We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
3 Stocks to Buy for Artificial Intelligence (AI) Exposure
Read MoreHide Full Article
As everybody knows by now, artificial intelligence (AI) has been Wall Street’s shiny new toy in 2023, with companies speaking on the technology in a snowballing fashion.
And it’s easy to understand why, as the technology undoubtedly has a bright future and allows us to achieve feats that otherwise felt impossible.
Interestingly enough, three companies – Palo Alto Networks (PANW - Free Report) , Arista Networks (ANET - Free Report) , and Apple (AAPL - Free Report) – all stand to be big beneficiaries of the technology.
For those interested in gaining exposure to the technology, let’s take a closer look at each.
Arista Networks
In late April, Arista Networks unveiled a new cloud-delivered, AI-driven network identity service for enterprise security and IT operations. The stock is a Zacks Rank #2 (Buy), with the revisions trend particularly notable for its current fiscal year.
Image Source: Zacks Investment Research
The company has been a consistent earnings performer, exceeding both top and bottom line expectations in 14 consecutive quarters. Just in its latest release, ANET posted a 6% EPS beat and reported revenue 3.5% above expectations.
As we can see in the chart below, the company’s revenue growth has been rapid over the last several years.
Image Source: Zacks Investment Research
Palo Alto Networks
Palo Alto Networks, a current Zacks Rank #1 (Strong Buy), operates Cortex, the company’s integrated suite of AI-driven, intelligent products for the Security Operations Center (SOC). Analysts have raised their earnings expectations across the board.
Image Source: Zacks Investment Research
The company’s growth profile is impossible to ignore, with estimates suggesting 70% earnings growth in its current fiscal year (FY23) on 25% higher revenues. And looking ahead to FY24, estimates allude to an additional 16% growth in earnings and a 21% revenue climb.
Image Source: Zacks Investment Research
Apple
Apple has seemingly become a ‘Dark Horse’ in the AI race, with many not recognizing the company’s exposure. While the tech titan hasn’t unveiled any ground-breaking technology, it’s quietly been implementing AI features, including an improved iPhone autocorrect model.
Apple shares are undoubtedly pricey, with the current 31.7X forward earnings multiple sitting well above the 24.8X five-year median. Still, investors have had no issue forking up the premium given the company’s rock-solid standing, with AAPL shares up nearly 50% in 2023.
Image Source: Zacks Investment Research
The company has long been viewed as a cash flow king, and for understandable reasons; Apple generated roughly $25.6 billion in free cash flow throughout its latest quarter. Strong cash flows allow companies to pay down debt, shell out dividends, and fuel growth.
Image Source: Zacks Investment Research
Bottom Line
With the rapid rise of interest in AI technology, it’s no surprise that several notable technology giants stand to benefit.
While the technology is still in its early phases, the long-term potential has investors ecstatic, seeing a massive opportunity to reap some gains.
And all three stocks above – Palo Alto Networks (PANW - Free Report) , Arista Networks (ANET - Free Report) , and Apple (AAPL - Free Report) – stand to be big beneficiaries of the technology.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
3 Stocks to Buy for Artificial Intelligence (AI) Exposure
As everybody knows by now, artificial intelligence (AI) has been Wall Street’s shiny new toy in 2023, with companies speaking on the technology in a snowballing fashion.
And it’s easy to understand why, as the technology undoubtedly has a bright future and allows us to achieve feats that otherwise felt impossible.
Interestingly enough, three companies – Palo Alto Networks (PANW - Free Report) , Arista Networks (ANET - Free Report) , and Apple (AAPL - Free Report) – all stand to be big beneficiaries of the technology.
For those interested in gaining exposure to the technology, let’s take a closer look at each.
Arista Networks
In late April, Arista Networks unveiled a new cloud-delivered, AI-driven network identity service for enterprise security and IT operations. The stock is a Zacks Rank #2 (Buy), with the revisions trend particularly notable for its current fiscal year.
Image Source: Zacks Investment Research
The company has been a consistent earnings performer, exceeding both top and bottom line expectations in 14 consecutive quarters. Just in its latest release, ANET posted a 6% EPS beat and reported revenue 3.5% above expectations.
As we can see in the chart below, the company’s revenue growth has been rapid over the last several years.
Image Source: Zacks Investment Research
Palo Alto Networks
Palo Alto Networks, a current Zacks Rank #1 (Strong Buy), operates Cortex, the company’s integrated suite of AI-driven, intelligent products for the Security Operations Center (SOC). Analysts have raised their earnings expectations across the board.
Image Source: Zacks Investment Research
The company’s growth profile is impossible to ignore, with estimates suggesting 70% earnings growth in its current fiscal year (FY23) on 25% higher revenues. And looking ahead to FY24, estimates allude to an additional 16% growth in earnings and a 21% revenue climb.
Image Source: Zacks Investment Research
Apple
Apple has seemingly become a ‘Dark Horse’ in the AI race, with many not recognizing the company’s exposure. While the tech titan hasn’t unveiled any ground-breaking technology, it’s quietly been implementing AI features, including an improved iPhone autocorrect model.
Apple shares are undoubtedly pricey, with the current 31.7X forward earnings multiple sitting well above the 24.8X five-year median. Still, investors have had no issue forking up the premium given the company’s rock-solid standing, with AAPL shares up nearly 50% in 2023.
Image Source: Zacks Investment Research
The company has long been viewed as a cash flow king, and for understandable reasons; Apple generated roughly $25.6 billion in free cash flow throughout its latest quarter. Strong cash flows allow companies to pay down debt, shell out dividends, and fuel growth.
Image Source: Zacks Investment Research
Bottom Line
With the rapid rise of interest in AI technology, it’s no surprise that several notable technology giants stand to benefit.
While the technology is still in its early phases, the long-term potential has investors ecstatic, seeing a massive opportunity to reap some gains.
And all three stocks above – Palo Alto Networks (PANW - Free Report) , Arista Networks (ANET - Free Report) , and Apple (AAPL - Free Report) – stand to be big beneficiaries of the technology.