Prefer to view this content on our website? Click here.
Dear Fellow Investor,
With the AI Party Far from Over, Buy These 3 Oversold Stocks
Over the last few days, AI stocks plunged.
Valuations have gotten a bit frothy. A recent report from MIT said that about 95% of company generative AI pilot programs resulted in “little to no measurable impact,” on revenue or profits, as highlighted by Fortune.com. OpenAI CEO Sam Altman says AI is in a bubble, but he’s still ready to aggressively spend on Ai infrastructure.
But AI isn’t going away. It’s just taking a breather.
In fact, according to Wedbush analyst Dan Ives, the party is far from over.
“Ives said that, although some names in the AI sphere — such as OpenAI CEO Sam Altman — have warned of overexuberance from investors about the technology, in his view, ‘the AI party ... started at 9pm. It’s now 10pm. That party goes to 4am,’” as quoted by CNBC.
With that, Ives still believes tech heavyweights, such as Microsoft, Amazon, Google, Nvidia, Tesla, and Meta will be some of the top standout winners.
And we have to consider that some of the biggest companies in the world are spending more.
Alphabet just announced it will boost its capital-expenditure forecast for the year to $85 billion from $75 billion. Even better, Meta, Amazon, Alphabet, and Microsoft intend to spend about $320 billion on AI technologies and data centers this year, as compared to the $230 billion capex in 2024. Plus, as noted by UBS, AI capex is expected to explode even higher, potentially reaching hundreds of billions of dollars a year.
So, what’s the best way to trade the AI pullback?
Here are three ways.
Company: Advanced Micro Devices (SYM: AMD)
AMD continues to be a standout stock for the AI boom.
Since April, AMD ran from a low of about $80 to a recent high of $186.65.
Now back to $163.71, it’s still challenging Nvidia for chip dominance. Helping, the company is exposed to a multi-billion-dollar addressable market for data center AI chips. In fact, according to company Chair and CEO Lisa Su, that addressable market for AI chips will reach $500 billion by 2028, which is up from her prior estimate for $400 billion by the time 2027 rolls around.
Plus, the company’s latest generation of AI chips, the MI300, is its fastest ramping product ever. Lisa Su added that AMD’s MI300X chip (which rivals dominant AI chipmaker Nvidia’s H100) is “the most advanced AI accelerator in the industry,” as noted by Time.com.
Trade Algo
Is this your new #1 enemy in trading?
Imagine this scenario…You are a super-intelligent investor who can scan through millions of data, detect patterns, and execute savvy trades… in just minutes.
It would be an unfair advantage, right?
Welcome to the AI Age, where AI can make trading decisions in milliseconds.
Take Minotaur Capital as an example.
The hedge fund replaced human analysts with AI… and… ended up beating the benchmark index by more than two times.
Here's the good news...
You can get a taste of using A.I. technology to find the top momentum trades.
As a Behind the Markets reader, we’d like to offer you a SPECIAL gift where you can sign up for our SMS “dark pool alerts” for FREE.
Click here to claim FREE SMS dark pool alerts now.
Company: Palantir Technologies (SYM: PLTR)
Palantir has long been a polarizing stock. Some see it as overhyped; others view it as one of the purest AI plays in the market.
After running from about $79 to $190, Palantir Technologies pulled back to its 50-day moving average ($156.18), where it appears to have found support. From here, we’d like to see the tech giant initially retest $190, and perhaps $200 later this year.
Analysts like it, too.
Morgan Stanley, for example, raised its price target to $155 from $98, noting that, “the third quarter revenue guidance targets +50% year-over-year growth while 2025 revenue growth guidance raised by 9 points to +45% from +36% prior, with operating margin of 46% are best-in-class and underscores status as one of the clear AI winners,” as quoted by Seeking Alpha.
Piper Sandler, which has an Overweight rating on Palantir, raised the price target on the stock to $182 from $170. Analysts say PLTR’s 10-year $10 billion Army deal only strengthens the case for further government share gains within the large $1T+ Defense Total Addressable Market, as also highlighted by Seeking Alpha.
ETF: Global X Artificial Intelligence & Technology ETF (SYM: AIQ)
Or, if you want to diversify at a lower cost, there are ETFs like the AIQ ETF.
With an expense ratio of 0.68%, the ETF invests in companies that potentially stand to benefit from the further development and utilization of artificial intelligence (AI) technology.
Some of its top holdings include Palantir, Oracle, Broadcom, Netflix, Nvidia, Microsoft and Meta Platforms to name a few of its 86 total holdings. Since bottoming out in April at around $31, the AIQ ETF is now up to $43.88. From here, we’d like to see the AIQ ETF closer to $60.
Are there any other AI stocks you've been buying shares of recently? What other sectors of the market you think are on their way up right now? Hit "reply" to this email and let us know your thoughts!
No comments:
Post a Comment