The surge in AI stocks gained momentum with the introduction of ChatGPT, intensifying the competition among companies to integrate AI into their products and platforms. Morningstar has identified three undervalued artificial intelligence (AI) stocks with substantial potential in the medium- to long-term.
Snowflake (NYSE: SNOW) is positioned for significant growth in the coming years and has the potential to become a data leader. The company has demonstrated impressive revenue growth of 40.87% over the past year, showcasing its scalability and profitability. With a healthy balance sheet and an optimistic outlook for sales growth, Snowflake is well-positioned for future expansion and innovation. The company’s partnership with Microsoft has also had a positive impact on its business.
Cognizant Technology Solutions (NASDAQ: CTSH) is another undervalued AI stock with potential. While the entire sector benefits from AI trends, Cognizant stands out due to its discounted valuation, resulting from past mistakes in developing cloud solutions. The company’s upcoming quarterly results will shed more light on its performance, but with a strong revenue range and adjusted earnings per share, Cognizant remains an attractive choice for investors.
Salesforce (NYSE: CRM) has experienced significant growth thanks to its strategic focus on AI and cloud data services. The company’s data cloud, which includes Mulesoft and Tableau, has shown impressive growth, indicating high demand for its integrated services. With a new focus on margin expansion and continued innovation in AI, Salesforce presents a long-term opportunity in the software industry. Analysts predict a five-year annual growth rate of 12% for total revenue through fiscal 2028.
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As the AI sector continues to thrive, these overlooked AI stocks offer investors the opportunity to capitalize on their promising growth potential. With strong financials, innovative technologies, and positive market outlooks, Snowflake, Cognizant, and Salesforce are positioned to drive value for investors in the years to come.
Note: The article body has been generated using AI language model.
