Artificial intelligence (AI) appears to be a game-changing technology that is still in the early innings, and the recent weeks of high-tech sector pullbacks have opened up opportunities for investors to scooped up some bargains among players in the field.
These are three that look like simple AI stocks to buy now.
nvidia (NASDAQ: NVDA) The child of AI posters and its industry-leading hardware helped it become one of the world’s largest companies. But its inventory was also one of the most punished by recent high-tech sales.
However, its powerful attributes have not been changed, nor has the AI infrastructure build out story changed. Nvidia is the dominant manufacturer of graphics processing units (GPUs), and is the main chip used to train AI models and perform AI inference for impressive parallel processing power. While these chips were originally designed to improve graphics rendering in video games, the company has created a free software platform called CUDA that allows developers to program GPUs to perform other tasks.
As a result, most developers who learned to program GPUs did so using CUDA. This made switching to other hardware providers difficult. The company has since built a collection of microservices and libraries dedicated to AI. In short, these moves have given the company a huge moat, as demonstrated with a 90% market share in the GPU space.
Meanwhile, spending on AI infrastructure continues to increase. Cloud computing infrastructure providers are actively expanding their AI processing power to meet demand, while companies developing AI models are exponentially demanding computing power (and therefore GPUs). All this suggests that Nvidia should have another strong growth year in 2025.
Meanwhile, the recent stock pullback has left Nvidia’s shares at an attractive valuation. It trades at a 25x 2025 Analyst estimate and a positive price (P/E) ratio of price/revenue (PEG) ratio below 0.5. Positive PEG ratios below 1 are generally considered to indicate an undervalued inventory.
Image source: Getty Images
Trading with a forward P/E ratio of 18.5, alphabet (NASDAQ: Google)(NASDAQ: GOOG) Another AI stock thrown at a bargain bottle. Nevertheless, it owns a great set of not only some attractive new businesses but also major businesses.
The company’s cloud computing unit was the strongest grower thanks to AI-related demand. Unit revenue rose 30% in the last quarter, and profitability rose sharply. Meanwhile, Alphabet has developed its own custom AI chip with the help of Broadcom, saying that the hardware will help reduce inference time and costs. This helps the alphabet give the great cost advantage that allows the company to continue to make good use of its large cloud business.
The story continues
Alphabet is also beginning to incorporate new Gemini 2.0 AI models across its business, including Google Search. This not only provides more convenient search results, but also allows for improved AI overviews.
While some investors continue to worry about the potential impact that using AI chatbots such as CHATGPT may have in traditional search businesses, Google has historically provided ads related to 20% of queries. New ad forms attached to AI-generated results will allow you to more monetize most searches that are not currently serving your ads.
Additionally, the company has new business opportunities for the world’s most viewed video platform (YouTube), a powerful digital ad network, and quantum computing and Robotaxis (WAYMO).
Salesforce (NYSE: CRM) He is a leader in customer relationship management (CRM) software and is also entering the automation, analytics and employee communications market through the acquisitions of Mulesoft, Tableau and Slack. However, Agent AI is expected to become the next major growth driver.
Agent AI is the next evolution of AI beyond the generation AI. With generator AI programs such as Gemini or ChatGpt, users enter a prompt and the AI program responds by creating content in the form of text, images, or videos. Agent AI takes the use case a step further by creating AI agents that perform a series of tasks based on initial instructions, with little human monitoring required.
Salesforce is now in Agent AI with the new AgentForce. Although introduced only in October, the company has already implemented 5,000 Agent Force transactions, including 3,000 payment transactions. The company offers out-of-the-box AI agents that can handle specific tasks, such as customer service interactions, within solutions that can be used to customize AI agents.
AgentForce is a consumption-based product that costs $2 per interaction. So the more useful the agents become and the customers use them, the greater the Salesforce opportunity. We also launched AgeentExchange to help us expand our use cases with over 200 initial partners and hundreds of pre-built apps, actions, integrations and templates.
The stock is highly rated at 26 forward P/Es. Business as software as a service usually orders a high rating due to the repeated predictable nature of revenue.
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Suzanne Frey, an executive at Alphabet, is a member of the board of directors of Motley Fool. Geoffrey Seiler has positions in Alphabet and Salesforce. Motley Fool has positions for Alphabet, Nvidia and Salesforce, and is recommended. Motley Fools have a disclosure policy.
3 Easy AI Stocks to Buy Now Originally published by The Motley Fool
