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3 AI Players Beyond Nvidia Poised for Takeoff After Strong Earnings

Published 14/03/2024, 14:07
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  • Three AI outsiders have recently reported solid results.
  • However, the sharp rise in their share prices in recent months raises the question of whether their potential has been exhausted.
  • Let's take a look at the recent results, financial profile, and targets for each of these stocks, with the help of InvestingPro.
  • Take advantage of the InvestingPro platform, including IA ProPicks strategies thanks to an exceptional -10% discount (more details on the promotion at the end of the article).
  • In recent days, Nvidia (NASDAQ:NVDA) stock has retreated after hitting a new all-time high of $974 last Friday.

    The looming $1,000 resistance could be the next big hurdle for the bulls. For investors eyeing the AI boom, exploring tactically astute opportunities might be wise.

    Investing in AI offers numerous avenues. While computer chipmakers like Nvidia are popular choices, there are other angles worth exploring.

    In this article, we'll therefore review 3 AI stocks that are less high-profile than Nvidia and that recently reported strong quarterly results, and which at least deserve their place on investors' radar, if not immediately displaying an ideal profile for buying.

    We'll use the InvestingPro analysis and strategy platform to review the latest results, profile each stock using ProTips, and assess potential using InvestingPro models and analyst forecasts.

    1. Oracle

    Oracle Corporation (NYSE:ORCL) is the last stock on today's list to report earnings, having unveiled its quarterly update on Monday, March 11.

    It reported EPS of $1.41, ahead of expectations by 2.4%, and sales of $13.28 billion, very slightly below expectations, which didn't prevent the stock from taking off by 13.45% against the publication.

    Oracles Earnings

    Source: InvestingPro

    ProTips, which summarizes the masses of financial data available for each stock in an intelligible list of strengths and weaknesses, InvestingPro found 10 positive ProTips, 5 negative, and 1 neutral.

    ProTips Oracle

    Source: InvestingPro

    Positives include a strong performance over the past three months, the fact that analysts expect the company to be profitable this year, and the fact that it has been profitable over the past 12 months.

    On the negative side, ProTips notes that the stock has high valuation multiples by several measures and that 11 analysts have lowered their forecasts for the coming period.

    Finally, on the subject of potential targets for the stock, it's worth noting that analysts see limited upside potential for Oracle at current share prices.

    Indeed, the 30 professional analysts who follow the stock have an average target price of $135.06, just 7.5% above the current price.

    Oracle Fair Value

    Source: InvestingPro

    Furthermore, the InvestingPro Fair Value, which synthesizes 14 recognized financial models in the case of Oracle, is limited to $106.32, suggesting a downside risk of over 15%.

    2. Broadcom

    For Broadcom (NASDAQ:AVGO), the results for the last quarter of 2023 published on March 7 also exceeded expectations, by 5.4% for EPS and 2.1% for sales:

    Broadcom Last Reported Earnings

    Source: InvestingPro

    In terms of share profile, the ProTips identify 10 strong points, alongside 7 weak ones.

    ProTips Broadcom

    Source: InvestingPro

    Among the positive factors, ProTips notes that Broadcom has increased its dividend for 14 consecutive years, that analysts are forecasting sales growth for the current year, and that the stock has posted solid long-term returns.

    Negative ProTips, on the other hand, note that valuation multiples are high and that 17 analysts have lowered their forecasts for the period ahead.

    Regarding the stock's outlook, analysts on average have a target price of $1,498, which corresponds to a potential upside of 19% compared to Wednesday's closing price.

    Broadcom Fair Value

    Source: InvestingPro

    In contrast, InvestingPro's Fair Value is more conservative, at $1060, which translates into a substantial downside risk of over 15%.

    3. CrowdStrike

    Of the 3 stocks on this list, CrowdStrike Holdings Inc (NASDAQ:CRWD) is undoubtedly the one to have surprised (positively) with its results.

    On March 5, the company announced that its earnings per share (EPS) exceeded the consensus by 15.3%, while its sales were in line with expectations.

    CrowdStrike Earnings

    Source: InvestingPro

    The InvestingPro ProTips also identifies 10 major strengths, while highlighting only 4 weaknesses.

    ProTips CrowdStrike

    Source: InvestingPro

    Strengths include the fact that analysts expect the company to be profitable this year and that it has been profitable over the past 12 months.

    Negatives include the fact that several closely watched valuation ratios are above the average of CrowdStrike's peers.

    About analysts' targets and valuation model calculations, we note that, as with the other two stocks on this list, the outlook is mixed.

    CrowdStrike Fair Value

    Source: InvestingPro

    While analysts predict an average target of $390.74, suggesting a potential upside of 17.6%, InvestingPro's Fair Value sits at only $270.54. This indicates an 18.6% gap below the current price.

    Conclusion

    Although these 3 companies recently posted good quarterly results and analysts believe their stocks could still rise, caution is advised due to valuation models and ratios suggesting that waiting for a better price might be wise, especially with upcoming quarterly reports.

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    Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, counseling or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. As a reminder, any type of asset is evaluated from multiple perspectives and is highly risky, and therefore, any investment decision and the associated risk remains with the investor.

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