Artificial intelligence or AI is still in the early stages of development. However, this technology is likely to transform the modern world as it continues to evolve and be integrated into mainstream society. The question is no longer if the AI boom will occur but rather when it will occur.
The AI boom is looming, and now may well be the ideal time to round out a portfolio with AI companies. Here are five of the best to consider:
1. Could Nvidia Pop 48%?
Nvidia is a clear leader in AI. Founded in 1993, the company designs graphics processing units (GPUs) and application programming interface APIs.
It is a global leader in artificial intelligence hardware and software. The company produces the high-end chip needed to run advanced AI applications and is expected to be foundational to metaverse growth.
Since its IPO, the stock has split four times over the last two decades and the growth hasn’t slowed down. In January 2020, NVDA stock traded at around $60 per share. By December 2020, it traded at around $130 per share. By November 2021, it hit all time highs, trading at around $346 per share. The stock’s 52-week low is $134.59, and its 52-week high is $346.47.
Most recently, the company had a market cap of $530 billion. With Nvidia pulling back from all-time highs, now might be the time for savvy investors to buy. Cash flow, growth, and profit health all earn Nvidia A+ ratings.
If analysts forecasts are right, Nvidia has upside to $330 per share, representing 48% upside at the time of research.
2. Will International Business Machines Rise 33%?
Founded in 1911, IBM (International Business Machines Corporation) has long been a leader in innovation.
IBM has already invested a great deal of time and resources into building AI technology with the intention of revolutionizing healthcare, finance, law, and academia. While not all of IBM’s AI projects have come to fruition, the corporation continues to expand its AI applications each year.
IBM is a good choice for any investor looking to capitalize on the pending AI boom. But that’s not the only thing in its favor. A discounted cash flow forecast reveals that the fair market value of IBM sits at $168 per share, which would imply potential to rise as much as 33%.
3. Amazon: Trillion Dollar Company with 27% Upside
While Amazon is associated with everything e-commerce, the company operates heavily in the AI space.
Founded in 1994 by Jeff Bezos, Amazon was initially created as an online marketplace for books. Today, the multinational technology company uses AI technology for everything from digital advertising to cloud infrastructure. Amazon is one of the many cloud computing giants (like Microsoft and Google) positioned to benefit significantly from the AI boom.
In November 2021, AMZN stock hit an all-time high, trading around $3,770 per share. More recently, the company’s market cap pulled back to $1.5 trillion as its share price hovered closer to the $3,000 mark. But when we run a valuation analysis, it’s clear that the all-time highs more accurately reflect Amazon’s true worth. By our estimates, Amazon’s intrinsic value sits at $3,854, suggesting 27% upside is possible.
4. Meta Platforms Has A Massive 73% Upside Potential
Facebook, now known as Meta Platforms, is another company heavily invested in AI. As the company invests heavily in the metaverse, AI will play a larger and more significant role in the company.
Meta Platforms recently built a new artificial intelligence supercomputer known as the AI Research Supercluster that uses chips from Nvidia. Mark Zuckerburg’s company has undergone massive evolution over the last two decades, from a company that was allegedly created to rate college girls on the Harvard campus in the early 2000s to becoming a major AI Space player.
At the time of research, the company had a market cap of $571 billion but examining its financial statements reveals massive upside opportunity. By our estimates, the company could rise to $363 per share, representing 73% upside from current levels.
5. C3.ai Has 15% Upside
The final company on our list is as pure an AI stock as they come. Founded in 2009, C3.ai is a software company headquartered out of Redwood City, California.
Unlike the diversified tech giants and chip-maker listed above, the C3.ai company’s sole focus is artificial intelligence. The company provides AI tools to its customers that aim to accelerate software development and reduce overall cost and risk.
As its sole focus is on artificial intelligence, this AI stock could prove to be a big winner for investors over the long term. After scrutinizing its financials, we see 15% upside to $22.66 before the company is fairly valued.