Nvidia’s (NASDAQ:NVDA) recent quarterly report single-handedly shifted investor sentiment in the AI world.
The company’s 65% revenue surge defied some of the most bullish analyst projections. So this led to continued interest in other companies that can benefit from the AI rally on both the top- and bottom-lines.
Further, tech giants have been driving the stock market to record highs, leading many investors to question whether this rally is overdone. And while Nvidia has taken a step back, investors can play this rally in plenty of other ways this month.
Here are three top options I think investors ought to consider, if one is looking to invest in AI related companies. These stocks span the risk spectrum, but each company has unique catalysts that could drive outperformance for the rest of the year.
SoundHound AI (SOUN)
With shares rising over 15% at noon after a previous spike of more than 20%, investors are locked in on SoundHound AI (NASDAQ:SOUN). March 6, 2024, was the day that saw the stock close at $5.04. That was a staggering 197% jump in just a month. With a $1.24 billion market cap, SOUN remains a small-cap company despite its growth.
The company’s confidence in its future AI demand is consistent with broader trends. Also, it’s comparable to the success of chip companies like Nvidia. Nvidia’s GPUs fan the flames of AI developments. And the company’s holdings in SoundHound AI shares have something to do with Nvidia-related news. Today, Mizuho upped SoundHound’s stock prices and Nvidia’s price target.
With Nvidia’s backing, SoundHound AI aims to bring voice recognition technology to uncharted territories. If successful, this stock could be the higher-risk, higher-upside AI stock investors wish they bought on recent dips.
Advanced Micro Devices (AMD)
Some may say Advanced Micro Devices (NASDAQ:AMD) currently lives in Nvidia’s shadow. That’s generally a statement I’d define as true. However, many investors look for the semiconductor company to continue developing next-generation high-performance chips, thus challenging Nvidia in this arena over time.
AMD has announced plans to continue to roll out new chips targeting the AI space. And, while initial revenue estimates are small (relative to Nvidia), it’s unquestionable that if AMD can price its chips correctly, market share gains are on the horizon.
The company’s enterprise solutions and unique offerings spanning computer and graphics processors provide a diversified model. It’s one that is only strengthened by these AI tailwinds. As the company’s data center segment continues to pump out record revenue, it’s a stock to watch outside of its AI upside. Thus, I think any sort of AI-related premium is a plus for investors. Further, more upside could be on the horizon if the market values this company more as an AI play than a data center play.
Palantir Technologies (PLTR)
Palantir Technologies Inc (NYSE:PLTR) has gone from meme stock to AI darling. Many (myself included) did not think that its valuation could surge the way it did. However, Palantir has shown robust results, seemingly driven by its early-adopter status in the world of big data and AI-linked systems.
The company’s stock price has continued to remain robust, with PLTR stock still hovering near 52-week highs. The fact that this stock has more than tripled over the past 12 months tells most investors all they need to know about its status as a momentum play.
Since Palantir’s blockbuster results, the stock has found its footing around the $25 level. The company’s impressive Q4 profits, driven by the commercial sector, signal catalysts that could be longer-term in nature than many thought possible. Thus, so long as Palantir continues to pump out consistent GAAP profitability and upbeat projections, it’s a stock AI investors will want to own.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
