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Seeking Artifical Intelligence (AI) Exposure? 3 Stocks to Buy
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Artificial intelligence (AI) is Wall Street’s new obsession in 2023, with companies discussing the technology in a snowballing fashion and helping to keep sentiment positive.
The robust quarterly results we’ve received from NVIDIA (NVDA - Free Report) in 2023 have further added to the excitement, as the company has flexed the scorching-hot demand it’s been witnessing regarding its AI chips.
Still, outside of NVIDIA, there are several other stocks investors can tap into for AI exposure, including Palo Alto Networks (PANW - Free Report) , Arista Networks (ANET - Free Report) , and Microsoft (MSFT - Free Report) .
For those interested in exposure to the technology slated to change the world, let’s take a closer look at each.
Palo Alto Networks
Palo Alto Networks operates Cortex XSIAM, the company’s integrated suite of AI-driven, intelligent products for Security Operations Centers (SOCs). The stock sports the highly-coveted Zacks Rank #1 (Strong Buy), with earnings expectations rising following strong quarterly results.
Image Source: Zacks Investment Research
The company’s forecasted growth is rock-solid, with earnings forecasted to climb 20% in its current year on 19% higher revenues. Peeking ahead to FY25, estimates allude to a further 20% earnings growth paired with an 18% sales bump.
Image Source: Zacks Investment Research
Palo Alto’s quarterly consistency is undoubtedly worth highlighting, as illustrated below by the green arrows. The company has exceeded the Zacks Consensus EPS Estimate in ten consecutive quarters, exceeding bottom line expectations by 12% in its latest release.
Image Source: Zacks Investment Research
Arista Networks
Arista Networks provides the best solution for GPU and Storage interconnects driving AI/ML workloads using IP/Ethernet switches. The stock currently sports a Zacks Rank #2 (Buy), with the revisions trend particularly notable for its current fiscal year.
Image Source: Zacks Investment Research
The company’s top line growth has remained robust, recently accelerating. And for its current fiscal year, ANET is forecasted to expand its revenues a further 18% year-over-year. Strong sales are the foundation of meaningful earnings growth.
Image Source: Zacks Investment Research
Keep an eye out for the company’s next quarterly release scheduled for October 30th, as the Zacks Consensus EPS Estimate of $1.58 suggests 26% growth from the year-ago period. Our consensus revenue estimate stands at $1.5 billion, 25% higher than the year-ago figure.
Microsoft
Microsoft’s AI platform, Azure AI, sports a unique position with best-in-class, enterprise-scale, trusted solutions. Data scientists and machine learning engineers can utilize Azure Machine Learning to build, train, deploy, and operate large-scale AI models.
In addition to AI exposure, MSFT shares provide a passive income stream; MSFT shares currently yield a respectable 0.8% annually, with its payout growing by nearly 10% annualized over the last five years.
Image Source: Zacks Investment Research
Investors will have to fork up a premium for MSFT shares, with the current 29.3X forward 12-month earnings multiple modestly above the 28.4X five-year median. Still, the current value is well below 2022 highs of 34.6X.
Image Source: Zacks Investment Research
Bottom Line
Artificial intelligence is officially here to stay, with market titan NVIDIA exciting investors all year long with its quarterly results.
Of course, there’s more than just NVIDIA, as investors can obtain exposure through Palo Alto Networks (PANW - Free Report) , Arista Networks (ANET - Free Report) , and Microsoft (MSFT - Free Report) .
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Seeking Artifical Intelligence (AI) Exposure? 3 Stocks to Buy
Artificial intelligence (AI) is Wall Street’s new obsession in 2023, with companies discussing the technology in a snowballing fashion and helping to keep sentiment positive.
The robust quarterly results we’ve received from NVIDIA (NVDA - Free Report) in 2023 have further added to the excitement, as the company has flexed the scorching-hot demand it’s been witnessing regarding its AI chips.
Still, outside of NVIDIA, there are several other stocks investors can tap into for AI exposure, including Palo Alto Networks (PANW - Free Report) , Arista Networks (ANET - Free Report) , and Microsoft (MSFT - Free Report) .
For those interested in exposure to the technology slated to change the world, let’s take a closer look at each.
Palo Alto Networks
Palo Alto Networks operates Cortex XSIAM, the company’s integrated suite of AI-driven, intelligent products for Security Operations Centers (SOCs). The stock sports the highly-coveted Zacks Rank #1 (Strong Buy), with earnings expectations rising following strong quarterly results.
Image Source: Zacks Investment Research
The company’s forecasted growth is rock-solid, with earnings forecasted to climb 20% in its current year on 19% higher revenues. Peeking ahead to FY25, estimates allude to a further 20% earnings growth paired with an 18% sales bump.
Image Source: Zacks Investment Research
Palo Alto’s quarterly consistency is undoubtedly worth highlighting, as illustrated below by the green arrows. The company has exceeded the Zacks Consensus EPS Estimate in ten consecutive quarters, exceeding bottom line expectations by 12% in its latest release.
Image Source: Zacks Investment Research
Arista Networks
Arista Networks provides the best solution for GPU and Storage interconnects driving AI/ML workloads using IP/Ethernet switches. The stock currently sports a Zacks Rank #2 (Buy), with the revisions trend particularly notable for its current fiscal year.
Image Source: Zacks Investment Research
The company’s top line growth has remained robust, recently accelerating. And for its current fiscal year, ANET is forecasted to expand its revenues a further 18% year-over-year. Strong sales are the foundation of meaningful earnings growth.
Image Source: Zacks Investment Research
Keep an eye out for the company’s next quarterly release scheduled for October 30th, as the Zacks Consensus EPS Estimate of $1.58 suggests 26% growth from the year-ago period. Our consensus revenue estimate stands at $1.5 billion, 25% higher than the year-ago figure.
Microsoft
Microsoft’s AI platform, Azure AI, sports a unique position with best-in-class, enterprise-scale, trusted solutions. Data scientists and machine learning engineers can utilize Azure Machine Learning to build, train, deploy, and operate large-scale AI models.
In addition to AI exposure, MSFT shares provide a passive income stream; MSFT shares currently yield a respectable 0.8% annually, with its payout growing by nearly 10% annualized over the last five years.
Image Source: Zacks Investment Research
Investors will have to fork up a premium for MSFT shares, with the current 29.3X forward 12-month earnings multiple modestly above the 28.4X five-year median. Still, the current value is well below 2022 highs of 34.6X.
Image Source: Zacks Investment Research
Bottom Line
Artificial intelligence is officially here to stay, with market titan NVIDIA exciting investors all year long with its quarterly results.
Of course, there’s more than just NVIDIA, as investors can obtain exposure through Palo Alto Networks (PANW - Free Report) , Arista Networks (ANET - Free Report) , and Microsoft (MSFT - Free Report) .