Beyond Nvidia: Top AI Stocks to Buy Right Now
Saturday, Nov 23, 2024 7:44 am ET
4min read In the rapidly evolving world of artificial intelligence, Nvidia has long been the go-to stock for investors seeking exposure to the sector. However, there are plenty of other AI-focused companies worth considering. This article highlights some of the top AI stocks to buy right now, excluding Nvidia.
As AI continues to permeate various industries, companies are investing heavily in AI technology to stay competitive. Microsoft (MSFT), for instance, has made significant strides in AI through its partnership with OpenAI. Microsoft's AI business is projected to cross a $10 billion annual revenue run rate in the second quarter, making it the fastest-growing business in the company's history. Additionally, Microsoft's Azure and other cloud services grew revenue by 33% year over year in the first quarter, with AI services accounting for roughly 12 percentage points of this growth.
Microsoft is not the only company capitalizing on AI's potential. Meta Platforms (META), the parent company of Facebook and Instagram, has also embraced AI to enhance user engagement and ad effectiveness. The company's AI-powered recommendation system has helped increase time spent on Facebook and Instagram by 8% and 6%, respectively. Moreover, over 1 million advertisers are using Meta's generative AI tools to create advertisements, resulting in a 7% increase in ad conversions.
Micron Technology (MU), a semiconductor company, is another AI-related stock worth considering. Micron's products, such as DRAM and NAND flash, are in high demand due to their use in AI applications. The company's strong financial performance, with revenue and net income increasing at a double-digit rate, reflects the growth potential in AI-related markets.
To better understand the valuation of these AI stocks, let's compare their P/E ratios to other technology companies. Consensus Cloud Solutions (CCSI), Weibo Corp. (WB), and Honda Motor Co., Ltd. (HMC) are trading at relatively low P/E ratios, suggesting they may be undervalued compared to their peers.
12-Month Trailing P/E Ratio
Stock
1. Consensus Cloud Solutions (CCSI) 3.6
2. Weibo Corp. (WB) 6.8
3. Honda Motor Co., Ltd. (HMC) 6.9
4. Microsoft Corp. (MSFT) 28.0
5. Alphabet Inc. (GOOGL) 25.2
6. Amazon.com Inc. (AMZN) 41.4
7. Meta Platforms Inc. (META) 16.5
While Nvidia remains a dominant player in the AI chipset market, these companies demonstrate the broad range of AI applications and investments across various sectors. By focusing on AI applications and services, rather than hardware alone, these companies tap into the broader AI ecosystem and offer investors compelling alternatives to Nvidia.
As the AI market continues to grow and evolve, it is essential for investors to stay informed about the latest trends and opportunities. By considering a diversified portfolio of AI stocks, investors can benefit from the sector's explosive growth while mitigating risks.
As AI continues to permeate various industries, companies are investing heavily in AI technology to stay competitive. Microsoft (MSFT), for instance, has made significant strides in AI through its partnership with OpenAI. Microsoft's AI business is projected to cross a $10 billion annual revenue run rate in the second quarter, making it the fastest-growing business in the company's history. Additionally, Microsoft's Azure and other cloud services grew revenue by 33% year over year in the first quarter, with AI services accounting for roughly 12 percentage points of this growth.
Microsoft is not the only company capitalizing on AI's potential. Meta Platforms (META), the parent company of Facebook and Instagram, has also embraced AI to enhance user engagement and ad effectiveness. The company's AI-powered recommendation system has helped increase time spent on Facebook and Instagram by 8% and 6%, respectively. Moreover, over 1 million advertisers are using Meta's generative AI tools to create advertisements, resulting in a 7% increase in ad conversions.
Micron Technology (MU), a semiconductor company, is another AI-related stock worth considering. Micron's products, such as DRAM and NAND flash, are in high demand due to their use in AI applications. The company's strong financial performance, with revenue and net income increasing at a double-digit rate, reflects the growth potential in AI-related markets.
To better understand the valuation of these AI stocks, let's compare their P/E ratios to other technology companies. Consensus Cloud Solutions (CCSI), Weibo Corp. (WB), and Honda Motor Co., Ltd. (HMC) are trading at relatively low P/E ratios, suggesting they may be undervalued compared to their peers.
12-Month Trailing P/E Ratio
Stock
1. Consensus Cloud Solutions (CCSI) 3.6
2. Weibo Corp. (WB) 6.8
3. Honda Motor Co., Ltd. (HMC) 6.9
4. Microsoft Corp. (MSFT) 28.0
5. Alphabet Inc. (GOOGL) 25.2
6. Amazon.com Inc. (AMZN) 41.4
7. Meta Platforms Inc. (META) 16.5
While Nvidia remains a dominant player in the AI chipset market, these companies demonstrate the broad range of AI applications and investments across various sectors. By focusing on AI applications and services, rather than hardware alone, these companies tap into the broader AI ecosystem and offer investors compelling alternatives to Nvidia.
As the AI market continues to grow and evolve, it is essential for investors to stay informed about the latest trends and opportunities. By considering a diversified portfolio of AI stocks, investors can benefit from the sector's explosive growth while mitigating risks.
Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.