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The stock market has been volatile this year, and it's anyone's guess how things will continue to play out. If there's a recession, then the S&P 500 and stocks as a whole could be headed for even more pain in the months ahead.
But one thing that seems certain is that artificial intelligence (AI) is going to remain a great area of tech to invest in over the long haul. And rather than trying to time the markets, now could be a good time to simply buy a top AI stock and take advantage of some cheaper prices and discounted valuations, before a recovery takes place.
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Three such stocks that have a lot of room for growth and that you may want to consider buying right now are Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL), Advanced Micro Devices (NASDAQ: AMD), and ASML Holding (NASDAQ: ASML). Here's why they look like great buys.
Alphabet may be one of the most underrated AI stocks, which is why I place it atop this list. As of Monday, its shares were down 16% year to date.
When it comes to AI, the big thing is data, and Alphabet has a ton of it through YouTube and Google Search. It has some tremendous opportunities there to learn from the data it has on those assets from the searches people do, and it can use its Gemini chatbot to add a lot of value to those platforms.
To get Alphabet's stock at just 20 times trailing earnings, given all the potential it has with AI, seems like a steal of a deal. The company generated $100 billion in profit last year, which was 29% of revenue.
If you're bullish on AI, this is one stock that should definitely be on your buying list.
Advanced Micro Devices, better known as AMD, is the next-best AI stock I think is worth buying. It hasn't gotten a lot of love from investors because big-name rival Nvidia has been dominating the chip market. But investors shouldn't forget that these are still the early stages of AI, and while Nvidia is winning early on, you shouldn't count out AMD in the long run.
It may not be able to overtake Nvidia, but at the very least, it could carve out significant market share, especially as more companies invest in AI. Even if Nvidia can keep up with the demand, businesses might want to diversify and not be reliant solely on one chip vendor, and they might want cheaper alternatives as well.
CEO Lisa Su expects the company's AI chip revenue to grow to tens of billions of dollars in the years ahead. That's significant for a business with $25.8 billion in total revenue for all of 2024.