can tailor their systems to specific needs within high-performance computing.
The company’s numbers for Q1 fiscal year 2024 missed estimates. Net sales came in at $2.12 billion, a drop from $2.18 billion in Q4 fiscal 2023, and net income was $157 million compared to $194 million. However, the market still believes that the stock is a cheap buy in the AI space considering it trades at just 17 times its 2024 earnings estimates.
SentinelOne
Nearly every company globally is going digital or heavy on tech. Businesses are expediently embracing cloud-based software solutions, migrating data and applications to the cloud to enhance performance and efficiency while simultaneously reducing costs. This has led to a corresponding surge in cybersecurity risks. SentinelOne is a small company that has been battered down since hitting a high of $66 in October 2021. It’s now at $24 levels.
SentinelOne’s presents its Singularity platform as a comprehensive solution suitable for businesses of all sizes. It delivers cloud security, identity protection, and endpoint defense. The company prioritizes automation, leveraging the speed of machines to respond swiftly to emerging threats. Singularity Cloud Workload Security employs AI-powered tools, including the Behavioral AI Engine, actively constructing detailed storylines around potential breaches. This proactive technology empowers managers with comprehensive reports, facilitating rapid tracing of attacks to their origins. Unique features such as One-Click Rollback enable organizations to restore digital assets to a pre-attack state after neutralizing breaches. The recent introduction of Purple AI, an AI-powered chatbot, elevates SentinelOne’s AI capabilities, expediting workflows, and efficiently hunting for threats with a single prompt from cybersecurity managers, thereby mitigating alert fatigue and streamlining incident summaries.
The company’s Q3 fiscal year 2024 revenue increased 42% to $164.2 million. Projected revenues for Q4 are $169 million and it has $1.1 billion in cash and equivalents. This stock is primed to win.
Alphabet
Alphabet is probably the most surprising entrant on this list. Home to the world’s most visited websites, Google and YouTube, Alphabet revolutionized digital advertising (revenues of almost $60 billion every quarter), yielding substantial sales and profits. Despite challenges from competitors like Instagram and TikTok, Alphabet found resilience through a strategic focus on artificial intelligence (AI). Recognizing AI’s transformative potential, the company introduced Gemini, a ChatGPT competitor, and is systematically integrating AI across its diverse portfolio, spanning productivity tools and cloud infrastructure. In 2023, Alphabet also launched Google DeepMind, a specialized team focused on advancing AI systems for upcoming products and services. Within search, the integration of generative AI aims to broaden the spectrum of inquiries users can pose to Google. This expansion is poised to enhance the relevance of search results, ultimately fostering revenue growth in advertising. Amidst shifts in advertising dynamics, Alphabet’s commitment to AI positions it as a forward-looking investment in a rapidly evolving tech landscape.
Conclusion
AI (Artificial Intelligence) has taken the world by storm and many larger and smaller companies are trying to break into this space. Much is to change over the upcoming years and newer players will likely enter the market, however, the mentioned companies have a great chance at being stronger contenders to keep market share.
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