Do not distort. The AI hype is real. Some of the world’s most influential investors have commented on the subject, and the consensus is that “this could be bigger than the Internet.” No, it’s never too late to join.
This article describes C3.ai. AI We discuss earnings and three AI stocks that investors may have overlooked.Palantir PLTRMarvel Technology MRVLand Arista Networks ANET The stock has done very well this year and should benefit greatly from developments in generative AI.
Image Source: Sachs Investment Research
C3.ai
One of the companies ahead of its time when it comes to AI technology is C3.ai, which announced earnings after the market closed on Wednesday. Obviously, C3.ai has ticker symbol AI.
C3.ai beat expectations for the quarter with EPS of -$0.13 vs. -$0.17 and revenue of $72.4 million vs. $71.3 million.
Shares fell on Thursday on the news. However, if you look at the chart below, you can see just how strong AI stocks are doing, up 213% year-to-date. It’s also worth noting that despite the price drop, investors continued to buy throughout the day, trading more than 10% below their lows.
Image Source: TradingView
C3.ai is an enterprise AI application software company. The company has built and deployed a portfolio of industry-specific, AI-enabled SAAS products that enable organizations to take advantage of new technologies. C3.ai’s customers include Baker Hughes BKR, Koch Industries, Bank of America BAC, Consolidated Edison ED, the United States Air Force, and many other leading companies.
AI has developed dozens of different software applications used across industries. It ranges from supply chain production schedule management to real estate valuation and energy management. These SAAS products work with companies and organize their data to provide previously unnoticed insights.
Best of all, they are unique tools that enable analysts, investigators, and executives to do their jobs better.
In a press release, Silicon Valley veteran and former founder Tom Siebel made some powerful cries about artificial intelligence and the future of his company.
“I believe there is general agreement today that the market for enterprise AI applications is significantly larger and growing at a higher rate than experts predicted,” Siebel said. said. And, “As the enterprise AI market evolves, it seems that the bulk of the demand is increasingly for turnkey enterprise AI applications rather than development tools.” This is going to be huge for business.
C3.ai has a substantial cash position of $812 million and expects the business to become profitable by the end of FY24. C3.ai currently holds Zacks Rank #3 (Hold), indicating a mixed earnings fix.
Image Source: C3.ai Investor Relations
Palantir
Palantir shares have surged since its most recent quarterly report, up nearly 100% in less than a month. In its report, PLTR said it had achieved profitability for the first time in a year and expected to be profitable each quarter for the remainder of the year.
“The depth of our commitment and demand for our new Artificial Intelligence Platform (AIP) is unprecedented,” he said. Like C3.ai, Palantir has been ahead of the curve in leveraging AI technology.
Image Source: TradingView
Palantir is a software company specializing in data analytics and artificial intelligence. Founded in 2003 by a group of entrepreneurs including Peter Thiel, the company has gained a lot of attention for its innovative approach to processing large and complex data sets.
Palantir’s software platforms, including Gotham and Foundry, enable organizations to integrate, analyze, and visualize vast amounts of data, enabling them to make more informed decisions and solve complex problems. . The company serves a wide range of sectors including government agencies, defense, finance, healthcare and more.
As an early adopter of generative AI technology, Palantir believes that modern iterations can be easily integrated on top of current software. PLTR also believes in the tremendous power of this new technology and is focused on designing products for human oversight of all applications.
Since its IPO in 2019, Palantir has grown its revenue by 28% annually, earning $1.23 billion in the last 12 months. PLTR currently holds a Zacks Rank #3 (Hold), demonstrating variability in earnings revisions.
marvel technology
Marvell Technology is a leading semiconductor company that designs and develops integrated circuits for various markets such as data storage, networking and wireless communications. Marvell’s high-performance semiconductor solutions power data centers, cloud computing, IoT devices, and automotive systems. The company’s portfolio includes Ethernet switches, storage controllers, wireless connectivity solutions, and custom SoC designs.
During MRVL’s latest earnings call on May 25, Marvel CEO Matt Murphy said: “AI has emerged as a key growth driver for Marvell, and we are enabling this with our leading network connectivity products and new cloud-optimized silicon platform. expects AI revenues to at least double from the previous year in fiscal 2024 and continue to grow rapidly over the next few years.”
AI applications, especially deep learning and machine learning algorithms, require significant computational power to process large datasets and perform complex calculations. Chip makers play a key role in developing specialized processors such as graphics processing units (GPUs) and application-specific integrated circuits (ASICs) optimized for AI workloads.
Marvel Technology currently holds Zacks Rank #3 (hold). The company’s valuation is also pretty steep, with a one-year forward earnings multiple of 68 times, well above the 10-year median of 32 times and just above the industry average of 60 times.
Arista Networks
Arista Networks is a leading provider of cloud networking solutions, offering high performance network switches and software for data center and cloud computing. Innovative and scalable solutions leveraging the Extensible Operating System (EOS) enable enterprises, cloud service providers and large data centers to build efficient and scalable networks. Arista Networks’ focus on software-driven networking, interoperability and open standards positions it as a trusted provider for the evolving demands of cloud computing and data-intensive applications.
ANET will be a direct beneficiary of the AI revolution. AI generates massive amounts of data that must be efficiently processed, stored, and accessed. Data centers form the backbone of your AI infrastructure, providing the compute resources and storage capacity needed to support your AI workloads. The AI revolution has increased the need for more powerful and scalable data center infrastructure to handle the influx of massive data and ensure low-latency processing.
ANET currently holds a Zacks rank of #3 (Hold), indicating a mixed earnings revision. The company now trades at 32 times expected one-year earnings, above the industry average of 23 times, but below the 10-year median of 37 times.
Image Source: Sachs Investment Research
Conclusion
Chip makers such as Marvell Technology and data infrastructure businesses such as Arista Networks will benefit greatly from the AI revolution due to the growing demand for advanced computing power, efficient data processing and robust storage capabilities. .
Additionally, as data volumes continue to grow, organizations need powerful resources to effectively explore, analyze, and extract insights from that data. In this regard, Palantir and C3.ai emerge as logical and innovative solutions.
It is impossible to predict the profound changes these new technologies will bring to the business world and society. However, it’s entirely possible that these businesses will be an important part of that change. Earnings expectations for these stocks are currently mixed and have already risen significantly, but they are certainly worth watching.
Want the latest recommendations from Zacks Investment Research? Download today the 7 best stocks for the next 30 days.Click to get this free report
Marvell Technology, Inc. (MRVL) : Free Stock Analysis Report
C3.ai Inc. (AI): Free Stock Analysis Report
Arista Networks, Inc. (ANET) : Free Stock Analysis Report
Palantir Technologies Inc. (PLTR) : Free Stock Analysis Report
Click here to read this article on Zacks.com.
Zacks Investment Research
