Last year was a groundbreaking year for artificial intelligence (AI), as both Wall Street and Main Street were introduced to the power of AI’s next-generation algorithms. Investors quickly realized that some of the best-performing stocks in the market had AI at their core, leading Bank of America analyst Michael Hartnett to coin the term “Magnificent Seven” to describe these high-growth stocks.
The Magnificent Seven stocks include Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. While these companies have seen significant success, there are other AI stocks that have the potential for explosive growth and are not part of this elite group.
One such stock is Arm Holdings (NASDAQ: ARM), known for creating the blueprints for widely used central processing units (CPUs). Arm’s designs are essential for cloud computing, hyperscale computing, and data centers, making it a key player in the AI space. The company’s recent financial results show record revenue and strong growth potential, with a forward price/earnings-to-growth (PEG) ratio indicating it is undervalued.
Another AI stock with promising growth potential is Super Micro Computer (NASDAQ: SMCI), which provides specialty servers designed for AI processing. The company’s focus on energy efficiency and strong financial performance make it a compelling investment opportunity, with a forward PEG ratio suggesting it is undervalued.
Lastly, Palantir Technologies (NYSE: PLTR) is a veteran in the AI space, offering data mining and business analytics services powered by AI. The company’s recent revenue growth and innovative AI solutions make it a standout choice for investors looking for exposure to the AI market.
While the Magnificent Seven stocks have captured the spotlight, these three AI stocks offer unique opportunities for investors seeking explosive upside potential. With strong financial performance and innovative AI solutions, Arm Holdings, Super Micro Computer, and Palantir Technologies are worth considering for investors looking to diversify their AI portfolios.
