Missed NVIDIA?My top artificial intelligence stocks to buy and hold

Of all the “Big 7” stocks, no stock has risen even close to Nvidia Published. In the past 12 months alone (through February 6), the chipmaker’s shares have soared 221%. Perhaps there is no greater beneficiary. AI (artificial intelligence) boom.

It’s understandable if you’re worried that you’re missing out on Nvidia. But there are still reasons to be optimistic.look carefully letter (NASDAQ: Google) (NASDAQ: Google)this may be Best Artificial Intelligence Stocks Buy and hold.

Nvidia’s rise makes sense

Providing chips that power artificial intelligence use cases has been a booming business, driving Nvidia’s growth. The company’s sales in the third quarter of fiscal 2024 were $18.1 billion, more than three times the same period last year, a sign that the company is experiencing strong demand. Plus, the company’s profits are surging.

The global artificial intelligence market is expected to expand nearly ninefold over the next seven years, and Nvidia is seizing a huge opportunity to maintain growth, supporting investors’ extreme optimism about Nvidia as a smart AI infrastructure company.

But with the stock’s rapid rise, things are looking a little pricey right now.The stock trading price is P/E ratio 89.7. Regardless of the growth potential, this is still a steep price to pay for potential investors.

Alphabet is no stranger to artificial intelligence

In the fourth quarter of 2023, Alphabet reported digital advertising revenue of US$65.5 billion, an annual increase of 11%. But the figure disappointed Wall Street, and shares fell after the news was released. The stock currently trades at a price-to-earnings ratio of 24.9. For investors, this is a good entry point into a leader in artificial intelligence.

Chief Executive Sundar Pichai said more than seven years ago that Alphabet would put “artificial intelligence first.” Even before its launch in late 2022, ChatGPT has sparked a race for tech companies to launch artificial intelligence products and services.

He wrote in an October 2016 blog post: “For the past 10 years we have been working towards a mobile-first world, turning our phones into remote controls for our lives. But in the next 10 years, we There will be a shift to an AI-first world, a world where computing becomes ubiquitously available—at home, at work, in the car, and on the road—and interactions with all these surfaces become more natural and intuitive, And most importantly, smarter.”

To be fair, Alphabet has integrated artificial intelligence into its various services. In fact, the company began developing machine learning capabilities in Google search as early as 2001 to help users improve their spelling skills when searching. Today, artificial intelligence is used in maps to provide traffic information for better organization and search within photos as well as various tools provided by Google Cloud. These are just a few examples.

Looking to the future, there are more powerful artificial intelligence capabilities in the pipeline. In the cloud, the recently launched generative artificial intelligence platform Gemini helps customers build and launch their own applications for their own customers.

Alphabet is in a great position because it already has a large user base that can constantly test new features, collect data, iterate and improve. The company’s six products and services have more than 2 billion users.

It’s also helped Alphabet become incredibly profitable, generating $102 billion in revenue. operating cash flow The current net cash balance in 2023 is $98 billion. This gives it sufficient financial resources to continue pouring money into its research and development programmes. Few companies can compete with Alphabet when it comes to making large-scale investments. In this case, the strategy only strengthens the company’s already strong competitive position.

So while most investors remain fascinated by companies like Nvidia, sometimes the best way to gain exposure to revolutionary technology trends is through a company that’s taken for granted. And this looks to be Alphabet. This makes it my best AI stock to buy and hold for the long term.

Should you invest $1,000 in Alphabet right now?

Before buying Alphabet stock, consider the following factors:

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Suzanne Frey is a senior executive at Alphabet and a board member of The Motley Fool. Neil Patel There are no positions in the above stocks. The Motley Fool owns and recommends Alphabet and Nvidia. Motley Fool has disclosure policy.

Missed NVIDIA?My top artificial intelligence stocks to buy and hold Originally published by The Motley Fool

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