The earnings season is in full swing. But, for a lot of investors, the earnings season only begins when tech companies start reporting. Driven by artificial intelligence (AI), tech companies have seen tremendous growth over the past few quarters and tech stocks have become hot property. This earnings season will be no different and it means you need to act fast and pick the best AI stocks before earnings.
I believe several companies will beat expectations and take the market higher. Tech stocks have helped the Nasdaq and S&P 500 hit new highs since the beginning of 2024 and the momentum could continue for the rest of the year. A recent report by Bain & Company highlighted that 87% of American companies are using generative AI in some form and companies are spending millions on it.
If you are keen to make the most of the AI hype, here are three AI stocks to buy before the companies report earnings. The stocks will soar after positive results and now is the time to make your move.
Nvidia (NVDA)
Of course, you guessed it!
No one can ever talk about AI without the mention of Nvidia (NASDAQ:NVDA) and I am all for it. The company has the leadership, the innovation and the pricing power to remain at the top of the AI race. Investors eagerly wait for Nvidia to report results and if you are keen on making the most of the stock, buy it before the earnings.
The company has steadily reported impressive numbers and has taken the market higher. Whenever it beats estimates, the stock soars and takes other AI companies higher too. As one of the best AI players in the industry, Nvidia is making the most of the imbalance between the demand and supply.
The soaring demand for AI chips has put Nvidia in a strong position and dominates the market. For the first quarter, the company reported revenue of $26 billion and the management is aiming for an income of $28 billion for the second quarter.
After meeting the top executives of the company, Goldman Sachs expects the company to announce positive earnings and share data on how its customers make money using its AI GPUs.
If you believe in AI and want to join the hype, buy Nvidia stock before it announces results next month. The recent stock split has made it easier for investors to own the stock, now trading at $123.
Palantir Technologies (PLTR)
Another hot favorite, Palantir (NYSE:PLTR) attracts a lot of investor interest. While investors should not expect the stock to jump straight away after the results, it will slowly and steadily move upwards. I expect the company to beat expectations and this will give a boost to the stock. Up 73% year-to-date, the stock is exchanging hands for nearly $29 and is one of the best AI stocks to own.
Palantir’s outstanding performance obligations and the steady growth in commercial clients are proof that the company is getting stronger each year. Once criticized for only focusing on government clients, Palantir has a diversified portfolio today. While it ensures steady revenue generation through government contracts, it continues to win new commercial clients through the Artificial Intelligence Platform (AIP).
It saw a 40% year-over-year jump in commercial revenue and a 69% rise in the customer count. Its government sector reported an 8% revenue jump while the company continued to win new contracts with the U.S. Army. Many investors think that the stock is overpriced but I think it is priced for perfection. There are several things that Palantir is getting right and betting on this stock will never disappoint you.
Earlier in April, I wrote about Palantir doubling your money and the stock was trading for $22 then. It is already up 27% since then.
The company is set to report results on August 5.
Super Micro Computer (SMCI)
Up 174% YTD, Super Micro Computer (NASDAQ:SMCI) has had an excellent 2024. The stock is exchanging hands for $786 and is one of the best AI stocks. Its partnership with Nvidia has put it in a very strong position and it benefits whenever Nvidia grows. Yes, the stock is valued at a premium but is also the best-performing stock in the first half of 2024.
The company plays a significant role in the development of server infrastructure that helps handle the GPUs that run AI programs. It offers custom solutions that bundle GPUs and has seen impressive growth this year.
It reported sales of $3.85 billion in the recent quarter with a net income of $402 million. The management raised its guidance for the year with a revenue expectation of $14.7 billion to $15.1 billion.
The stock was added to the Nasdaq 100 index yesterday, which can be seen as huge progress for the company. This will give it exposure to more investors as the mutual funds and ETFs that track the index will now be buying SMCI stock.
The company is set to report results next month and I believe SMCI is an ideal stock split candidate. If it decides to follow the footsteps of Nvidia, investors could expect a stock split.
On the date of publication, Vandita Jadeja 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.
On the date of publication, the responsible editor held a LONG position in NVDA.