Investing

Wall Street Expects 2 AI Stocks to Return at Least 50% in 2024

Trey Thoelcke

Published: March 25, 2024 9:40 am

Enthusiasm about the prospects for artificial intelligence (AI) remains a significant driver for many stocks, including several of the Magnificent Seven. The question for investors who have been cautious about what could have been a fad, or those who are simply late to the party, is whether it is now too late to jump on board. Have all the profits in AI stocks already been made?

Truth is, there may still be opportunities. Take for example Ambarella Inc. (NASDAQ: AMBA) and Cyngn Inc. (NASDAQ: CYN). Both automotive technology stocks have been in retreat in the past year. Yet, analysts anticipate strong rebounds for both of them in the next 12 months. So what’s up here? Let’s have a look.

Ambarella

Source: Keikona / iStock via Getty Images

This edge AI and fabless semiconductor design company focuses on low-power, high-definition, and Ultra HD video compression, image processing, and computer vision processors. Its products include video security, advanced driver assistance, electronic mirror, drive recorder, driver or cabin monitoring, autonomous driving, and other robotics applications, including those used for the Internet of Things.

The company expanded its partnership with infrastructure services provider Quanta earlier this year, and more recently it posted a narrower-than-expected quarterly net loss.

Shares are down about 19% year to date and are well down from an all-time high above $200. The analyst’s consensus price target is less than the 52-week high. However, hitting the high price target of $90 would be a gain of over 82% for the stock. Just four of 10 analysts who cover stock have Buy ratings, but there are no Sell ratings.

Cyngn

Source: metamorworks / Getty Images

This autonomous vehicle (AV) technology company engages in the development of driving software that can be deployed on multiple vehicle types in various environments. Its offerings include an internal tool suite and infrastructure that facilitate AI and machine learning training to enhance algorithms and models, and it provides a simulation framework to ensure that data collected in the field can be effectively applied. The company has at least 19 patents for its AV technologies, as well as partnerships with Nvidia and Rivian. (Check out some other artificial intelligence stocks under $10.)

Despite how much the share price of this penny stock is down in the past year, it is actually up more than 3% this year, thanks largely to a rally following a business update in January. Analysts see more room for shares to run, as their mean price target would be a 52-week high. The $3 high price target would be a gain of 1,900% for the stock. The consensus recommendation is to buy shares.