Wall Street Analysts Bullish on AI Stocks Despite Market Volatility

3 Artificial Intelligence (AI) Stocks With Scorching-Hot Upside of Up to 100%, According to Select Wall Street Analysts

Roughly 30 years ago, the advent and subsequent proliferation of the internet changed the growth trajectory for businesses worldwide. Since then, investors have been patiently waiting for the next game-changing technology to come along and rival what the internet did for corporate America. After an extended wait, artificial intelligence (AI) looks to have answered the call. The "rise of AI" involves the use of software and systems for tasks that humans would normally handle. Moreover, these AI-driven systems have the capacity to learn and evolve over time without human intervention. This ability to grow more proficient at assigned tasks, as well as potentially learn new skills, gives AI utility across the board. Image source: Getty Images. Last year, the analysts at PwC released a report (Sizing the Prize, PwC's Artificial Intelligence Study: Exploiting the AI Revolution) that estimated AI would add $15.7 trillion to the global economy via consumption-side benefits and productivity gains come 2030. With this seemingly limitless addressable market, Wall Street's financial institutions and analysts have paid close attention to the AI revolution. While most analysts expect meaningful upside to come from cutting-edge AI stocks, certain companies might have an inside track to outsize gains. According to select Wall Street analysts, three AI stocks offer scorching-hot upside of up to 100% over the next 12 months. Nvidia: Implied upside of 55% To no one's surprise, the first artificial intelligence stock pegged by at least one Wall Street analyst to deliver outsize gains over the next year is leading hardware provider and innovator Nvidia (NASDAQ: NVDA). Rosenblatt's Hans Mosesmann increased his and his firm's price target on Nvidia to $200 from $140 following the company's recent 10-for-1 stock split. If Mosesmann's forecast were to prove accurate, the company would have a roughly $5 trillion market cap, and existing shareholders would enjoy an additional 55% upside from where shares closed on July 12. One aspect of Mosesmann's optimism has to do with the company being on the pole position when it comes to AI-focused graphics processing units (GPUs). On top of its H100 GPUs currently dominating in AI-accelerated data centers, it plans to introduce its next-generation Blackwell GPU architecture later this year, and its Rubin platform in 2026. There's a realistic chance that Nvidia's chips will retain a clear advantage over the competition. Mosesmann is equally excited about Nvidia's software. For instance, he believes the company's CUDA platform -- a tool kit used by developers to build large language models -- will go hand-in-hand with its hardware to keep businesses under its umbrella of products. But even though Nvidia's operating ramp-up has been virtually flawless, expecting close to $1.8 trillion in added upside to the company's already lofty valuation seems unlikely. History has a knack for spoiling the euphoria that fuels next-big-thing innovations. Over the last 30 years, no new innovation or trend has avoided an early-stage bubble, and artificial intelligence probably isn't the exception. Furthermore, there's a very real scenario in which Nvidia retains its GPU advantages and still loses. In addition to increasing external competition, Nvidia's top customers by net sales are all developing AI-GPUs for their data centers. Both the scarcity that's driven the prices of these GPUs into the stratosphere, and the data center space needed to fuel demand for Nvidia's hardware, are going to diminish. A second AI stock with mouthwatering upside, at least according to one Wall Street pundit, is Mobileye Global (NASDAQ: MBLY), a developer of advanced driver assistance systems (ADAS) and autonomous driving technologies. Although analyst Itay Michaeli at Citigroup has reduced his and his company's price target for Mobileye on a handful of occasions, the current target of $53 represents a cool 100% upside from where shares parked at the end of last week (July 12). Michaeli's bullishness primarily has to do with the expectation that advancements in autonomous vehicles (AVs) will -- pardon the necessary pun -- drive the use of Mobileye's solutions. This includes its next-generation EyeQ6H platform, which is a centralized chip with three times the power of its predecessor chip and will be tasked with improving ADAS capabilities in AVs. Michaeli's research note also points to advancements in Mobileye's SuperVision, the company's end-to-end ADAS technology that is enabled by 11 cameras, Road Experience Management-based AV maps, and the company's next-gen centralized EyeQ chips. SuperVision claims to support Level 2, 3, and 4 autonomous capabilities. Another factor working in Mobileye's favor is its pristine balance sheet. This is a company generating positive operating cash flow that, as of March 30, had $1.2 billion in cash and cash equivalents with no debt. However, reaching $53 per share could prove challenging. Even with next-gen vehicles becoming increasingly reliant on technology, we've witnessed tepid demand for electric vehicles (EVs) in recent quarters. With industry stalwarts like General Motors and Ford Motor Company scaling back their investments in EVs, it's become evident that Mobileye's growth prospects could ebb and flow as the EV industry and technology matures. Super Micro Computer: Implied upside of 65% The third artificial intelligence stock that can offer scorching-hot upside over the next 12 months, based on the prognostication of one Wall Street analyst, is customizable rack server and storage solutions specialist Super Micro Computer (NASDAQ: SMCI). Despite Supermicro's stock rallying 220% year to date, and more than 1,000% since the curtain opened on 2023, analyst Ananda Baruah at Loop Capital foresees shares climbing by another 65% over the coming year. Baruah's price target of $1,500 for Supermicro was released in mid-April. Baruah's research report focuses on Super Micro Computer's positioning within the rapidly growing AI server market, and he expects the company's customizable solutions to be popular as more and more businesses aim to hop aboard the AI revolution. Based on Wall Street's consensus revenue estimates of $14.9 billion in 2024 and $24 billion in 2025, Supermicro's sales are expected to grow by 237% in just a two-year stretch. But keep in mind that Super Micro Computer's growth trajectory is heavily reliant on Nvidia. The company's high-end rack servers incorporate Nvidia's H100 GPUs -- and Nvidia is already working with a sizable backlog for its H100. Supermicro's growth prospects could dwindle if AI-GPU scarcity persists longer than expected. History is also doubly concerning when it comes to Super Micro Computer. For one, expectations were high during the early stages of the cloud-computing boom in the mid-2010s. Unfortunately, the company's growth rate failed to live up to lofty expectations. In other words, we've seen Supermicro fail to live up to the hype before. The other concern echoes what I noted earlier about Nvidia. Every game-changing innovation, technology, and trend since the mid-1990s has needed time to mature, and we're not there yet with AI. With most businesses lacking a well-defined plan to benefit from artificial intelligence, Supermicro, like Nvidia, would be exposed to significant downside if and when the AI bubble bursts. The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Nvidia 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 $774,281!* 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*. Citigroup is an advertising partner of The Ascent, a Motley Fool company. Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool recommends General Motors and Mobileye Global and recommends the following options: long January 2025 $25 calls on General Motors. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

