We are currently in an AI bull run. Stocks like Nvidia (NASDAQ:NVDA) are up over 100% year-to-date. Companies like Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), and Google (NASDAQ:GOOG, NASDAQ:GOOGL) are announcing new AI-enabled services. This truly historic event opens up new growth potential for investors looking for AI stocks.
Every day, new growth and value stocks are emerging, most of them relatively unknown. A key metric used to find these companies is analyst growth predictions. These include increasing EPS predictions and high price targets. It also includes financial analysis. This includes analyzing gross margins, cash flow, and other financial data in context with the company’s operations at the time. Another key factor is the analysis of growth catalysts. This range from the introduction of new products and services, to mergers, new deals, etc.
All this information allows us to decently estimate growth stocks, and the three companies discussed today fit this perfectly.
Serve Robotics (SERV)
Serve Robotics (NASDAQ:SERV) is a relatively new company engaged in the market for autonomous food delivery robots. Its products work primarily in dense, urban environments such as the Los Angeles metropolitan area. The stock spiked on June 21, rising 7.53%, but analysts predict growth multiple times that.
SERV is currently still starting out; it has an operating margin of -814.55%. While it is currently making a loss, analysts are bullish about this company for a few key reasons. One such reason is that SERV has seen year-over-year quarterly revenue growth of 2,252%. It has also strong leadership changes, with new roles being created in order to fill the needs of a growing company. It also has industry-wide backing, with a combined 44.27% of outstanding shares being held by institutions or insiders. The company also enjoys the support of UberEats, Nvidia, and 7-11, among others.
A wide corporate backing, great growth, and an analyst growth estimate of over 2000% make this stock an immediate buy.
Baidu (BIDU)
Baidu (NASDAQ:BIDU), often known as the “Google of China,” is a Chinese tech company specializing in AI and internet services. It invests in AI technologies like autonomous driving, voice recognition, and cloud services through initiatives like Baidu Apollo and Baidu Brain. It also holds a significant position in China’s search engine market.
BIDU stock is currently trading at $88.22 with a market cap of $31.1 billion. The company has seen steady revenue increase over the past four years, increasing by 25% from $107 billion in 2020 to $134.6 billion in 2023. The company has seen positive profit and operating margins of 14.77% and 17.40%, and has also consistently beaten EPS predictions over the past four quarters by a huge margin.
Baidu has products in a number of industries, which proves it immune to an industry slump. Several financial institutions rated the company as “buy” and “positive.”. Strong financials, a diverse product base, and investor confidence make BIDU on of the strongest undiscovered AI stocks.
UiPath (PATH)
UiPath (NYSE:PATH) provides an end-to-end automation platform with robotic process automation (RPA) solutions across the U.S., Romania, United Kingdom, Netherlands, and globally. It offers software to build, manage, run, engage, measure, and govern automation within organizations.
PATH stock is currently trading at $12.22 with a market cap of $7 billion. PATH is down 48.66% year-to-date, and I expect this negative trend to reverse anytime. While PATH’s financials do raise some red flags, such as its negative profit and operating margin of -6.41% and -14.76%, the company is poised for growth in the future. Analysts have set an average price target of $16.00 for the stock, indicating a potential increase of 31.00% – suggesting the stock is underpriced.
The company issued its Fiscal Year 2024 Impact Report last week, resulting in an 8.91% increase in its stock. This report emphasizes the company’s advancements in environmental, social, and governance (ESG) initiatives and their impact across four key areas, boosting investor confidence. UiPath is well-placed to capitalize on the AI trend, making PATH stock one of the great undiscovered AI stocks.
On the date of publication, Achintya Pasricha did not hold (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.
