2 More Under-the-Radar AI Stocks to Consider
If you think AI is a bubble right now, you might want to reconsider your stance. This is not to say that AI stock valuations have gone overboard because they have. But I believe that the paradigm shift in technology and efficiencies that AI provides is a lot different from other stock market bubbles. AI is likely here to stay and is already being incorporated by the largest companies in the world.
I don’t like to toot my own horn usually but the last time I wrote an article like this was back in February. The two stocks I recommended? Palantir (NYSE: PLTR) and NVIDIA (NASDAQ: NVDA). This was when NVIDIA had only gained about 45% so far this year. We know what it’s done since then. Palantir itself has doubled and looks to finally be on track to being a profitable company. It’s not rocket science, but spotting trends before they happen is a priceless skill to have for an investor. So without further ado, here are two more AI-related stocks that I think have the chance to skyrocket.
Snowflake (NYSE: SNOW)
I find that Snowflake is a polarizing stock, primarily because most people do not really understand what it does. Snowflake is all about cloud computing and data analytics but at hyper speed. It is data storage and analysis all in one piece of software and is considered by many to be the industry leader already. Snowflake has seen its stock rise by a modest 35% so far in 2023. That is dwarfed by the 155% and 200% respective growths from Palantir and NVIDIA this year. The stock is still trading at a 50% discount from its all-time high prices. Why is that significant? Because the first wave of stocks returning to all-time high prices were the mega-cap tech stocks like NVIDIA and Apple (NASDAQ: AAPL). If this is a true bull market, the next wave of companies should be the high-growth businesses that thrive in a lower interest rate environment. Snowflake hasn’t even spoken much about AI yet but as companies continue to rely on the technology, companies like Snowflake will see a rise in demand for its products, particularly data warehouses that can prepare data and build ML models with ease.
Taiwan Semiconductor Manufacturing Company (NYSE: TSM)
Although Warren Buffett says to be greedy when others are fearful, does that apply after he himself sells a stock? Buffett ditched his position in TSM earlier this year due to concerns over geopolitical tensions with China. This has led to some unusual volatility for TSM, although the stock is still up by more than 40% this year. Still, check the sentiment on the company and you would think that TSM was on the verge of going bankrupt. As the primary supplier and manufacturer of chips for NVIDIA, AMD (NASDAQ: AMD), and Apple, TSM finds itself as one of the most important companies in the AI boom. Still, there isn’t much bullishness surrounding the stock right now. If the tensions with China are overblown, we could be buying shares of TSM at a massive discount to what it could be trading at a few years from now.
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