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Welcome to Episode #372 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
This week, Tracey is joined by Zacks Senior Stock Strategist, Kevin Cook, who is the Editor of Zacks TAZR and Healthcare Innovators newsletter and portfolio, to discuss what is going on with the AI revolution, NVIDIA and the derivative companies also getting a boost.
The growth in NVIDIA’s revenue and earnings due to the surge in data center business has been remarkable. But it’s not the only one seeing a catalyst from the AI data center boom. Some other companies are also expected to have double, and triple, digit earnings growth this year thanks to the heating up of the data center business.
Who can’t stop talking about NVIDIA? This Zacks #1 Rank (Strong Buy) has posted 2 amazing quarterly results in a row.
NVIDIA is expected to grow fiscal 2024 revenue by 96.7% to $53.07 billion from $26.97 billion last year. Earnings are soaring. Earnings are expected to jump 213.2% year-over-year as well.
With numbers like these, should every investor own NVIDIA no matter what the price?
Cadence Design Systems is a software company that offers semiconductor and system companies integrated end-to-end solutions.
Revenue and earnings are both expected to be up double digits in 2023. Cadence Design Systems earnings are forecast to rise 19.2% year-over-year while revenue jumps 14.5% to $4.08 billion from $3.56 billion.
Cadence Design Systems is up 53% year-to-date.
Should Cadence Design Systems still be on your short list?
Vertiv is involved in the challenges facing data centers, communication networks and commercial and industrial facilities. It has customers in 130+ countries.
Vertiv’s revenue is expected to jump 20.1% in 2023 to $6.8 billion from $5.7 billion last year. Earnings are expected to skyrocket 200% to $1.59 from $0.53 last year.
Shares of Vertiv have been on a tear all year, up 181% year-to-date but it still has an attractive valuation at 24x.
Sterling Infrastructure operates in three segments specializing in E-Infrastructure, Transportation and Building Solutions. E-Infrastructure Solutions provides large-scale site development services for data centers, manufacturing, energy and more.
On Aug 7, 2023, Sterling reported a record second quarter and raised full year 2023 guidance. Earnings are expected to rise 29.4% in 2023 to $4.09 from $3.16 last year.
Shares of Sterling are up 144% year-to-date but remain attractively valued with a forward P/E of 19.7.
Is Sterling Infrastructure a top investment idea in data centers?
Modine operates in thermal management. What area is represented? Data centers. On Aug 2, 2023, Modine reported fiscal first quarter results and saw another record quarter and raised full year fiscal 2024 guidance.
Modine said orders in data centers were materializing sooner than expected.
Earnings are now expected to jump 39.5% in fiscal 2024 to $2.72 from $1.95 last year. Modine is trading at just 17x and is a Zacks Rank #1 (Strong Buy).
Is Modine a stealth way to play the AI revolution?
What Else Should You Know About NVIDIA and the AI Revolution?
Listen, or watch, this week’s podcast to find out.
[In full disclosure, the Zacks Value Investor portfolio owns VRT, STRL and MOD while the TAZR portfolio owns NVDA and CDNS.]
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How to Invest in NVIDIA's AI Revolution
Welcome to Episode #372 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
This week, Tracey is joined by Zacks Senior Stock Strategist, Kevin Cook, who is the Editor of Zacks TAZR and Healthcare Innovators newsletter and portfolio, to discuss what is going on with the AI revolution, NVIDIA and the derivative companies also getting a boost.
The growth in NVIDIA’s revenue and earnings due to the surge in data center business has been remarkable. But it’s not the only one seeing a catalyst from the AI data center boom. Some other companies are also expected to have double, and triple, digit earnings growth this year thanks to the heating up of the data center business.
And, no, they aren’t all making the chips.
5 Stocks to Play the AI Revolution
1. NVIDIA Corp. (NVDA - Free Report)
Who can’t stop talking about NVIDIA? This Zacks #1 Rank (Strong Buy) has posted 2 amazing quarterly results in a row.
NVIDIA is expected to grow fiscal 2024 revenue by 96.7% to $53.07 billion from $26.97 billion last year. Earnings are soaring. Earnings are expected to jump 213.2% year-over-year as well.
With numbers like these, should every investor own NVIDIA no matter what the price?
2. Cadence Design Systems (CDNS - Free Report)
Cadence Design Systems is a software company that offers semiconductor and system companies integrated end-to-end solutions.
Revenue and earnings are both expected to be up double digits in 2023. Cadence Design Systems earnings are forecast to rise 19.2% year-over-year while revenue jumps 14.5% to $4.08 billion from $3.56 billion.
Cadence Design Systems is up 53% year-to-date.
Should Cadence Design Systems still be on your short list?
3. Vertiv Holdings Co. (VRT - Free Report)
Vertiv is involved in the challenges facing data centers, communication networks and commercial and industrial facilities. It has customers in 130+ countries.
Vertiv’s revenue is expected to jump 20.1% in 2023 to $6.8 billion from $5.7 billion last year. Earnings are expected to skyrocket 200% to $1.59 from $0.53 last year.
Shares of Vertiv have been on a tear all year, up 181% year-to-date but it still has an attractive valuation at 24x.
Should Vertiv be on your watch list?
4. Sterling Infrastructure (STRL - Free Report)
Sterling Infrastructure operates in three segments specializing in E-Infrastructure, Transportation and Building Solutions. E-Infrastructure Solutions provides large-scale site development services for data centers, manufacturing, energy and more.
On Aug 7, 2023, Sterling reported a record second quarter and raised full year 2023 guidance. Earnings are expected to rise 29.4% in 2023 to $4.09 from $3.16 last year.
Shares of Sterling are up 144% year-to-date but remain attractively valued with a forward P/E of 19.7.
Is Sterling Infrastructure a top investment idea in data centers?
5. Modine Manufacturing (MOD - Free Report)
Modine operates in thermal management. What area is represented? Data centers. On Aug 2, 2023, Modine reported fiscal first quarter results and saw another record quarter and raised full year fiscal 2024 guidance.
Modine said orders in data centers were materializing sooner than expected.
Earnings are now expected to jump 39.5% in fiscal 2024 to $2.72 from $1.95 last year. Modine is trading at just 17x and is a Zacks Rank #1 (Strong Buy).
Is Modine a stealth way to play the AI revolution?
What Else Should You Know About NVIDIA and the AI Revolution?
Listen, or watch, this week’s podcast to find out.
[In full disclosure, the Zacks Value Investor portfolio owns VRT, STRL and MOD while the TAZR portfolio owns NVDA and CDNS.]