3 AI Stocks to Grab Now for 'Catch-Up' Gains

Artificial intelligence (AI) has taken the world by storm, with companies racing to capitalize on the immense promise it holds. From groundbreaking innovations to game-changing applications, the AI revolution is reshaping industries and redefining the future. While chip giant Nvidia Corporation (NVDA) has long been a frontrunner in AI technology, benefiting immensely from the growing demand for AI-powered applications and systems, Melius Research analyst Ben Reitzes has highlighted three other AI candidates that he thinks are due to run higher: Apple Inc. (AAPL), Advanced Micro Devices, Inc. (AMD), and Intel Corporation (INTC). The analyst believes that these three tech titans are poised to "catch up" with the performance of AI winners like Nvidia in the second half of the year, which means investors can still scoop up these stocks to benefit from the AI boom. Here's a closer look. AI Stock #1: Apple Cupertino-based Apple Inc. (AAPL), with a staggering market cap of around $3.5 trillion, needs no introduction. Apple consistently sets the gold standard by pioneering the tech landscape with groundbreaking consumer products like the iPhone, iPad, Mac, AirPods, Apple Watch, and the cutting-edge Apple Vision Pro. Beyond its impressive tech lineup, last month, Apple made its grand entrance into the AI landscape with "Apple Intelligence." This game-changing reveal catapulted the stock to new heights. On July 15, the mega-cap stock hit a fresh all-time high of $237.23. More broadly, AAPL has rallied 18% over the past 52 weeks, and is now up about 19% on a YTD basis. Beyond seizing growth opportunities, the company remains dedicated to rewarding its shareholders. On May 16, Apple paid investors a quarterly dividend of $0.25, marking a 4% increase. Its annualized dividend of $1.00 offers a 0.44% dividend yield. The tech giant also announced a record-breaking $110 billion share buyback alongside its Q2 earnings release, the largest in history. Following the company's better-than-expected fiscal Q2 earnings results and its staggering share repurchase plans, Apple shares soared nearly 6% on May 3. The company posted Q2 revenue of $90.8 billion, down 4.3% from the year-ago quarter, driven by a significant 10% year-over-year slump in iPhone sales. The continued slide in revenue hints at waning demand for its flagship smartphones, which hit the market last September. However, the company's topline figure managed to narrowly exceed Wall Street's forecast. During the quarter, the company earned $1.53 per share, also exceeding consensus estimates. Commenting on the Q2 performance, CFO Luca Maestri said, "Thanks to very high levels of customer satisfaction and loyalty, our active installed base of devices has reached a new all-time high across all products and all geographic segments, and our business performance drove a new EPS record for the March quarter." For Q3, due out Aug. 1, management forecasts total revenue growth in the low single digits year-over-year. The services business is expected to deliver double-digit growth. Analysts tracking Apple expect the company's profit to reach $6.59 per share in fiscal 2024, up 7.5% year over year, and rise another 12.1% to $7.39 per share in fiscal 2025. AAPL stock has a consensus "Moderate Buy" rating overall. Of the 30 analysts covering the stock, 19 advise a "Strong Buy," three say it's a "Moderate Buy," seven recommend a "Hold" rating, and the remaining analyst has a "Strong Sell." Even though the stock currently trades above its average analyst price target of $224.09, the Street-high target of $300 from analysts at Loop Capital suggests that the stock could rally as much as 31% from the current levels. AI Stock #2: Advanced Micro Devices Commanding a hefty market cap of about $257 billion, Santa Clara-based Advanced Micro Devices, Inc. (AMD) boasts the industry's widest array of cutting-edge high-performance and adaptive processor technologies. From CPUs and GPUs to FPGAs and Adaptive SoCs, AMD's extensive portfolio and software prowess make it a powerhouse in the tech world. Last month, at the Computex 2024 show, the company unveiled its powerhouse MI325X AI accelerator, which is expected to hit the market in Q4 of fiscal 2024. The chip boasts 288GB of HBM3E memory, and is poised to rival Nvidia. Shares of this chip giant have soared almost 34.7% over the past 52 weeks, though AMD narrowed its YTD gain to just 8.2% following Wednesday's heavy selling of semiconductor stocks. The chip giant announced its Q1 earnings results on April 30, which surpassed Wall Street's projections on both the top and bottom lines. The company reported a solid $5.5 billion in revenue, marking a 2.2% annual increase. On an adjusted basis, its EPS jumped 3.3% year over year to $0.62. During the quarter, AMD showcased exceptional strength in its Data