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2 Artificial Intelligence (AI) Stocks That Could Go Parabolic


Demand for artificial intelligence (AI) services has surged over the past year, prompting countless technology companies to pivot their operations into emerging areas. The launch of OpenAI’s ChatGPT has reignited interest in artificial intelligence and highlighted how far the technology has come.

Grand View Research predicts that the artificial intelligence market is expected to grow at a compound annual growth rate of 37% until at least 2030, when its value will reach nearly $2 trillion. Artificial intelligence has the potential to advance countless industries as the technology continues to evolve. Used in consumer technology, cloud computing, autonomous vehicles, machine learning and other fields.

So there are dozens of ways to invest in artificial intelligence and profit from the market’s long-term expansion, and here are two artificial intelligence stocks that could go parabolic.

1.Intel

It’s not easy to be a Intel (NASDAQ: INTC) The company has encountered some obstacles in recent years.

For at least a decade, Intel has held more than 80% of the central processing unit (CPU) market and is the dominant chip supplier appleThe MacBook line has been around for years. But the tech giant’s dominance has allowed it to become complacent, leaving it vulnerable to more innovative rivals.

chip rivals Advanced Micro Devices In 2017, it began to gradually erode Intel’s CPU market share, which has now dropped to 63%. Then in 2020, Apple severed its relationship 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, the fall from grace seems to have reignited Intel’s ire, and it has been making moves to come back strong in the coming years. In June last year, Intel announced a “fundamental shift” in its business and adopted an in-house foundry model, which it believed would help it save $10 billion by 2025.

In addition, Intel has invested heavily in artificial intelligence. In December 2023, the company launched a series of artificial intelligence chips, including Gaudi3, Graphics Processing Unit (GPU) Similar products designed to challenge market leaders NvidiaIntel also showed off new Core Ultra processors and Xeon server chips, which include neural processing units for running artificial intelligence programs more efficiently.

Intel still has a long way to go before it can catch up with its competitors in artificial intelligence. However, it’s on a promising path that could deliver significant returns over the long term, and earnings per share (EPS) estimates support its massive potential.

INTC earnings per share forecast chart for the next two fiscal years

INTC earnings per share forecast chart for the next two fiscal years

The chart suggests that Intel’s earnings over the next two fiscal years could be closer to $3 per share.multiply that number by The company’s forward price-to-earnings ratio (P/E) With a ratio of 31, the stock price is $91. As things stand, these forecasts could send Intel’s stock price soaring 112% by fiscal 2026. As its position in artificial intelligence continues to expand, Intel is a stock to buy now.

2. Advanced Micro Devices

If you want to invest in artificial intelligence, you can’t have too many chip stocks in your portfolio. These companies are developing the hardware needed to train and run artificial intelligence models. AMD is an attractive investment choice – it currently has the second-largest GPU market share and is gradually expanding in the AI ​​field.

In December last year, AMD launched its new MI300X AI GPU.The chip is designed to compete directly with Nvidia’s products and has already attracted the attention and signings of some of the biggest players in tech. Microsoft and meta platform as a customer.

AMD’s financial reports do not yet reflect its investments in artificial intelligence. However, its most recent quarterly earnings report suggests it’s heading in the right direction. In the fourth quarter of 2023, AMD’s revenue increased by 10% year-on-year to US$6 billion, exceeding analysts’ expectations by approximately US$60 million. Revenue from the company’s data center division, which focuses on artificial intelligence, grew 38%.

In addition to AI chips, AMD is also diversifying its market position by entering the AI-driven PC field. Research firm IDC said it expects PC shipments to grow significantly this year, and AI integration will be a key catalyst. A report from Canalys predicts that 60% of all PCs shipped in 2027 will support artificial intelligence.

AMD earnings per share forecast chart for the next two fiscal yearsAMD earnings per share forecast chart for the next two fiscal years

AMD earnings per share forecast chart for the next two fiscal years

Data provided by Y chart

AMD’s earnings are expected to reach $7 per share over the next two fiscal years. Following a similar calculation to Intel’s, multiplying that number by AMD’s forward price-to-earnings ratio of 49 gives a stock price of $345. As things stand now, AMD’s stock price will soar 92% by fiscal 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 factors:

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Randi Zuckerberg is the former director of market development and spokesperson for Facebook, the sister of Meta Platforms CEO Mark Zuckerberg, and a board member of The Motley Fool. Danny Cook There are no positions in any stocks mentioned. The Motley Fool owns and recommends Advanced Micro Devices, Apple, Meta Platforms, Microsoft and Nvidia. The Motley Fool recommends Intel and recommends the following options: Long January 2023 Intel $57.50 call, Long January 2025 Intel $45 call, Long January 2026 $395 call, Short January 2026 Microsoft call $405, short May 2024 Intel call options at $47. disclosure policy.

2 Artificial Intelligence (AI) Stocks That Could Go Parabolic Originally published by The Motley Fool



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