Top AI Semiconductor Stocks: Investors' No-Brainer Choices for 2024

3 No-Brainer Artificial Intelligence (AI) Semiconductor Stocks to Buy Now

Jose Najarro has positions in Advanced Micro Devices, Aehr Test Systems, Marvell Technology, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool recommends Marvell Technology. The Motley Fool has a disclosure policy. Jose Najarro is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.

3 No-Brainer Artificial Intelligence (AI) Semiconductor Stocks to Buy Now

In today's video, I discuss recent updates impacting Advanced Micro Devices (NASDAQ: AMD) and other semiconductor companies. Check out the short video to learn more, consider subscribing, and click the special offer link below. *Stock prices used were the after-market prices of July 19, 2024. The video was published on July 21, 2024. Should you invest $1,000 in Advanced Micro Devices right now? Before you buy stock in Advanced Micro Devices, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Advanced Micro Devices wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $722,626!* Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. Jose Najarro has positions in Advanced Micro Devices, Aehr Test Systems, Marvell Technology, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool recommends Marvell Technology. The Motley Fool has a disclosure policy. Jose Najarro is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

3 No-Brainer Artificial Intelligence (AI) Stocks to Buy With $200 Right Now | The Motley Fool

These stocks have a lot of room left to increase in value as AI-related spending grows. Artificial intelligence (AI) has been the driving force behind the current bull market run. The strong demand for AI hardware, software, and development tools and services has resulted in ballooning revenue and profits for several high-profile tech companies. But the trend may be just getting started. Generative AI spending will increase from $67 billion last year to $1.3 trillion by 2032, according to estimates from Bloomberg Intelligence. That huge and rapidly growing addressable market leaves a lot of opportunity for companies to keep expanding quickly. There are many different ways to invest in the continued growth of artificial intelligence, but it's important to avoid stocks where the price may have gotten ahead of the reality of their finances. The following three companies all present great opportunities to buy AI stocks at an attractive price, and you can invest in any of them with as little as $200. Taiwan Semiconductor Manufacturing Company (TSM -3.55%), also known as TSMC, is the leading chip manufacturer in the world. It captures the majority of orders for high-end chip designs thanks to its advanced technology. It can then use that revenue to reinvest in R&D and develop better processes for the next generation of chips, creating a virtuous cycle. Some of its biggest customers are Nvidia and Apple. The company just reported strong second-quarter earnings and better-than-expected Q3 guidance. It's no surprise that CFO Wendell Huang said the contributing factors to this outlook are "strong smartphone and AI-related demand for our leading-edge process technologies." TSMC is a secular way to invest in the growing demand for AI chips. While Nvidia currently makes the bulk of GPUs powering AI training data centers, several other companies are working on designs to displace Nvidia's chips or reduce their reliance on a single company. Regardless of who's designing the chips, TSMC is likely going to get its business thanks to its advanced technology capabilities and the virtuous cycle protecting its lead. Geopolitical factors do add some extra risk to the investment in the Taiwanese company, but at its current price, the stock looks attractive. Shares currently trade for a forward price-to-earnings ratio (P/E) of 27.2. With AI driving demand, TSMC could increase prices, expand its margins, and boost its bottom line quickly over the next few years. That would result in earnings growth that more than justifies the current valuation and the extra risk involved. Cloud infrastructure is one of the backbones of AI development, and Snowflake (SNOW 0.01%) plays a pivotal role for many large enterprises looking to leverage their cloud data for AI. The company helps enterprises using multiple public cloud services and their own servers to aggregate data into a "data lake," producing a "single source of truth." Last year, Snowflake launched Cortex AI, a platform enabling businesses to apply large language models to their own data to easily create unique generative AI applications. Cortex allows businesses to fine-tune models for their specific use cases, easily search unstructured data, and use AI to produce valuable insights. Snowflake also offers some of its own tools built with Cortex, including its Snowflake Copilot. Snowflake reported its first-quarter earnings in May. Its 34% increase in revenue was a significant slowdown from the 50% revenue growth it produced in the same period a year ago, but an acceleration from the 33% uptick it saw in the fourth quarter. Management now expects better full-year revenue than it originally forecast at the start of the year, but still a slowdown from its breakneck growth of the last few years. Investors have punished the stock as a result, but the price has fallen to the point where it looks attractive. Shares trade for an enterprise value-to-sales ratio of less than 14. With the long runway ahead of it for growth fueled by AI, investors should expect strong revenue for years to come, albeit at lower levels than we've seen in prior years. The bottom line should rise significantly over time as it maintains a high gross margin and benefits from operating leverage. That should result in impressive year-over-year earnings growth for years to come. UiPath (PATH -0.33%) is the market leader in robotic process automation (RPA) software. Its software makes it possible to automate repetitive tasks, so workers can be more efficient and focus on making good decisions and creative outputs. It's integrating AI capabilities into its tools that can, for example, understand a contract and automate tasks based on the documentation. UiPath disappointed investors when it reported its first-quarter results at the end of May. Management cut its outlook for full-year recurring revenue by about 4% to a range of $1.66 billion to $1.665 billion. That resulted in a 50% reduction in the operating income forecast, dropping it to $145 million. Additionally, CEO Rob Enslin announced his resignation from the company just a few months after taking the position, and founder Daniel Dines retook the mantle. Those results, understandably, led to a massive sell-off. But the long-term outlook for UiPath remains promising. Its dollar-based net retention rate remains well over 100%, indicating it offers a sticky product and its land-and-expand strategy is working. It's effectively helping existing customers find more opportunities to use RPA, especially with the help of AI. The global RPA market will grow from $3 billion in 2023 to over $30 billion by 2030, according to Grand View Research. So there are likely a lot more opportunities on the horizon for UiPath. The sell-off appears to be overdone. Shares now trade for an enterprise value-to-sales ratio of less than 4. With strong potential for double-digit revenue growth (easily doable in a market expanding by 40% per year) and operating leverage, UiPath looks like a solid investment at this price.