Center and Client segments, with revenue soaring 80% and 85% year over year, respectively. This strong growth was driven by a surge in its MI300 AI accelerator shipments and strong Ryzen and EPYC processor adoption, underscoring AMD's strength in AI and processor markets. However, AMD's gaming segment revenue encountered challenges, falling 48% annually primarily due to a decline in chip sales for game consoles and PCs. Reflecting on the Q1 performance, CEO Dr. Lisa Su commented, "This is an incredibly exciting time for the industry as widespread deployment of AI is driving demand for significantly more compute across a broad range of markets. We are executing very well as we ramp our data center business and enable AI capabilities across our product portfolio." For Q2, management projects revenue of roughly $5.7 billion, with a possible variance of plus or minus $300 million. This forecast indicates an annual growth of about 6% and a sequential growth of around 4%. Additionally, the non-GAAP gross margin is expected to be approximately 53%. The company is slated to announce its Q2 earnings results after the market closes on Tuesday, July 30. Analysts tracking Advanced Micro Devices expect the company's profit to reach $2.60 per share in fiscal 2024, up 30.7% year over year, and rise another 68.5% to $4.38 per share in fiscal 2025. AMD stock has a consensus "Strong Buy" rating overall. Out of the 35 analysts covering the stock, 28 suggest a "Strong Buy," one recommends a "Moderate Buy," and the remaining six give a "Hold" rating. The average analyst price target of $197.78 indicates a potential upside of 24% from the current price levels, while the Street-high price target of $265 suggests that AMD stock could rally as much as 66.2%. AI Stock #3: Intel Corporation With a market cap of $146.7 billion, Santa Clara-based Intel Corporation (INTC), a semiconductor giant and leading microprocessor supplier, is making bold moves into data-centric businesses like autonomous driving and AI. While Nvidia dominates the AI accelerator market with over 90% market share, Intel is set to challenge this with its upcoming third-generation Gaudi AI accelerators, expected to hit the market later this year. At Computex 2024, Intel announced competitive pricing, offering Gaudi chips at a fraction of Nvidia's costs while promising impressive performance. With expanded partnerships and an aggressive pricing strategy, Intel aims to capture market share from Nvidia, setting the stage for a crucial showdown heading into 2025. Intel stock is down 31.4% on a YTD basis, as the company struggles with ongoing losses amid the launch of its foundry business. On June 1, Intel paid its shareholders a quarterly dividend of $0.125 per share. The company offers an annualized dividend of $0.50, resulting in an attractive 1.45% dividend yield. Considering the stock's underwhelming price action in 2024, INTC stock is clearly a bargain compared to its rival, Nvidia. Priced at 2.71 times sales, the stock trades significantly lower than Nvidia, which trades at 13.92x. On April 25, Intel reported its Q1 earnings results, which sailed past Wall Street's forecast on the bottom line, even as revenue fell short. The company's net revenue improved 8.5% year over year to $12.7 billion, while adjusted EPS of $0.18 marked a significant improvement from the adjusted loss per share of $0.04 recorded in the year-ago quarter. Intel Foundry reported a 10% annual revenue decline to $4.4 billion for the quarter, but Intel's Client Computing segment surged ahead, with chip sales for PCs and laptops reaching $7.5 billion, marking an impressive 31% increase year over year. Commenting on the Q1 performance, CEO Pat Gelsinger said, "We are confident in our plans to drive sequential growth throughout the year as we accelerate our AI solutions and maintain our relentless focus on execution, operational discipline and shareholder value creation in a dynamic market." For fiscal Q2, due out Aug. 1, management anticipates revenue between $12.5 billion and $13.5 billion. Additionally, its non-GAAP EPS and non-GAAP gross margin are projected to be $0.10 and 43.5%, respectively. Analysts tracking Intel Corporation expect the company's profit to fall to $0.08 per share this fiscal year before recovering to $0.86 in fiscal 2025. Overall, INTC stock has a consensus "Hold" rating. Of the 34 analysts offering recommendations for the stock, four recommend a "Strong Buy," two advise a "Moderate Buy," 25 recommend a "Hold," and the remaining three give a "Strong Sell" rating. The average analyst price target of $39.49 indicates a 14.6% potential upside from the current price levels. However, the Street-high price target of $68 suggests expectations for INTC to surge 97% from current levels. On the date of publication, Anushka Mukherji did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

