The Artificial Intelligence Frenzy: Are AI Stocks Still Attractive?
The rapid growth of artificial intelligence technology has propelled certain stocks to new heights, with companies like Nvidia and Meta Platforms seeing significant gains in the market. On the other hand, tech giants like Tesla and Apple have faced some challenges, signaling a shift in the industry.
According to JPMorgan analyst Samik Chatterjee, stocks tied to the AI frenzy may be trading at a premium compared to historical averages. However, Chatterjee believes that these stocks are still attractive investments, particularly those outside of the chip space.
In a recent note, Chatterjee shared his top AI stock picks, including PC and server manufacturer Dell. Despite trading at a lower multiple relative to the AI Group, Dell has seen strong performance this year, with a 31% surge in shares after beating earnings estimates in its latest quarter.
Another top AI pick from Chatterjee is Arista Networks, which has a significant revenue exposure to the cloud trend. The company’s AI bull case is tied to Ethernet adoption in back-end networks, making it an attractive option for investors.
Overall, while AI stocks may be trading at a premium compared to non-AI stocks, there are still opportunities for growth in this sector. As Goldman Sachs analyst Michael Ng expressed confidence in Arista Networks’ ability to outperform earnings predictions, it’s clear that the AI frenzy is far from over.
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