Artificial intelligence (AI) stocks are massive opportunities and market movers. A recent report from PwC forecasts that AI could contribute $15.7 trillion to the global economy in 2030. While AI has taken the world by storm, analysts point out that the technology is still in its infancy. Companies are still uncovering ways to deploy and monetize it.
While it’s still early days, certain companies have emerged as dominant players in the AI sector and are shaping the technology and its role in all our lives. The stock of chipmakers and leading mega-cap technology companies have been the biggest beneficiaries of the AI trade. These stocks are likely to continue to dominate. As such, investors might want to remain overweight on those companies’ shares.
Here are three AI stocks that could grow your wealth.
Advanced Micro Devices (AMD)
Many analysts are bullish on chipmaker Advanced Micro Devices (NASDAQ:AMD) heading into the second half of the year. Wells Fargo (NYSE:WFC) just raised its price target on AMD stock to $205 per share from $190 and kept an “overweight” buy equivalent rating. Susquehanna raised its price target on the stock to $200 from $185 and kept its “buy” rating on the shares.
The consensus among 36 analysts who cover the company is that AMD stock is a “strong buy” with a median price target of 6% above current levels. There isn’t a single “sell” rating on the stock. This is after AMD has enjoyed a strong rally, with its shares up 57% in the last 12 months. Analysts like AMD have rolled out new AI microchips and processors in recent months and are taking market share from its main rivals in the chip sector.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) stock has been choppy since its shares split on a 10-for-1 basis in June. However, analysts still see an upside ahead for this AI stock. This is especially true with the share price hovering around $130 on a split-adjusted basis. Analysts at Morgan Stanley (NYSE:MS) have raised their price target on Nvidia stock to $144 from $116. They cited strong demand for the company’s AI chips in Asia. Stifel Financial (NYSE:SF) lowered its price target on NVDA stock to $165 a share from $114.
As with AMD, Nvidia stock enjoys a consensus “strong buy” rating among 41 professional analysts who track the company’s progress. Although NVDA stock has nearly tripled in the last 12 months, analysts have a median price target on the shares that is nearly 10% higher than current levels. The bottom line is that Nvidia remains the leader in microchips and processors that power AI applications and models, and its growth is expected to remain red hot for the foreseeable future.
Apple (AAPL)
Apple’s (NASDAQ:AAPL) stock has been on a tear since the company unveiled its “Apple Intelligence” AI strategy in June. Since CEO Tim Cook outlined how Apple plans to catch up in the AI race, the company’s stock has rallied 20% and is now trading near its all-time high. Key to Apple’s plans are an AI-infused Siri digital assistant and the addition of OpenAI’s ChatGPT AI technology to future iPhones.
Analysts have praised the AI strategy and have recently upgraded the stock. Bernstein analysts raised their price target on Apple stock to $240 a share from $195, citing growing AI monetization opportunities. Wedbush reiterated its $275 a share price target and “outperform” buy equivalent rating. While Apple stock currently has a “moderate buy” consensus rating, the majority of analysts who cover the company (24 in all) rate the stock a “buy.” There’s currently one “sell” rating on AAPL stock.
On the date of publication, Joel Baglole held a long position in NVDA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.