3 Artificial Intelligence (AI) Stocks That Are Screaming Buys in April
Artificial intelligence (AI) has captivated the tech world over the last year, skyrocketing countless stocks. However, AI is by no means a new concept. So you might be asking yourself, why has it suddenly blown up?
While computers are excellent at numerical tasks and data processing, they haven’t always been capable of natural human capabilities like language, visual processing, and various generative tasks. However, AI bridges that gap, using machine learning to complete tasks that typically require a human.
As a result, advances in AI can potentially benefit a wide range of markets, including consumer tech, autonomous vehicles, healthcare, education, and more. And with the market and technology still in their infancy, it seems the sky’s the limit for AI.
In fact, the AI sector is projected to expand at a compound annual growth rate of 37% through 2030, which would see it hit a valuation nearing $2 trillion. The market’s significant potential suggests it’s not too late to invest in and profit from the tailwinds of AI long into the future.
So here are three AI stocks that are screaming buys this April.
1. Intel
It hasn’t been easy to be an Intel (NASDAQ: INTC) investor in recent years, with its stock down 27% since 2022. However, the company has made significant changes to its business model over the last year that could make it an attractive long-term option for investing in AI.
Intel is expanding in the market by launching its new line of Gaudi 3 AI graphics processing units (GPUs). The chips were released earlier this month, and claim to have 50% better inference and 40% better power efficiency than similar offerings from Nvidia.
Additionally, Intel is using its years of dominance and expertise in central processing units (CPUs) to secure a top spot in AI by expanding the AI capabilities of its processors.
It’ll take time for Intel to develop its AI business and catch up to rivals like Nvidia and AMD. However, the chart above indicates that Intel is potentially the best-valued AI chip stock. Intel has the lowest forward price-to-earnings ratio (P/E) among these companies, making it a relative bargain.
The company is on an exciting growth path, and too good to pass up right now.
2. Apple
Apple (NASDAQ: AAPL) has been quieter on the AI front than many of its peers. However, the company is known for taking its time with new technology. Apple isn’t necessarily known for pioneering innovations, but for perfecting established technology with its own design language and then rising to dominance in the industry by attracting billions of users.
Markets such as Bluetooth headphones, smartwatches, and tablets were each led by different companies before Apple appeared on the scene. However, the launch of products like AirPods, the Apple Watch, and the iPad have made its competitors almost a distant memory. As a result, it’s not too concerning that Apple isn’t currently one of the top dogs in AI.
The tech giant appears to be quietly honing its AI technology. Meanwhile, its leading market shares in multiple areas of consumer tech could see it steer the industry and become a major growth driver in getting AI into the hands of the average shopper.
Apple shares saw a slight surge on April 11 when Bloomberg reported that the company was overhauling its entire Mac lineup to expand its AI capabilities and meet soaring demand for such hardware. Meanwhile, the tech company has been gradually adding new AI features across its product lineup, including improvements to the iPhone’s Siri and new gestures for the Apple Watch.
Last year Apple generated nearly $107 billion in free cash flow, considerably more than some of AI’s most prominent players, including Microsoft, Meta Platforms, and Amazon. This figure suggests that Apple is well-equipped to expand in the budding AI market and keep up with its rivals over the long term.
Apple’s stock is trading at 25 times forward earnings, making it a reasonable buy and an exciting way to invest in AI.
3. Alphabet
Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) has been slightly overshadowed in AI over the last year by cloud rivals Microsoft and Amazon. However, the company is easily one of the most exciting AI stocks for long-term gains.
The company is home to a long list of potent brands, including Google, Chrome, Android, and YouTube. These services regularly attract billions of users, giving Alphabet ample opportunity to tout its AI offerings.
As a result, the company’s recent pivot to the lucrative market is promising. Earlier this year, Alphabet launched Gemini, its most advanced AI model to date. Its debut wasn’t perfect, with the model making some mistakes at its launch presentation, which forced the company to temporarily pause its image generation services.
However, Alphabet is moving forward in its AI development. The company recently announced plans to consolidate its Deep Mind and Research teams to promote efficiency in its AI division. Alphabet will move its AI-focused Responsible AI teams to Deep Mind, where its models are built.
Like Intel and Apple, Alphabet’s shares are a bargain compared to other AI stocks. Its forward P/E currently sits at an attractive 23, significantly lower than Microsoft’s 34 and Amazon’s 43.
Alphabet’s stock is a screaming buy this month, and one you won’t want to miss out on.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Dani Cook has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Apple, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends Intel and recommends the following options: long January 2025 $45 calls on Intel, long January 2026 $395 calls on Microsoft, short January 2026 $405 calls on Microsoft, and short May 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.
3 Artificial Intelligence (AI) Stocks That Are Screaming Buys in April was originally published by The Motley Fool