2 Artificial Intelligence Stocks to Buy Hand Over Fist Right Now | The Motley Fool

The AI revolution is reshaping the tech landscape, and these two stocks are at the forefront of the transformation. The artificial intelligence tidal wave continues to reshape the technology sector, with ripple effects felt across global markets. As AI's transformative power becomes increasingly apparent to society at large, savvy investors are scrambling to identify the companies best positioned to ride this technological tsunami to stratospheric heights. Two names stand out as particularly strong buys for long-term investors: Semiconductor juggernaut Nvidia (NVDA -2.61%) and the upstart delivery technology firm Serve Robotics (SERV 187.07%). These companies, now intertwined through Nvidia's recent strategic investment, stand at the epicenter of the AI revolution, and their stocks could be primed for even more explosive growth in the coming years. Read on to find out more. Nvidia, the undisputed leader of AI chips, has seen its fortunes soar as demand for its cutting-edge processors reaches fever pitch. The company's graphics processing units (GPUs) are the lifeblood of AI systems worldwide, powering everything from autonomous vehicles to language models that can engage in human-like conversation. Despite a hefty 8% pullback in the chipmaker's stock last week, a mere hiccup in its astronomical rise, Nvidia's long-term prospects remain blindingly bright. The company's trailing price-to-earnings ratio of 68.9 might make some investors balk, but this premium valuation reflects Nvidia's stranglehold on the AI chip market. With global GDP potentially set to balloon by up to $4.4 trillion annually due to AI advancements, according to McKinsey's widely cited 2023 report, Nvidia stands to reap a king's ransom. Even more conservative estimates from Accenture and Goldman Sachs, which peg AI's annual impact at around $1 trillion, still represent a gold rush of epic proportions for the chip maker. Nvidia's brain trust, on the other hand, seems to think these estimates are far too conservative. The chipmaker's CEO Jensen Huang has gone on record stating that AI could unlock $100 trillion in economic value in the coming years, thanks to the advent of AI-powered agents, auto factories, digital twins, and scores of other game-changing innovations. The bottom line is Nvidia is a must-own stock for investors who want direct exposure to the AI revolution. Serve Robotics, a relative newcomer to the public markets, has suddenly found itself thrust into the spotlight. The company's semi-autonomous delivery robots, already a common sight on the sidewalks of San Francisco and Los Angeles, represent the cutting-edge of last-mile-delivery innovation. Nvidia's recent acquisition of a 10% stake in Serve Robotics sent the latter's stock into the stratosphere last Friday, as investors took note of the game-changing potential of this partnership. Nvidia's 3.7 million shares signal a strong vote of confidence in Serve's technology and growth prospects. Serve Robotics' journey from Postmates subsidiary to independent public company has been nothing short of remarkable. Its recent public offering, which raised $35.7 million in net proceeds, has provided the company with a solid foundation to fuel its expansion plans. However, investors should note that Serve Robotics is not without its challenges. The company's revenue stream is currently highly concentrated, with a single customer accounting for a whopping 90% of its revenue in the first quarter of 2024. This concentration risk underscores the importance of Serve's efforts to diversify its customer base. The AI revolution is not just coming. It's here, and it's reshaping industries at breakneck speed. Nvidia and Serve Robotics represent two sides of this technological coin: the established titan providing the computational muscle, and the nimble upstart applying that power to revolutionize last-mile delivery. For investors looking to capitalize on the AI boom, this dynamic duo offers a potent combination of established market dominance and disruptive potential. While risks certainly exist, from Nvidia's lofty valuation to Serve's customer concentration, the potential rewards could be nothing short of extraordinary.