3 Affordable AI Stocks to Consider Buying Before They Rebound
Artificial intelligence (AI) has been increasingly reshaping the economy, and as a result, investors are on the lookout for inexpensive AI stocks. With the potential of streamlining business operations, AI and the Internet of Things (IoT) have garnered significant attention.
Year after year, data flows have been growing larger, necessitating the need for AI to handle them more efficiently. This has led to businesses and specialists being able to automate the monitoring of key processes, workflows, and logistics networks.
These benefits offer just a glimpse of what AI and IoT can bring to the table. It is highly likely that the growing consumer demand for AI products will result in an increase in the value of certain affordable AI stocks that would be advantageous to add to your investment portfolio.
One such AI stock to consider is Micron Technology (NASDAQ: MU), an industry leader known for its innovative memory and storage solutions under the Micron and Crucial brands. Micron’s diverse range of high-performance products is its key competitive advantage.
So far, MU stock has recorded a 21% year-to-date (YTD) growth. In the third quarter of 2023, Micron surpassed expectations with $3.8 billion in revenue, a non-GAAP EPS of -$1.43, operating expenses of $866 million, $11.4 billion in cash and investments, and $13.9 billion total liquidity.
The demand for memory and storage in AI servers has exceeded industry expectations, putting Micron in an excellent position for growth. Notably, Micron’s low-power DRAM innovation significantly reduces data center power consumption compared to other solutions, making it ideal for powering AI servers that typically require 6x to 8x more DRAM than standard servers.
In summary, Micron’s AI-focused products are poised to drive growth for the company’s stock.
Another affordable AI stock worth considering is Axcelis Technologies (NASDAQ: ACLS), a company that designs, manufactures, and services equipment for the semiconductor industry. Axcelis aims to help semiconductor manufacturers achieve the highest quality at the lowest possible cost.
ACLS boasts healthy financials, as evidenced by its first-quarter revenue of $254 million, surpassing analyst expectations by $14 million. The stock is undervalued, with normalized EPS at $1.43, beating analyst expectations by $0.13 and growing 16.9% year-over-year (YoY).
With the increasing popularity of AI, consumers will require faster semiconductors to fully leverage the technology. This bodes well for the semiconductor market and the services provided by leading companies like Axcelis, which will be in higher demand overall.
Of particular note, Axcelis recently announced multiple shipments of its high-current ion implant units to prominent power device chipmakers in Europe and Asia. These shipments will be used in the production of semiconductors for electric vehicles. With multiple shipments to international manufacturers, Axcelis will strengthen its presence in the global market, paving the way for further growth.
Lastly, Super Micro Computer, Inc. (NASDAQ: SMCI) is an AI stock that investors should consider. The global IT market was valued at $9.5 trillion in 2022 and is projected to grow further. AI has emerged as a powerful catalyst for growth in the IT sector, enhancing efficiency through data analysis, improving customer experiences with virtual assistants, and fortifying cybersecurity defenses with real-time threat detection.
Super Micro has demonstrated impressive financial performance, with a robust YoY revenue growth of approximately 42%. In fiscal year 2023, the company has shown strong operational performance and remarkable leadership, as reflected in its YoY return on equity (ROE) growth of 144.86%, surpassing the sector average of -3.20%.
The company’s success, along with the ongoing developments in intelligence platforms and system technology, positions it at the forefront of the market. With large enterprises and startups heavily investing in AI, Super Micro’s innovative offerings give it a competitive edge, making it a promising prospect for future development.
Investors should consider adding this undervalued AI stock to their portfolios. Its strong financials and the substantial growth opportunities presented by the expanding global IT market make it a compelling option.
In conclusion, investing in affordable AI stocks can yield significant returns as the demand for AI products continues to rise. Micron Technology, Axcelis Technologies, and Super Micro Computer, Inc. can offer investors exposure to this growing sector. With the potential for future growth, these AI stocks may bounce back, making them attractive additions to investment portfolios.
