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The artificial intelligence (AI) revolution is reshaping industries across the globe, fueling interest in the stock market. For investors, identifying the top AI stocks to buy in September 2024 is essential for capitalizing on the immense potential that AI-driven innovations present. With rapid advancements in AI tools and applications, companies like Meta Platforms Inc., NVIDIA Corp, and Alphabet Inc. are well-positioned for long-term growth. This article delves into these top performers, offering insights into why they are among the best AI stocks to buy this month.
Meta Platforms continues to impress with its focus on AI and spatial computing. Analysts highlight Meta's open-source AI tools like Llama, PyTorch, and FAISS as key drivers positioning the company ahead in the AI race. Meta's AI investment is aimed at improving ad delivery, user engagement, and monetization, with potential long-term benefits. Despite concerns about high AI spending, Meta's robust free cash flow margin of 30% and US$35 billion in net cash provide a solid foundation for future growth. The company is well-positioned to maintain its dominance in AI, particularly in the open-source arena.
Apple's focus on AI to boost iPhone upgrades is under scrutiny. Although AI is seen as a driver for customer upgrades, the long-term trend of declining mobile carrier upgrade rates poses a risk. With a forward P/E multiple of 35x, higher than its 5-year average, and a forward PEG ratio of 3.33, Apple’s valuation appears steep. The company’s reliance on iPhone sales for growth is being tested, and AI’s potential impact on breaking the upgrade cycle is still uncertain.
NVIDIA remains a dominant player in the data center and AI space. CEO Jensen Huang’s emphasis on the transition to accelerated computing signals the potential for massive growth. Despite some delays in the launch of its Blackwell chip, the company’s core AI growth thesis remains strong. NVIDIA is poised to benefit from a trillion-dollar transition in data centers, driven by generative AI.
Despite facing antitrust scrutiny, Google continues to thrive, with search revenue up 13.7% YoY. Alphabet’s dominance in search (91.06% market share) and growing revenues from Cloud and YouTube Ads (on track to reach a US$100 billion run rate) provide strong growth catalysts. Its position in AI and cloud computing makes it a formidable competitor, with Google Cloud emerging as a critical player in the AI revolution.
Micron is dealing with short-term headwinds, as analysts have downgraded the stock due to weaker DRAM and NAND markets. However, the DRAM market is expected to recover by 2025, with high bandwidth memory (HBM) production projected to drive significant sales growth. Micron's investment in AI and memory production could set the stage for future success.
AMD’s impressive data center revenue growth (49% YoY) and its roadmap for competitive GPU solutions place it as a key player alongside NVIDIA. AMD's upcoming MI300 Series accelerators and plans for annual AI chip releases position it for continued success in the AI and HPC markets. Analysts are optimistic about AMD’s future growth trajectory.
Adobe is experiencing mixed reactions, with analysts divided over its potential to benefit from the AI boom. On one hand, AI tools threaten its market for low-budget designs, while on the other, Adobe is launching AI-powered tools to drive revenue growth. Its soft Q4 guidance has cast some doubt, but its innovative AI integration could prove beneficial in the long term.
Oracle’s strength lies in its Cloud services, with 21.3% YoY growth. The company’s infrastructure is crucial for AI development, with Oracle building massive GPU clusters for AI training. Oracle's revenue outlook and strong growth in Cloud make it a key player in the AI space, with analysts expecting continued double-digit growth rates.
Product and service offerings such as AI-focused servers, and enhancements in PC pricing have made it to UBS’s list of tech picks for 2024. The second-quarter effect appears to be positive and sustainably so as the firm operates from a favorable cycle involving AI and PC. Both companies are firmly established in the technology industry and there is heightened focus on AI and cloud services as key factors that define the companies’ growth paths.
Arista Networks Inc. will benefit from the rising requirement for AI-enhanced high-speed networks. Meta Platforms reportedly to order a batch of over 100K NVIDIA H-100 GPUs for its new Llama language model; networking hardware-suggestion – Arista Networks, according to Evercore ISI. Arista has good experience working with Meta and has already provided switches for the 24,000-GPU cluster. It could also open new doors to boost Arista’s US$750 Million target of AI Revenues for the financial year 2025. Recognized for the open Ethernet design together with Arista EOS, the company continues to be a leading provider of the high-performance networking solutions.
While the AI advancement in technology is gradually becoming the new norm, investors should embrace it by coming up with Top AI Stocks to Buy. Some of the companies driving the innovation in AI include Meta Platforms Inc, NVIDIA Corp, Alphabet Inc, Apple Inc, and Advanced Micro Devices Inc, offering robust growth prospects for investors. The following are the companies that are developing the next generation of AI and are well-equipped to offer long-term returns. Whether you are an experienced investor or a beginner in stock market trading these are the Top AI Stocks to Buy in September 2024.
