Stop Sleeping on These 3 Tech Stocks With Insane AI Potential

Stocks to buy

Last Thursday, AI stocks were rocked. Market leader Nvidia (NASDAQ:NVDA) shed more than 3.5% of its value in a day. Indeed, that’s not the type of move NVDA stockholders are used to. Many new Nvidia shareholders may be biting their nails over the move. However, it’s a normal, even healthy, move after the stock’s euphoric run over the past year.

Like last time, those who brave the carnage may be the ones who’ll be able to punch their ticket to the next leg higher. Of course, the valuation is extended, and the AI boom will take a rest occasionally. However, such volatile moves are expected when you’re betting on the biggest and best high-growth companies riding the AI wave.

As the AI-focused correction continues into the final week of June, dip-buyers may have a better shot at placing their bets on firms with long-term potential in AI.

Nvidia (NVDA)

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Perhaps there’s no better AI stock to watch on the way down than the great Nvidia itself. Even if the choppy end to the trading week is the start of a correction or a more severe sell-off that brings the bears out of their caves, this won’t be NVDA stock’s first drastic decline. It won’t be its last, either.

As the AI boom looks to extend multiple years, it’s far too early to call it a “peak” in Nvidia. Of course, share prices don’t always follow the fundamentals. However, given how far ahead of the competition Nvidia is with its AI chips (Blackwell later this year, Rubin in 2026), NVDA stock remains the number-one AI company.

Further, getting into the semiconductor scene involves high startup costs. With the vast economies of scale (it has the AI talent, the data advantage, and numerous customer partnerships across various corners of tech), Nvidia seems likelier to pull further ahead in the AI race than give up any ground, even as competitors give AI their all.

AMD (AMD)

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It was odd for Advanced Micro Devices (NASDAQ:AMD) shares to surge 4.6% last Thursday when semiconductors led the way lower. Undoubtedly, AMD stock is arguably the top NVDA alternative. And while the runner-up in the AI chip race probably won’t pull ahead of Nvidia in the near future, there’s no shame in betting on a firm destined for a silver medal, especially if you have a chance to buy shares at a markedly cheaper price.

A few days ago, Piper Sandler analyst Harsh Kumar said he was “extremely impressed” with AMD’s strategy and footing in the AI chip race. Specifically, Kumar is a big fan of the PC and server businesses as we move into the second half of 2024.

I think Kumar is right to be so bullish on the stock. Though Nvidia may be leaving most of its AI rivals behind, AMD seems to be keeping a good pace. As it chases Nvidia’s tail, AMD also stands to move further ahead of other AI chip firms in this race.

Corning (GLW)

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Corning (NYSE:GLW) is best known for its Gorilla Glass product at the front of our smartphones. Many may not know that the innovative, durable glass isn’t a big needle-mover for Corning. And it’s not the reason to own the stock. Instead, the optical fiber business stands to benefit as more AI data centers go up around the globe.

Mike O’Day of Corning Optical believes that AI “changes the game for the data center market,” also noting that “five times more optical connections” are needed for AI-focused data centers. That’s a big deal investors may not fully appreciate, even after the parabolic year-to-date spike.

At 20.9 times forward price-to-earnings (P/E), GLW stock may not have the full magnitude of the AI tailwind baked in quite yet. This may be a long-term opportunity for investors as AI data centers look to boom alongside chips.

On the date of publication, Joey Frenette did not hold (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.

Joey Frenette is a seasoned investment writer specializing in technology and consumer stocks. Contributing to the Motley Fool Canada, TipRanks, and Barchart, Joey excels in spotting mispriced stocks with long-term growth potential in a fast-paced market.

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