2 AI Stocks to Buy Before They Soar 180% and 930%, According to Certain Wall Street Analysts (Hint: Not Nvidia)

Nvidia has benefited so profoundly from artificial intelligence (AI), both in terms of its share price appreciation and financial performance, that Goldman Sachs says the chipmaker alone has defined the first phase of the nascent AI boom. However, AI tailwinds will eventually penetrate every sector and industry, and Goldman believes software and IT services companies may be best positioned to benefit in the long run. In line with that thinking, certain analysts see significant upside in UiPath (NYSE: PATH) and Tesla (NASDAQ: TSLA). Investors should never put too much confidence in price targets, especially when those price targets seem too good to be true. But UiPath and Tesla still warrant further consideration. UiPath: 180% implied upside UiPath specializes in robotic process automation (RPA), one of the fastest-growing software markets. Its business automation platform includes task mining and process mining tools that help users identify situations in which automation would be beneficial. And it includes development tools that help users build software robots to automate those tasks and processes. Additionally, UiPath has incorporated artificial intelligence (AI) capabilities like computer vision, natural language processing, and machine learning into its platform. For instance, its Document Understanding product uses RPA and AI to extract, interpret, and take action on data from documents. Its Communications Mining product brings the same functionality to conversational channels like email and social media, such that businesses can automate certain customer interactions. Morgan Stanley says UiPath is the "clear category defining leader" in RPA software. But analysts have also acknowledged the company in other areas. For instance, Forrester Research recently recognized UiPath as a leading document mining and analytics platform, the International Data Corp. (IDC) recognized its leadership in intelligent document processing software, and Everest Group named the company a leader in process mining software. UiPath reported better-than-expected financial results in the first quarter of fiscal 2025 (ended April 2024). Revenue increased 16% to $335 million and non-GAAP (adjusted) net income increased 18% to $0.13 per diluted share. However, management lowered full-year guidance, such that revenue is now projected to increase no more than 8%, citing inconsistent sales execution and a difficult macroeconomic environment. The stock plunged 35% after management shared its gloomy outlook, and shares recently tumbled another 7% when the company announced a 10% reduction in its workforce. But investors have reason to be cautiously optimistic. Cofounder Daniel Dines has reassumed his previous role as CEO to refocus the company during this challenging period, and the workforce reduction could improve operational efficiency. Wall Street expects UiPath to grow sales at 11% annually through fiscal 2027 (ends January 2027), but that estimate leaves a lot of room for upside. Not only is UiPath the leader in RPA software, a market forecast to grow at 40% annually through 2030, but investments in AI product development have garnered praise from industry observers. Admittedly, UiPath is a risky investment. Not only are the odds of near-term triple-digit returns near zero, but the stock could continue falling if sales execution fails to improve under CEO Daniel Dines. However, with shares trading at 5.2 times sales, near the cheapest valuation in history, I think patient investors should consider buying a small position today. Tesla: 930% implied upside Tesla is the global leader in battery electric vehicle (BEV) sales, with 17.2% market share year to date through May. However, that figure declined 4% from the same period last year. Meanwhile, its closest competitor, Chinese automaker BYD, accounted for 16% of BEV sales, and its market share only slipped 0.2%, according to EV Volumes. Ark's valuation model is predicated on Tesla effectively monetizing its full self-driving software (FSD) in the coming years, both directly with subscription fees and indirectly through robotaxi services. Those products may sound farfetched to some readers, but autonomous driving technology is an inevitable extension of the artificial intelligence boom, and Tesla is well positioned to be a leader. Specifically, the company has a material data advantage where FSD is concerned, simply because it has so many sensor-equipped vehicles on the road continuously gathering information. In fact, Tesla is collecting data 110 times faster than Alphabet subsidiary Waymo, and its FSD software is about 16 times safer than the average driver as measured by miles per crash on surface streets, according to Ark Invest. Morgan Stanley analyst Adam Jonas has also expressed confidence that Tesla can successfully pivot from a capital-heavy auto manufacturer to a capital-light software and services provider. In fact, he believes mobility services (robotaxis) and network software/services (FSD, supercharging, premium connectivity) will eventually create a $10 trillion addressable market. However, Jonas sees that evolution playing out over a longer time horizon than Ark Invest. "While we believe Tesla has many attributes that can make it a formidable player (if not an outright winner) in the race to autonomy, we believe the more material commercial scaling of the business would be well beyond 2030," Jonas wrote in a recent note to clients. Tesla is a tricky case because the investment thesis depends on nascent or even nonexistent products, which makes it difficult to predict future revenue and earnings. For instance, Ark expects revenue growth of roughly 55% annually through 2029, but the consensus estimate among Wall Street analysts calls for revenue growth of 15% annually through 2026. Personally, I think the probability of a 930% return by 2029 is close to zero, but I also believe Tesla can evolve into a software and services business. Investors who agree with me should consider buying a few shares today. But I would keep my purchase very small. Shares currently trade at 9.3 times sales, a slight premium to the two-year average of 8.7 times sales. The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Tesla 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 $787,026!* 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*. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Trevor Jennewine has positions in Nvidia, Tesla, and UiPath. The Motley Fool has positions in and recommends Alphabet, BYD Company, Goldman Sachs Group, Nvidia, Tesla, and UiPath. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

3 Artificial Intelligence (AI) Stocks With Scorching-Hot Upside of Up to 100%, According to Select Wall Street Analysts | The Motley Fool

