NVIDIA’s shares surged by 12.81% on July 31, 2024, following Microsoft’s announcement of increased capital investment in AI for the new fiscal year.
For investors interested in investing in AI technologies, there are plenty of opportunities to capitalize on AI’s rapid growth. Even if one chooses not to invest in AI stocks for his/ her portfolio, the success of these companies will likely impact the businesses you monitor.
The stock market experts at City Index share the five best AI stocks to watch in late 2024:
1. NVIDIA (NVDA)
Nvidia had a record year in 2023, profiting from the boom of OpenAI’s large language model software, ChatGPT. The company’s graphics cards are some of the most valuable semiconductors available, partly driving Nvidia’s valuation past $1 trillion last year, which has now surpassed $2.88 trillion (£2.24 trillion) as of August 2024. Competitors such as AMD and Intel are worth only a fraction of that figure, leaving Nvidia head and shoulders above its competition in 2024.
2. Altair Engineering (ALTR)
The company posted strong revenue figures in 2023—a 12.3% increase YoY—and nearly tripled its free cash flow from $5.2 to $14.7 million (£11.7 million). The future looks bright for the company, as it also released its updated AI-powered data analytics tool, RapidMiner, in November 2023.
3. C3.ai (AI)
C3.ai’s stock price fell from last year’s high of $44.49 to under $30 at the start of 2024. Analysts’ projections place C3.ai’s revenue to grow by 19.8% this year and 23.6% in 2025, up from 14.7% in 2023. However, the stock isn’t expected to reach profitability until the end of its 2025 fiscal year. It’s now a question of whether or not to bet on the cloud software provider’s potential upside. C3.ai has a lot of room to grow if it can recover to its post-IPO price of $119.58 in December 2020.
4. Palantir (PLTR)
Palantir had a successful 2023, with its stock price rising from $6.40 to a high of $20.27 in December 2023. Both its revenue and earnings per share are expected to grow by about 20% this year, so there’s no reason the stock won’t continue to thrive as enterprise AI solutions remain in demand.
5. Upstart (UPST)
As an AI-powered lending assistant, Upstart’s revenue is closely linked with US federal interest rates. Despite high rates being one of the reasons the company failed to reach revenue forecasts in 2023, the Federal Reserve is expected to begin cutting interest rates in 2024. This means more individuals may be looking to borrow money this year, and Upstart’s services could be in higher demand.
Head of Market Research at City Index, Matt Weller comments, “In 2024, the landscape of AI stocks presents intriguing opportunities for investors. Companies at the forefront of artificial intelligence, such as Nvidia and Altair Engineering, are worth watching closely. These firms have demonstrated exceptional innovation and a strategic vision that aligns with the evolving demands of the market.”
“AI’s ability to swiftly process information, coupled with predictive analytics, allows investors to stay ahead of the curve in an ever-changing market landscape. The integration of natural language processing has not only amplified our understanding of market sentiment but has also opened doors to new dimensions of data interpretation.” he adds
“As the demand for AI solutions continues to surge, these companies are well-positioned to capitalise on the market trends, making them compelling choices for investors looking to navigate the dynamic landscape of AI stocks in the coming years.” concludes Weller
What AI means for the stock market
When choosing the best AI stocks, we focused on the companies building the infrastructure for the AI revolution. The stocks on this list power AI and LLMs either by manufacturing the graphics processing units (GPUs) used in hyperscale data centres or by providing data analytics software integrating generative AI for big tech companies like Apple and Microsoft. You can trade these and other top AI stocks in one fund with the AI index available on City Index.
AI has revolutionized the stock market, placing algorithmic trading and predictive analytics at the forefront. Algorithms powered by AI swiftly analyze market data, enabling rapid trade execution. Meanwhile, predictive analytics, driven by AI models, forecast stock prices and market trends by scrutinizing historical data deeply. Utilizing AI to harness the power of big data may provide traders and investors with the tactical advantage they need to navigate an increasingly unpredictable market.
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Source: Cityindex.com
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