There are many ways to get involved in the artificial intelligence (AI) craze. Many investors are looking to an AI hardware designer NvidiaWhich makes the former video game accelerator company one of the most valuable companies in the world.
Nvidia is a great company, but the stock price may have risen too high, too quickly. There are more plausible ideas for artificial intelligence at the moment. Let me tell you why IBM (NYSE: IBM), Micron technology (NASDAQ: MU)and Fiver International (NYSE: FFR) It looks to me like stronger investments in AI in the fall of 2024.
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This trio may not be the most obvious AI investments on the market. But they have deep connections to the growing AI market, just from slightly unusual angles:
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IBM allows other companies to focus on consumer-friendly AI tools and services while doubling down on enterprise-level variants instead. Features like auditable data flows and integration with business intelligence tools don’t write headlines, but they inspire long-term service contracts with deep-pocketed companies. as a result of, Big Blue’s generative AI platform already has $3 billion worth of service contractsThis was less than two years after its launch.
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Micron does not make AI accelerators. It designs and manufactures high-speed memory chips instead. The massive systems that train generative AI platforms and then run them require huge amounts of memory, as do the next generation of smartphones being launched with their own AI features. Micron chips are in high demand thanks to these AI-based communications.
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Fiverr doesn’t work on the infrastructure side of the AI boom, but it does leverage generative AI in two different ways. The company’s platform for matching freelancers with independent service buyers makes extensive use of various artificial intelligence technologies. The company also sells standalone AI-related services to a wide range of clients — these AI systems won’t build or run themselves, and it takes a human touch to extract business value from generative AI tools. AI-related services have become a major growth driver for Fiverr.
|
Artificial Intelligence Stocks |
Two-year total return |
Price to free cash flow |
Forward price to earnings |
|---|---|---|---|
|
Nvidia |
848% |
76.5 |
33.9 |
|
IBM |
58% |
15.8 |
20.0 |
|
Micron |
70% |
901.4 |
7.7 |
|
Fiver |
(18%) |
13.9 |
11.6 |
Data collected from YCharts and Finviz on November 21, 2024.
Nvidia has crushed the rest of the stock market since introducing its flagship client OpenAI ChatGPT Almost exactly two years ago. That’s great for long-time Nvidia owners, but the rapid gains have left the stock hanging at uncomfortably high valuations. No matter how you slice it, Nvidia stock is perfectly priced. The chart may still point higher from here, but there is a real risk of painful price corrections if Nvidia doesn’t hold on to its early lead in AI accelerators.
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