Analysts are predicting significant upside for some of the most innovative companies involved in the artificial intelligence (AI) revolution. Roughly 30 years ago, the advent and subsequent proliferation of the internet changed the growth trajectory for businesses worldwide. Since then, investors have been patiently waiting for the next game-changing technology to come along and rival what the internet did for corporate America. After an extended wait, artificial intelligence (AI) looks to have answered the call. The "rise of AI" involves the use of software and systems for tasks that humans would normally handle. Moreover, these AI-driven systems have the capacity to learn and evolve over time without human intervention. This ability to grow more proficient at assigned tasks, as well as potentially learn new skills, gives AI utility across the board. Last year, the analysts at PwC released a report (Sizing the Prize, PwC's Artificial Intelligence Study: Exploiting the AI Revolution) that estimated AI would add $15.7 trillion to the global economy via consumption-side benefits and productivity gains come 2030. With this seemingly limitless addressable market, Wall Street's financial institutions and analysts have paid close attention to the AI revolution. While most analysts expect meaningful upside to come from cutting-edge AI stocks, certain companies might have an inside track to outsize gains. According to select Wall Street analysts, three AI stocks offer scorching-hot upside of up to 100% over the next 12 months. To no one's surprise, the first artificial intelligence stock pegged by at least one Wall Street analyst to deliver outsize gains over the next year is leading hardware provider and innovator Nvidia (NVDA -6.62%). Rosenblatt's Hans Mosesmann increased his and his firm's price target on Nvidia to $200 from $140 following the company's recent 10-for-1 stock split. If Mosesmann's forecast were to prove accurate, the company would have a roughly $5 trillion market cap, and existing shareholders would enjoy an additional 55% upside from where shares closed on July 12. One aspect of Mosesmann's optimism has to do with the company being on the pole position when it comes to AI-focused graphics processing units (GPUs). On top of its H100 GPUs currently dominating in AI-accelerated data centers, it plans to introduce its next-generation Blackwell GPU architecture later this year, and its Rubin platform in 2026. There's a realistic chance that Nvidia's chips will retain a clear advantage over the competition. Mosesmann is equally excited about Nvidia's software. For instance, he believes the company's CUDA platform -- a tool kit used by developers to build large language models -- will go hand-in-hand with its hardware to keep businesses under its umbrella of products. But even though Nvidia's operating ramp-up has been virtually flawless, expecting close to $1.8 trillion in added upside to the company's already lofty valuation seems unlikely. History has a knack for spoiling the euphoria that fuels next-big-thing innovations. Over the last 30 years, no new innovation or trend has avoided an early-stage bubble, and artificial intelligence probably isn't the exception. Furthermore, there's a very real scenario in which Nvidia retains its GPU advantages and still loses. In addition to increasing external competition, Nvidia's top customers by net sales are all developing AI-GPUs for their data centers. Both the scarcity that's driven the prices of these GPUs into the stratosphere, and the data center space needed to fuel demand for Nvidia's hardware, are going to diminish. A second AI stock with mouthwatering upside, at least according to one Wall Street pundit, is Mobileye Global (MBLY -2.67%), a developer of advanced driver assistance systems (ADAS) and autonomous driving technologies. Although analyst Itay Michaeli at Citigroup has reduced his and his company's price target for Mobileye on a handful of occasions, the current target of $53 represents a cool 100% upside from where shares parked at the end of last week (July 12). Michaeli's bullishness primarily has to do with the expectation that advancements in autonomous vehicles (AVs) will -- pardon the necessary pun -- drive the use of Mobileye's solutions. This includes its next-generation EyeQ6H platform, which is a centralized chip with three times the power of its predecessor chip and will be tasked with improving ADAS capabilities in AVs. Michaeli's research note also points to advancements in Mobileye's SuperVision, the company's end-to-end ADAS technology that is enabled by 11 cameras, Road Experience Management-based AV maps, and the company's next-gen centralized EyeQ chips. SuperVision claims to support Level 2, 3, and 4 autonomous capabilities. Another factor working in Mobileye's favor is its pristine balance sheet. This is a company generating positive operating cash flow that, as of March 30, had $1.2 billion in cash and cash equivalents with no debt. However, reaching $53 per share could prove challenging. Even with next-gen vehicles becoming increasingly reliant on technology, we've witnessed tepid demand for electric vehicles (EVs) in recent quarters. With industry stalwarts like General Motors and Ford Motor Company scaling back their investments in EVs, it's become evident that Mobileye's growth prospects could ebb and flow as the EV industry and technology matures. The third artificial intelligence stock that can offer scorching-hot upside over the next 12 months, based on the prognostication of one Wall Street analyst, is customizable rack server and storage solutions specialist Super Micro Computer (SMCI -6.92%). Despite Supermicro's stock rallying 220% year to date, and more than 1,000% since the curtain opened on 2023, analyst Ananda Baruah at Loop Capital foresees shares climbing by another 65% over the coming year. Baruah's price target of $1,500 for Supermicro was released in mid-April. Baruah's research report focuses on Super Micro Computer's positioning within the rapidly growing AI server market, and he expects the company's customizable solutions to be popular as more and more businesses aim to hop aboard the AI revolution. Based on Wall Street's consensus revenue estimates of $14.9 billion in 2024 and $24 billion in 2025, Supermicro's sales are expected to grow by 237% in just a two-year stretch. But keep in mind that Super Micro Computer's growth trajectory is heavily reliant on Nvidia. The company's high-end rack servers incorporate Nvidia's H100 GPUs -- and Nvidia is already working with a sizable backlog for its H100. Supermicro's growth prospects could dwindle if AI-GPU scarcity persists longer than expected. History is also doubly concerning when it comes to Super Micro Computer. For one, expectations were high during the early stages of the cloud-computing boom in the mid-2010s. Unfortunately, the company's growth rate failed to live up to lofty expectations. In other words, we've seen Supermicro fail to live up to the hype before. The other concern echoes what I noted earlier about Nvidia. Every game-changing innovation, technology, and trend since the mid-1990s has needed time to mature, and we're not there yet with AI. With most businesses lacking a well-defined plan to benefit from artificial intelligence, Supermicro, like Nvidia, would be exposed to significant downside if and when the AI bubble bursts.

Should You Buy or Sell Nvidia Stock on China Trade Concerns?

