gave Nasdaq Composite The index has had a great year so far, and we’re only a few months into 2024. Technology stocks, which dominate the index, are roaring higher as investors favor growth and innovation such as artificial intelligence (AI) stocks, chip designers, and cloud computing players. This has pushed the index to record highs, confirming that it has reached bull territory.
And if history is a guide, the Nasdaq’s winning streak may not end. Over the last six stock market periods starting in 1990, the Nasdaq has averaged a 64% gain in the first two years of positive performance. The index was up about 43 percent last year and has climbed 8 percent so far this year — so if it follows historical patterns, the Nasdaq could rise this year. Here are my top AI growth stocks to buy before…
Amazon
Amazon (NASDAQ: AMZN ) Shares are up 20% so far this year, and this top stock is just getting started. That’s why Amazon is an ideal AI stock to buy: The company is using the technology to improve its e-commerce operations, and it offers cloud computing services to customers through its Amazon Web Services (AWS) unit. is also selling AI products and services. So, it is benefiting from AI in two ways.
For example, Amazon uses AI to help it streamline fulfillment center operations and choose the shortest delivery routes. This is key because it can reduce the company’s service costs.
And AWS has made solving every level of AI a priority, so it offers customers chips for their training and estimation programs as well as a fully managed service that lets them use their own. Allows customization of large language models (LLMs) for . Considering AWS is the world’s leading cloud services player, it already has a huge audience — and ready to launch AI projects.
So, it’s clear that AI can have a significant impact on Amazon’s revenue growth over time by streamlining e-commerce processes and reducing costs there, and increasing AWS revenue.
Today, Amazon shares trade for 43 times forward earnings estimates, which seems like a fair price for a growth stock — especially with a solid profitability picture and a compelling AI strategy. .
Intel
Intel (NASDAQ: INTC ) AI has struggled to stay ahead of the race, but the tide has turned recently. The chip company introduced a portfolio of AI products late last year that could up its game and drive a new era of growth. One example is the Intel Core Ultra Mobile processor family, which is an important step in ushering in the age of the AI personal computer — high-powered computers that can perform many AI tasks.
Intel also announced its latest Intel Xeon processor family with AI acceleration and its Gaudi 3 AI accelerator. I wouldn’t expect these innovations to threaten the chip market giant. Nvidia, but that’s okay. Given the opportunity — with the AI market predicted to reach $1 trillion by the end of the decade — there’s room for multiple companies to gain market share and leverage. Intel can be one of them thanks to its new and upcoming innovations.
On top of that, Intel’s move to open up its manufacturing network to others, with a goal of becoming the world’s second-largest foundry by 2030, could supercharge growth. It’s a big bet, but one that could bring big rewards down the road. Intel has already won commitments from four customers for its 18A process and signed five advanced packaging deals.
Intel shares trade for 29 times forward earnings estimates, which factor in the company’s AI and foundry prospects, as well as analyst estimates for double-digit annual growth over the next five years. So Intel could be poised for a rebound, making now an ideal time to acquire the technology giant.
Should you invest $1,000 in Amazon right now?
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John Mackey, former CEO of Whole Foods Market, is a member of the board of directors of The Motley Fool, an Amazon subsidiary. Adria Cimino has positions at Amazon. The Motley Fool has positions and recommends Amazon and Nvidia. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short May 2024 $47 calls on Intel. The Motley Fool has a Disclosure Policy.
History Says the Nasdaq Will Rise This Year: My Top Artificial Intelligence (AI) Growth Stocks to Buy was published by The Motley Fool.