[ad_1]
Demand for artificial intelligence (AI) services has skyrocketed over the past year, prompting countless technology companies to pivot their businesses to the emerging field. His announcement of OpenAI’s ChatGPT reignited interest in AI and highlighted how far this technology has come.
According to Grand View Research, the AI market is expected to grow at an average annual rate of 37% through at least 2030, reaching nearly $2 trillion. AI has the potential to boost countless industries as it applies to areas such as consumer technology, cloud computing, self-driving cars, and machine learning.
As a result, there are dozens of ways to invest in AI and benefit from the market’s long-term expansion. Here are two artificial intelligence stocks that have the potential to go parabolic.
1. Intel
It wasn’t easy to be intel (NASDAQ:INTC) The company has faced several obstacles in recent years.
Intel has been the leading chip supplier for at least a decade, controlling more than 80% of the central processing unit (CPU) market. apple‘s long-standing MacBook lineup. But the tech giant’s dominance has left the company complacent and vulnerable to more innovative competitors.
chip rival Advanced Micro Devices began slowly eroding Intel’s CPU market share in 2017, and its share has now fallen to 63%. And in 2020, Apple severed ties with Intel in favor of more powerful in-house hardware designs. As a result, Intel’s stock price has fallen about 35% over the past three years.
However, that downfall seems to have reignited the fire at Inter’s management, and they are poised to come back strong in the coming years. Last June, Intel announced a “fundamental shift” in its business, adopting an in-house foundry model that it believes will lead to savings of $10 billion by 2025.
Additionally, Intel is investing heavily in AI. The company debuted a variety of AI chips in December 2023, including his Gaudi3, a graphics processing unit (GPU) designed to compete with similar products by market leaders. Nvidia. Intel also showed off new Core Ultra processors and Xeon server chips, which include neural processing units to run AI programs more efficiently.
Intel has a mountain to climb to catch up with rivals in the AI space. However, it’s on a promising path that could pay off big in the long run, and its earnings per share (EPS) estimates support its strong potential.
This chart shows that Intel’s earnings could reach nearly $3 per share over the next two fiscal years. Multiplying this number by the company’s forward price/earnings ratio (P/E) of 31 yields a stock price of $91. Looking at its current position, Intel stock could rise 112% by his fiscal year 2026, according to these projections. Intel is currently a hot buy due to its growing position in the AI space.
2. Advanced microdevices
If you’re looking to invest in AI, you can’t have too many chip stocks in your portfolio. These companies develop the hardware needed to train and run AI models. AMD is an attractive investment option. AMD currently holds the second-largest market share in GPUs and is gradually expanding in the AI space as well.
Last December, AMD announced its new MI300X AI GPU. The chip is designed to compete directly with his Nvidia products and has already attracted the attention and contracts of some of the technology industry’s most prominent players. microsoft and meta platform as a client.
AMD’s earnings don’t yet reflect its AI investments. However, recent quarterly results suggest the company is moving in the right direction. AMD’s revenue for the fourth quarter of 2023 rose 10% year over year to $6 billion, beating analysts’ expectations by about $60 million. The company’s AI-focused data center division posted 38% revenue growth.
In addition to AI chips, AMD is diversifying its market position by expanding into AI-powered PCs. According to research firm IDC, PC shipments are expected to increase significantly this year, with AI integration acting as a key catalyst. Additionally, a report from Canalys predicts that 60% of all PCs shipped in 2027 will be AI-enabled.
AMD’s earnings are expected to reach $7 per share over the next two fiscal years. Using a similar calculation for Intel, multiplying this number by AMD’s forward P/E ratio of 49 results in a stock price of $345. From its current position, AMD’s stock price will rise 92% by 2026. Like Intel, AMD’s stock price could go parabolic if all goes well.
Should you invest $1,000 in Intel right now?
Before buying Intel stock, consider the following:
of Motley Fool Stock Advisor Our analyst team has identified what they believe Best 10 stocks What investors can buy right now…and Intel wasn’t among them. These 10 stocks have the potential to generate impressive returns over the next few years.
stock advisor We provide investors with an easy-to-understand blueprint for success, including guidance on portfolio construction, regular updates from analysts, and two new stocks every month.of stock advisor Since 2002, the service has more than tripled S&P 500 returns*.
See 10 stocks
*Stock Advisor returns as of March 25, 2024
Randi Zuckerberg is a former head of market development and spokesperson at Facebook, sister of Meta Platforms CEO Mark Zuckerberg, and a member of the Motley Fool’s board of directors. Dani Cook has no position in any stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends Intel and recommends the following options: Long January 2023 $57.50 calls on Intel, Long January 2025 $45 calls on Intel, Long January 2026 $395 calls on Microsoft, Short January 2026 $405 calls on Microsoft. call, and a May 2024 $47 short call. Intel. The Motley Fool has a disclosure policy.
“2 Artificial Intelligence (AI) Stocks That Could Go Parabolic” was originally published by The Motley Fool.
[ad_2]
Source link