The escalating trade tensions between the United States and China, which more recently focused on electric vehicles (EV) and solar panels, have circled back to a familiar flashpoint between the two countries: semiconductor chips. Citing national security concerns, the U.S. unleashed a plethora of export control rules in October 2022 targeting China, the largest exporter of chips in the world - but the clampdown proved ineffective, as friendly nations like Japan and the Netherlands have continued to supply crucial semiconductor manufacturing equipment. As a result, the U.S. has tried different approaches to choke off China's access to advanced semiconductor technology, culminating in Wednesday's reports that the Biden administration is considering the most severe trade restrictions available if companies like Dutch giant ASML (ASML) continue to ship to China. Those reports coincided with hawkish comments from GOP presidential nominee Donald Trump on Taiwan, home to industry critical Taiwan Semiconductor (TSM), the world's largest chip manufacturer. Trump told Bloomberg, "They did take about 100% of our chip business. I think, Taiwan should pay us for defense... You know, we're no different than an insurance company. Taiwan doesn't give us anything." With both Biden and Trump talking tough on chips and China, most of the semiconductor industry spiraled sharply lower on Wednesday - with the notable exception of Intel (INTC), which is expected to benefit as it continues to expand its domestic foundry footprint. U.S.-listed shares of Taiwan Semi tumbled nearly 8%, ASML lost 12%, and Advanced Micro Devices (AMD) shed more than 10%, while the broader VanEck Semiconductor ETF (SMH) closed down 7%. So where does this leave Nvidia (NVDA), with the poster child of the AI revolution taking a 6.6% hit on the session? Should investors give the Jensen Huang-led company a wide berth amid the candidates' saber-rattling on trade - or is the stock's latest dip an opportunity to load up on Nvidia shares? Let's have a closer look. About Nvidia Stock For the uninitiated, Nvidia (NVDA) is a leader in specialized AI semiconductors, and the company also supplies software to support the hardware it provides. More specifically, Nvidia designs and sells graphics processing units (GPUs) for the gaming and professional markets, and system-on-a-chip (SoC) units for the mobile computing market. Trading under a dollar as recently as 2016, the stock recently completed a 10-for-1 stock split to bring its share price back down to earth. Nvidia is up an impressive 146% on a YTD basis, and the chip giant has surged a staggering 2,595% over the past five years. Last month, NVDA briefly took over the No. 1 spot as the most valuable company in the world, elbowing past Big Tech titans like Microsoft (MSFT) and Apple (AAPL). With Apple now back in the top spot, Nvidia's market cap currently stands at a formidable $2.90 trillion. The stock also offers a modest dividend yield of 0.02%. Although the stock's 16% pullback from its June highs might feel alarming, given NVDA's near-vertical rise over the past year, the core fundamentals and operational strength of the company remain firmly intact. Nvidia Crushes Earnings Expectations Nvidia's financial position remains as solid as ever, as can be gauged from its latest results for the first quarter. In Q1 2025, Nvidia continued its impressive run of beating revenue and earnings expectations. Specifically, the company reported record quarterly revenues of $26 billion, up a whopping 262% from the previous year, as its core data center revenues shot up by 427% in the same period to $22.6 billion. Nvidia's adjusted EPS rocketed by 461.5% on a YoY basis to $0.61, comfortably beating estimates. The company generated net cash from operating activities of $15.34 billion, compared to just $2.91 billion in the year-ago quarter. Moreover, Nvidia closed the quarter with a cash balance of $31.44 billion, much higher than its debt levels of $14 billion. Nvidia has been on a tear for the past five quarters. Not only have they consistently beaten analyst expectations, but they've also delivered impressive quarterly earnings growth. For Q2 2025, set to be reported in late August, the company expects revenues of $28 billion. Analysts are forecasting forward revenue growth of 80.21% for Nvidia, compared to the tech sector median of 6.57%. Overall, the past 10 years have seen the company grow its revenue and EPS at a CAGR of 33.99% and 56%, respectively. Nvidia unveiled its Blackwell platform of chips in March, and the company is betting big on it. Touted as an improvement over its Hopper architecture, launched two years ago, the Blackwell platform boasts significant improvements in cost and energy efficiency compared to its predecessor. (As context, each of Nvidia's H100 chips consumes 700W of energy at peak operation, which is more than the annual electricity consumption of countries like Georgia, Costa Rica, and Guatemala.) Enter Nvidia's Blackwell platform, which was launched earlier this year. It promises to slash costs by up to 25x for tasks like training giant AI models, saving significant power for the same performance. Production is underway, with availability coming later in 2024. And Nvidia isn't resting; Blackwell's successor, Rubin, is already in the works for a 2026 launch. Looking ahead, management is confident in continued growth through 2025 and beyond. This optimism is fueled by the shift to accelerated computing, an explosion of generative AI applications, strong growth in enterprise and consumer internet sectors, and the development of sovereign AI. The company's bullishness stems from the fact that Nvidia's chips are used for various purposes such as data centers, edge-to-cloud computing, the powering of automotive driving technology, cryptocurrency mining, and professional applications. Nvidia's H100 Tensor Core GPU is used as the foundation for artificial intelligence usage on the data center level. This GPU was the fastest available in the market, and therefore in particularly high demand among companies that require a fast tackling of AI and HPC workloads. Nvidia is currently the leading AI processor manufacturer, with its AI accelerator MI300X to support machine learning set to be made available to users soon. The chip giant has software muscle, too. Their Nvidia Inference Microservices (NIMs), unveiled at GTC this year, are production-ready containers that simplify deploying AI models at scale. NIMs slash deployment times from weeks to minutes, according to Nvidia. They work across Nvidia's massive CUDA-enabled GPU base of hundreds of millions and support a wide range of models, including open-source options like Meta's (META) Llama 3. Bullish Analysts Back Nvidia As semi stocks sold off on Wednesday, Mizuho Securities analyst Jordan Klein advised investors not to panic, and remarked, "My personal take is not to freak out and start indiscriminately selling semis with reckless abandon. A pullback and risk-off trade into July earnings season IS GOOD IN MY VIEW to lower expectations and very elevated and euphoric investor positioning/sentiment in the semi sector." Considering its strong balance sheet, continued innovation, and robust market standing, Nvidia's latest dip can be an opportunity for long-term investors to load up on the stock. Overall, analysts continue to remain bullish about Nvidia stock, even as they've struggled to keep up with price-target hikes post-stock split. The consensus rating is a "Strong Buy," with a mean target price of $139.41, indicating an upside potential of about 16.7% to current prices. Out of 40 analysts covering NVDA stock, 34 have a "Strong Buy" rating, 2 have a "Moderate Buy" rating, and 4 have a "Hold" rating. On the date of publication, Pathikrit Bose did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

2 AI Stocks to Buy Before They Soar 180% and 930%, According to Certain Wall Street Analysts (Hint: Not Nvidia) | The Motley Fool

