The artificial intelligence (AI) boom promises to create wealth-building opportunities for forward-thinking investors. Providers of AI infrastructure and applications can be particularly attractive investments, as they are likely to benefit disproportionately from the growth of the technology industry.
AI leaders moving forward Stock split You could receive an additional payment. Splits may not change the fundamental value of the business, but investors view them as a vote of confidence from management about the company's prospects. Stocks that split tend to perform well and often go on to make new highs.
If you're looking to buy some high-quality AI stocks that could elect a stock split in the near future, read on.
Potential Stock Split #1: Super Micro Computer
Nvidia's (Nasdaq: NVDA) Modern semiconductor technology has helped usher in the artificial intelligence explosion. In return, the chip maker's stock price rose. Super micro computer (Nasdaq: SMCI) It provides high-performance servers and data storage systems that go hand-in-hand with Nvidia's popular AI chips — and its shares have performed better than the tech giant's so far this year.
The company — known as Supermicro — grew at an impressive pace last quarter. Sales for the period ending March 31 rose 201% year over year to $3.9 billion. Earnings per share rose 329% to $6.56.
Supermicro's close relationships with Nvidia and rapid pace of innovation enable the AI hardware manufacturer to outperform its competitors. Supermicro has been quick to market with its liquid-cooled AI SuperClusters for Nvidia's new Blackwell AI computing platform. Easily scalable data center systems help speed up training of AI models Deduction While also reducing energy costs.
“Supermicro has designed Nvidia's edge computing and networking solutions, enabling the world's trillion-dollar data centers to be optimized for the age of artificial intelligence,” Nvidia CEO Jensen Huang said in a press release announcing Supermicro's new SuperClusters on June 4. .
Given Sterling's recent operating performance and exciting growth potential, you might think that Supermicro shares would trade near all-time highs. But this is not the case today. Its once-high share price has tumbled recently and is now roughly 37% below its 52-week highs.
Here lies your chance. Supermicro shares can now be had for less than 23 times its expected earnings in 2025. That's an attractive price for an AI star that's expected to grow earnings by 62% annually over the next half-decade.
Moreover, with its stock price at nearly $800, Supermicro may soon decide to split its stock to make it more accessible to ordinary investors. This could help spark a spike in its stock price that would send it back higher.
Potential Stock Split #2: Palo Alto Networks
In addition to high-performance hardware, cybersecurity is a vital component of any effective AI strategy. Palo Alto Networks (NASDAQ:BANO) It is a leading provider of critical cloud security services, and AI is set to fuel its growth.
Artificial intelligence requires data. Protecting that data is of the utmost importance. Failure to do so could result in loss of customer trust, huge regulatory fines, and other costly financial penalties.
In contrast, global demand for cybersecurity solutions will reach $500 billion by the end of the decade, according to Grand View Research. Meanwhile, consulting giant McKinsey expects the market for products and services that protect the digital economy to eventually grow to $2. Trillion.
Palo Alto Networks is one of the best companies in this thriving industry. It offers a wide range of tools, such as next-generation firewalls and advanced threat prevention services, delivered through one unified platform. This unified approach helps reduce complexity and speed up incident response times for customers.
Its size is another strong competitive advantage. With over 80,000 business customers, Cyber Sentinel has more data to analyze. This helps its machine learning technology grow smarter. As soon as its AI platform detects a new threat, it immediately updates its defenses.
Palo Alto clearly has a promising long-term future. It could also receive a near-term upside from a potential stock split. Like Supermicro, its shares trade at a relatively high price of around $300. The company elected to split its stock again in 2022 to make it more accessible to potential shareholders. Doing so again today could boost demand for its shares among retail investors, which could help put its stock price on a path to reaching new highs.
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Joe Tenbroso He has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia and Palo Alto Networks. The Motley Fool has Disclosure policy.
Stock Split Watch: Two Artificial Intelligence (AI) stocks to buy now that appear to be ready to split Originally published by The Motley Fool
