For years the buzz was that artificial intelligence (AI) was the next big thing. As usual, when it comes to technology innovation, the opening salvos from private equity and others took quite a while to catch up with reality. That all changed last year with the introduction of OpenAI’s ChatGPT, and then the company offered expanded access to OpenAI’s DALL-E 2 AI image and art generator.
With almost unlimited potential and possibilities for machine learning, smart applications and appliances, autonomous vehicles and robotic applications, the brave new world is here now. Numerous companies stand to benefit from the technology advances that AI will provide, and those that do not use the technology in the coming years will surely regret it.
While Nvidia stock has exploded higher over the past year, and likely has more upside, the question is what other companies could have a similar parabolic move higher? We screened our 24/7 Wall St. technology and AI research database and found five companies that many on Wall Street expect will also cash in on the sweeping new technology.
While their stocks are all rated Buy, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
AMD
Advanced Micro Devices Inc. (NYSE: AMD) offers x86 microprocessors and graphics processing units (GPUs) as an accelerated processing unit, chipsets, data center, and professional GPUs. It offers embedded processors and semi-custom system-on-chip (SoC) products, microprocessor and SoC development services and technology, data processing units, field programmable gate arrays and adaptive SoC products.
AMD provides processors under the AMD Ryzen, AMD Ryzen PRO, Ryzen Threadripper, Ryzen Threadripper PRO, AMD Athlon, AMD Athlon PRO and AMD PRO A-Series brand names; graphics under the AMD Radeon graphics and AMD Embedded Radeon graphics, as well as professional graphics under the AMD Radeon Pro graphics brand name. In addition, the company offers data center graphics under the Radeon Instinct and Radeon PRO V-series brands, as well as servers under the AMD Instinct accelerators brand.
Earlier this year, the company unveiled its new Instinct MI300 chip series, which it claims is designed for speeding up processing for generative AI, and that is the technology used by ChatGPT and other chatbots.
Rosenblatt Securities has a $200 target price on Advanced Micro Devices stock. Wall Street’s consensus target is $126.70, and the stock closed on Friday at $102.25 a share.
Broadcom
This stock has rallied back nicely, and though it remains most suitable for investors who are more aggressive, Wall Street continues to like the dividend growth. Broadcom Inc. (NASDAQ: AVGO) has an extensive semiconductor product portfolio that addresses applications within the wired infrastructure, wireless communications, enterprise storage and industrial end markets.
Applications for Broadcom’s products in its end markets include data center networking, home connectivity, broadband access, telecommunications equipment, smartphones and base stations, servers and storage, factory automation, power generation and alternative energy systems and displays.
Top analysts and many on Wall Street are quite positive on the company’s massive $10 billion share repurchase authorization through December of 2023, which represents about 4.2% of the company’s market cap.
Investors receive a 2.16% dividend. The BofA Securities target price is $1,050, while Broadcom stock has a consensus target of $817.28, lower than Friday’s $851.82 closing share price.
Marvell Technology
This chip maker is probably well under the AI radar but could be another big winner. Marvell Technology Inc. (NASDAQ: MRVL) provides data infrastructure semiconductor solutions, spanning the data center core to network edge.
The company develops and scales complex SoC architectures, integrating analog, mixed-signal and digital signal processing functionality. It offers a portfolio of Ethernet solutions, including controllers, network adapters, physical transceivers and switches; single or multiple core processors; custom application specific integrated circuits; and SoC solutions.
Marvell also provides electro-optical products, including pulse amplitude modulations, coherent digital signal processors, laser drivers, trans-impedance amplifiers, silicon photonics and data center interconnect solutions; fiber channel products comprising host bus adapters and controllers; single or multiple core processors; storage controllers for hard disk drives and solid-state-drives; and host system interfaces, including serial attached SCSI, serial advanced technology attachment, peripheral component interconnect express, non-volatile memory express (NVMe) and NVMe over fabrics.
The company is modeling a stunning $400 million in AI sales this year and $800 million in 2024. Its Computing and AI applications have now grown to become the single largest revenue driver and opportunity for Marvell’s cloud-optimized silicon platform.
B. Riley Securities has set a $77 target price, and the consensus target is $70.65. Marvell Technology stock closed at $53.50 on Friday, which was down almost 7% for the day despite better than expected quarterly results.
24/7 Wall St.Snowflake
This contender also resides in Warren Buffett’s Berkshire Hathaway portfolio, which holds over 6 million shares. Snowflake Inc. (NYSE: SNOW) provides cloud-based data platforms in the United States and internationally. Its platform offers Data Cloud, an ecosystem that enables customers to consolidate data into a single source of truth to drive meaningful business insights, build data-driven applications and share data.
Snowflake posted solid second-quarter results with revenue for the quarter coming in at $674.0 million, which was up 36% year over year. Product revenue for the quarter was $640.2 million, a strong metric of 37% year-over-year growth. Snowflake reported 402 customers with trailing 12-month product revenue greater than $1 million and 639 Forbes Global 2000 customers, which represent 62% and 17% year-over-year growth, respectively. Net revenue retention rate was 142% as of July 31, 2023.
Snowflake stock has a $220 target price at Oppenheimer. The consensus target is $199.26, and Friday’s $152.55 close was up over 3% on the day.
Taiwan Semiconductor
This is perhaps one of the safest ways to play AI, as the chip giant has multiple silos of products to keep momentum moving for the company. Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE: TSM) manufactures, packages, tests and sells integrated circuits and other semiconductor devices in Asia, Europe, the Middle East, the United States and elsewhere.
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