Forecasts from Wall Street analysts imply colossal gains for shareholders of UiPath and Tesla. Nvidia has benefited so profoundly from artificial intelligence (AI), both in terms of its share price appreciation and financial performance, that Goldman Sachs says the chipmaker alone has defined the first phase of the nascent AI boom. However, AI tailwinds will eventually penetrate every sector and industry, and Goldman believes software and IT services companies may be best positioned to benefit in the long run. In line with that thinking, certain analysts see significant upside in UiPath (PATH 1.84%) and Tesla (TSLA 1.55%). Investors should never put too much confidence in price targets, especially when those price targets seem too good to be true. But UiPath and Tesla still warrant further consideration. UiPath specializes in robotic process automation (RPA), one of the fastest-growing software markets. Its business automation platform includes task mining and process mining tools that help users identify situations in which automation would be beneficial. And it includes development tools that help users build software robots to automate those tasks and processes. Additionally, UiPath has incorporated artificial intelligence (AI) capabilities like computer vision, natural language processing, and machine learning into its platform. For instance, its Document Understanding product uses RPA and AI to extract, interpret, and take action on data from documents. Its Communications Mining product brings the same functionality to conversational channels like email and social media, such that businesses can automate certain customer interactions. Morgan Stanley says UiPath is the "clear category defining leader" in RPA software. But analysts have also acknowledged the company in other areas. For instance, Forrester Research recently recognized UiPath as a leading document mining and analytics platform, the International Data Corp. (IDC) recognized its leadership in intelligent document processing software, and Everest Group named the company a leader in process mining software. UiPath reported better-than-expected financial results in the first quarter of fiscal 2025 (ended April 2024). Revenue increased 16% to $335 million and non-GAAP (adjusted) net income increased 18% to $0.13 per diluted share. However, management lowered full-year guidance, such that revenue is now projected to increase no more than 8%, citing inconsistent sales execution and a difficult macroeconomic environment. The stock plunged 35% after management shared its gloomy outlook, and shares recently tumbled another 7% when the company announced a 10% reduction in its workforce. But investors have reason to be cautiously optimistic. Cofounder Daniel Dines has reassumed his previous role as CEO to refocus the company during this challenging period, and the workforce reduction could improve operational efficiency. Wall Street expects UiPath to grow sales at 11% annually through fiscal 2027 (ends January 2027), but that estimate leaves a lot of room for upside. Not only is UiPath the leader in RPA software, a market forecast to grow at 40% annually through 2030, but investments in AI product development have garnered praise from industry observers. Admittedly, UiPath is a risky investment. Not only are the odds of near-term triple-digit returns near zero, but the stock could continue falling if sales execution fails to improve under CEO Daniel Dines. However, with shares trading at 5.2 times sales, near the cheapest valuation in history, I think patient investors should consider buying a small position today. Tesla is the global leader in battery electric vehicle (BEV) sales, with 17.2% market share year to date through May. However, that figure declined 4% from the same period last year. Meanwhile, its closest competitor, Chinese automaker BYD, accounted for 16% of BEV sales, and its market share only slipped 0.2%, according to EV Volumes. Ark's valuation model is predicated on Tesla effectively monetizing its full self-driving software (FSD) in the coming years, both directly with subscription fees and indirectly through robotaxi services. Those products may sound farfetched to some readers, but autonomous driving technology is an inevitable extension of the artificial intelligence boom, and Tesla is well positioned to be a leader. Specifically, the company has a material data advantage where FSD is concerned, simply because it has so many sensor-equipped vehicles on the road continuously gathering information. In fact, Tesla is collecting data 110 times faster than Alphabet subsidiary Waymo, and its FSD software is about 16 times safer than the average driver as measured by miles per crash on surface streets, according to Ark Invest. Morgan Stanley analyst Adam Jonas has also expressed confidence that Tesla can successfully pivot from a capital-heavy auto manufacturer to a capital-light software and services provider. In fact, he believes mobility services (robotaxis) and network software/services (FSD, supercharging, premium connectivity) will eventually create a $10 trillion addressable market. However, Jonas sees that evolution playing out over a longer time horizon than Ark Invest. "While we believe Tesla has many attributes that can make it a formidable player (if not an outright winner) in the race to autonomy, we believe the more material commercial scaling of the business would be well beyond 2030," Jonas wrote in a recent note to clients. Tesla is a tricky case because the investment thesis depends on nascent or even nonexistent products, which makes it difficult to predict future revenue and earnings. For instance, Ark expects revenue growth of roughly 55% annually through 2029, but the consensus estimate among Wall Street analysts calls for revenue growth of 15% annually through 2026. Personally, I think the probability of a 930% return by 2029 is close to zero, but I also believe Tesla can evolve into a software and services business. Investors who agree with me should consider buying a few shares today. But I would keep my purchase very small. Shares currently trade at 9.3 times sales, a slight premium to the two-year average of 8.7 times sales.

