Jamie Dimon, the CEO of JPMorgan Chase (NYSE:JPM), made headlines not long ago when he said that artificial intelligence (AI) could be as transformative as electricity or the internet. Dimon’s comments underscore the high hopes and big aspirations that Wall Street has for AI stocks. Companies large and small are racing to develop new AI applications and platforms, and to monetize their products.
At stake is an industry that could contribute more than $15 trillion to the global economy by 2030, transforming everything from journalism and medicine to the automotive and design industries. While the companies leading the AI race are well-known, there are other AI concerns that are flying under the radar, getting little attention from either the media or investors. Ignore these companies at your own peril. Here are undiscovered AI gems. Don’t sleep on these three cutting-edge AI stocks.
Lam Research Corp. (LRCX)
Lam Research Corp. (NASDAQ:LRCX) is an essential part of the global microchip and semiconductor industry and demand for its products is red hot as artificial intelligence comes to dominate the industry. Specifically, Lam Research supplies wafer-fabrication equipment to the semiconductor industry. Its products are used in front-end wafer processing, which involves the development of the active components of semiconductor devices and their wiring.
The important nature of Lam Research’s products has made the company’s stock a top performer. LRCX stock is up 29% this year, has risen 96% over the last 12 months, and has increased 367% through five years. Demand for semiconductors among companies building AI applications and platforms has led to strong earnings at Lam Research. The company reported fourth quarter 2023 earnings per share of $7.52, which beat analyst estimates of $7.07. Revenue totaled $3.76 billion versus $3.70 billion expected.
Symbotic (SYM)
Symbotic (NASDAQ:SYM) is an American robotics warehouse automation company. It creates automated warehouse systems for businesses in America and neighboring Canada. And it uses AI as a main feature in both its software and robotics. The company’s long-term stock performance is exceptional. However, the share price has pulled back recently, opening up a buy-the-dip opportunity. While SYM stock has gained 50% over the last 12 months and is up nearly 300% over five years, however it has declined 18% in 2024.
Most of the decline in SYM stock occurred in February after the company reported earnings that were inline with Wall Street estimates. Symbotic announced a profit of $14 million. It was the company’s second consecutive quarter of profitability. It also reported that its sales grew 79% year-over-year in the quarter to $368 million. However, both the financial results and forward guidance provided largely matched analysts’ expectations, sending SYM stock lower. The share price likely won’t be down for long.
Adobe (ADBE)
Software company Adobe (NASDAQ:ADBE) is on the list of AI stocks that have fallen on hard times and does not appear to be top-of-mind with investors. Year to date, ADBE stock is down 18%. The selloff occurred after privately held OpenAI launched Sora, an AI platform that can generate videos based on written descriptions and competes directly with a similar product from Adobe. During Q1, Adobe also canceled its planned $20 billion acquisition of design software start-up Figma and had to pay a $1 billion termination fee.
The ADBE stock decline doesn’t reflect the company’s adoption of AI among its software products, along with its strong earnings. In mid-March, Adobe reported financial results for its fiscal first quarter. Adobe announced EPS of $4.48 versus $4.38 that was expected on Wall Street. Revenue came in at $5.18 billion compared to $5.14 billion that was anticipated. Sales grew 11% from a year earlier. Reports say Adobe is now exploring an AI partnership with OpenAI.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.