Seven major tech stocks boosted S&P 500 Index They’ve done well in the bull market so far — because investors like their solid, well-established business and their promise in the high-potential artificial intelligence (AI) market. Some are bigger AI players than others, but they are all involved in the technology in some way. Investors are enthusiastic about artificial intelligence because it may improve earnings and stock performance over time.
And, as mentioned, stock performance has already begun, with the “Big Seven” stocks all rising by double or triple digits over the past three years. That’s great, but it leads to one thing that might deter investors from buying at least some players right now: stocks become more expensive.
In fact, some analysts and investors are even worried about an AI bubble. Although earnings reports and demand commentary from technology companies did not support the view that a bubble was forming, these concerns weighed on the S&P 500 in the first few weeks of November. Profits climbed and companies reported high demand for artificial intelligence products and services.
Still, it’s clear that many AI stocks are expensive today. But the good news is that bargains exist — even among the top seven AI stocks . Two in particular may offer investors a once-in-a-decade buying opportunity before the New Year: They are the cheapest of the Big Seven, but given their potential in artificial intelligence, that may not last long. Let’s look at these stocks to buy now.
meta platform(NASDAQ: META)trading at 26 times forward earnings, is the cheapest of the top seven stocks right now. This is a great deal considering the company’s long history of profitable growth, which gives it the ability to invest in artificial intelligence and reward shareholders with dividends.
You probably know Meta primarily for its social media leadership — the company owns a number of apps, including Facebook and Instagram — and the platform has been its ticket to revenue growth. Advertisers reach us through Meta, which generates billions of dollars in revenue and profits for the company.
Meta now aims to use artificial intelligence to revolutionize advertising, automating advertising on its platform and making ads more successful. At the same time, the presence of artificial intelligence in its applications may keep us using them for longer. All of this could lead advertisers to increase their ad spend here. Meta’s investments in artificial intelligence may also lead to the development of new products and services, driving revenue growth.
All of this makes Meta look cheap at today’s valuation.
letter(Nasdaq: Google)(Nasdaq: Google) It is the second cheapest company among these seven technology giants, trading at 29 times forward earnings. Like Meta, Alphabet likely won’t stay at this level long term as its AI investments drive revenue higher.
Alphabet’s use of artificial intelligence in its Google search business should increase ad revenue as it takes a similar route to Meta – improving the overall ad experience and ad results. Alphabet has also benefited from artificial intelligence through its Google Cloud business – here it offers customers a wide range of artificial intelligence products and services that have been driving revenue growth.
For example, in the most recent quarter, Google Cloud revenue grew 34% to more than $15 billion, and Alphabet’s total quarterly revenue exceeded $100 billion for the first time. As a leading cloud computing provider, Google Cloud should be well-positioned to attract AI customers looking for capacity — demand has surged and shows no signs of slowing down. Alphabet said during the quarter that demand for artificial intelligence infrastructure and generative artificial intelligence systems drove growth in cloud revenue.
So Alphabet, like Meta, is poised for more growth as the AI ​​craze rages on, which means buying these stocks at today’s levels could be a once-in-a-decade opportunity.
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Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions and recommendations on Alphabet and Meta platforms. The Motley Fool has a disclosure policy.
These two top seven artificial intelligence stocks could provide investors with a once-in-a-decade buying opportunity before the new year. Originally posted by The Motley Fool