Buy the Dip in These 'Strong Buy' Semiconductor Stocks

Semiconductor stocks have been on fire since the start of 2023, primarily due to the artificial intelligence (AI) megatrend. However, the demand for chips across devices such as smartphones, laptops, tablets, and much more has helped the VanEck Semiconductor ETF (SMH) to surge roughly 1,000% in the past 10 years - easily outpacing broader equity indices, such as the S&P 500 Index ($SPX) and Nasdaq Composite ($NASX). While market bellwether Nvidia (NVDA) continues to dominate the headlines, the AI megatrend has just begun and should benefit other chip stocks in the upcoming decade. As leaders in the industry pull back ahead of the start of Q2 earnings, pressured by trade concerns with China and a broader rotation into small-caps, now could be an opportune time to scoop up shares of analysts' favorite semiconductor stocks. For investors looking to take advantage of the dip and add some exposure to this critical industry, here are three top-rated semiconductor stocks with more room to run, according to analysts. #1. Advanced Micro Devices Stock Valued at $257 billion by market cap, Advanced Micro Devices (AMD) has already returned close to 4,000% to shareholders in the past decade. Amid this week's selling in semi stocks, AMD is now off about 30% from its March highs. Nvidia currently leads the AI chip market, but AMD grew its data center sales by 80% year over year in Q1 of 2024, as the business accounted for 40% of total revenue. Alternatively, weakness in other verticals meant its Q1 sales rose by just 2% year over year to $5.5 billion. Comparatively, AMD's net income stood at $123 million, compared to a loss of $139 million in the year-ago period. According to research firm TD Cowen (TD), AMD's MI300X accelerator program should help the chip maker generate $4.75 billion in sales in 2024, and $9.5 billion in 2025. Out of the 35 analysts covering AMD stock, 28 recommend "strong buy," one recommends "moderate buy," and six recommend "hold." The average target price for AMD stock is $197.78, about 27% above the current trading price. #2. Broadcom Stock Valued at $726 billion by market cap, Broadcom (AVGO) may be the next company to enter the trillion-dollar club. AVGO stock has surged 2,360% since July 2014, after adjusting for dividend reinvestments, and is poised to benefit from strong hardware demand that supports AI applications. Similar to Nvidia, Broadcom just completed a 10-for-1 stock split, making the shares - and AVGO stock options - much more accessible to retail traders. Up about 40% YTD, the stock has pulled back roughly 15% from its highs of a month ago. TD Cowen explains that the transition to Ethernet back-end networking and custom silicon ramping should act as a tailwind for Broadcom going forward. While its sales in the recent quarter rose by 34% year over year, its free cash flow stood at $4.7 billion, indicating a margin of almost 40%. Moreover, the chip giant raised its full-year sales forecast due to strong demand for AI products. Out of the 32 analysts covering AVGO stock, 29 recommend "strong buy," and three recommend "hold." The average target price for AVGO stock is $188.84, indicating expected upside of 20.5% from here. #3. Marvell Technology Stock The final stock on my list is Marvell Technology (MRVL), which, according to TD, should benefit from high attachment rates for optoelectronics and its custom silicon business. Marvell manufactures products used in gaming consoles, AI servers, and enterprise workstations. Similar to Nvidia, Marvell's largest business is the data center segment, which accounted for 40% of sales last year. While its sales in fiscal Q1 of 2025 fell by 12% year over year to $1.16 billion, data center sales almost doubled to $876 million. Looking ahead, management expects AI-related sales to touch $1.5 billion in fiscal 2025 and $2.5 billion in 2026, as the addressable market for data infrastructure is expected to triple to $75 billion through 2028. Out of the 29 analysts covering MRVL stock, 26 recommend "strong buy," two recommend "moderate buy," and one recommends "hold." The average target price for MRVL stock is $89.11, a premium of 33.2% to the current prices. On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

3 Growth Beasts (Not Named Nvidia) That Have Been 10-Baggers Over the Past 10 Years | The Motley Fool

Investors bullish on artificial intelligence should be careful not to overlook these stellar growth stocks. Nvidia's business has been scorching hot over the past year as the rapid growth in artificial intelligence (AI) resulted in escalated demand for the company's chips. Enthusiasm over that demand helped generate life-changing returns for investors totaling more than 28,000% over the past decade. Given that its valuation has already climbed over $3 trillion, replicating this growth going forward is exponentially tougher. Luckily, for new investors, there are plenty of other good growth stocks to consider for the future beyond just Nvidia. Three stocks with promising growth prospects that have generated 10x returns in the past 10 years include Microsoft (MSFT -1.33%), Palo Alto Networks (PANW -1.88%), and Advanced Micro Devices (AMD -10.21%). Here's why these stocks can still be good buys in the years ahead. For years, Microsoft has been one of the top tech stocks to own. It maintained that status by continuing to evolve over the years, branching into different industries. From computers to gaming to cloud computing and now AI, the company always seeks out new opportunities to get larger and more diverse. That's a quality investors should look for when choosing a growth stock. That focus on growth enabled this already large business to further expand. When the company last reported earnings in April, its revenue rose by 17% year over year to $61.9 billion for the first three months of the year. Many of its segments generated double-digit growth during the period. And not only did its top line grow, but Microsoft's net income also rose by 20% year over year during the quarter to $21.9 billion. Microsoft is still in the early innings of its AI-powered growth, with Copilot+ computers and AI-fueled office software potentially being future growth catalysts for the business for years to come. With solid financials and many growth opportunities, Microsoft still looks like a phenomenal stock to own for the long haul. Its 10-year returns, including dividends, total 1,160%. And on this list of impressive growth stocks, that's the lowest return. One stock that has outperformed Microsoft is Palo Alto Networks. It doesn't pay a dividend, so its gains are strictly due to its rising share price. In 10 years, it has risen by more than 1,250%. Palo Alto is a leading cybersecurity company and as big tech has grown in size, it benefited from a growing need to keep data safe. Since fiscal 2020, the company has more than doubled its revenue to $6.9 billion in fiscal 2023 (which ended on July 31, 2023). This fiscal year, Palo Alto projects its revenue will grow by approximately 16%. And there are still more opportunities ahead for the company, especially as AI threats create new challenges for businesses. Palo Alto has its own AI capabilities that can help fight these new threats and identify them in real time. For investors looking to get in on the enthusiasm for AI, it's not just all about chatbots, AI chips, and data centers. Cybersecurity is a huge growth opportunity as well, and with Palo Alto being a big name in the industry, it can be a top AI stock to own for the foreseeable future. Advanced Micro Devices, also known as AMD, is in the chipmaking business along with Nvidia. Although it hasn't generated nearly as impressive growth or even returns, it's still a top growth stock to own when it comes to AI. Customers will need alternatives to Nvidia's high-priced chips, and AMD could fill that need. The stock has generated some impressive returns for investors, totaling 3,870% in 10 years, thanks to some explosive growth; AMD's sales have skyrocketed from $4 billion in 2015 to $22.7 billion this past year. And that's without AMD's sales taking off due to AI yet. During the first three months of the year, AMD's revenue only rose by 2% year over year, coming in at just under $5.5 billion. The company is working on developing new AI chips to try to take some market share from Nvidia in the future, but it's a multiyear plan for AMD. CEO Lisa Su says, "AI is clearly our No. 1 priority as a company, and we have really harnessed all of the development capability within the company to do that." Although AMD's chips may be a little late to the game, they could provide the company with a huge growth catalyst if they can accelerate its growth rate, which is why it may not be too late to buy the stock today.