Top-Rated AI Stocks on Wall Street: Supermicro and Axcelis Technologies Present Lucrative Opportunities, Nvidia Stuns with Remarkable Growth
Artificial intelligence (AI) stocks have been dominating the market, and many investors are realizing the potential of this technology. As stocks in the AI sector experience significant rallies, it’s natural to wonder if they are due for corrections. However, there are still some AI stocks that continue to perform well and offer lucrative opportunities for investors.
Wall Street analysts are often relied upon by investors to gauge the potential of a stock. These analysts study stocks for a living and have a better grasp on what to look for. For those looking to gain exposure to top-rated AI stocks, there are a few Wall Street favorites worth considering.
Supermicro, a surging AI stock, has received praise from many analysts. This software and service provider has an average price target of $361.33, implying an almost 7% upside. The median price target is $400, while the high is $500.
Supermicro’s data center servers are capable of processing the high intensity of artificial intelligence. Its partnership with Nvidia bodes well for the company, as it can fuel more revenue and earnings growth. In fact, Supermicro has outperformed Nvidia and most of its competition over the past year, with shares surging by over 300% and an astonishing 2,164% over the past five years. Currently, shares trade at a P/E ratio of 31.
Supermicro’s fiscal 2024 started with a 14.4% year-over-year revenue growth in the first quarter. The company has raised its fiscal 2024 outlook, now expecting $11 billion in revenue. Despite ongoing GPU supply constraints, Supermicro has not stopped growing, and once this headwind fades away, hypergrowth may resume.
Axcelis Technologies is another undervalued AI stock worth considering. The company offers ion implantation technology, assisting chipmakers in making more efficient chips. Its Purion systems have experienced robust demand, with an order backlog that exceeds its revenue for all of 2022. Despite a recent decline in its stock price, which doesn’t seem warranted, shares now trade at a P/E ratio of 16, making it quite a bargain.
Axcelis Technologies has an average price target of $183 among five analysts, suggesting a 60% upside from the current price. The highest price target is $215, while the lowest is $134. Even the lowest price target still indicates the stock can rally by 17.5% from its current level.
Nvidia, a well-known player in the AI space, continues to attract fans with its remarkable growth. The stock has seen a 209% gain over the past year and an incredible 5-year gain of 1,295%. Concerns about its valuation have been silenced by its stellar revenue and earnings growth. In fact, Nvidia achieved growth rates for multiple quarters that are rarely seen, even for a company of its size.
With a 28-forward P/E ratio and a 0.55 PEG ratio, Nvidia’s financial strength is undeniable. Analysts also seem to agree, with an average price target of $662, suggesting a 21% upside from the current price. Out of 35 analysts, 32 have rated NVDA as a Buy and four as a Hold.
In conclusion, these top-rated AI stocks offer great opportunities for investors who want exposure to the AI sector. Supermicro and Axcelis Technologies present strong growth potential and reasonable valuations. Nvidia, with its remarkable financial performance, continues to attract investors. However, as with any investment, it is important to conduct thorough research and consider the risks involved.
