What You Need to Know
• NVIDIA (NVDA), Vertiv (VRT), and Palantir (PLTR) have seen a pullback despite strong earnings.
• AI demand remains robust, with NVIDIA’s Data Center revenue hitting record highs.
• Palantir’s customer count surged 43%, reflecting growing demand for AI-driven analytics.
• Vertiv raised its full-year sales outlook, signaling continued strength in AI infrastructure.
• Other AI plays like Advanced Micro Devices (AMD), Super Micro Computer (SMCI), and Arista Networks (ANET) also offer AI exposure.
AI Stocks: A Temporary Pause or a Long-Term Opportunity?
The AI trade has hit a roadblock over the past month, with high-flying names like NVIDIA (NVDA), Vertiv (VRT), and Palantir (PLTR) experiencing selling pressure. However, the fundamentals behind AI remain as strong as ever, with demand for computing power, AI-driven analytics, and cloud-based infrastructure showing no signs of slowing down.
NVIDIA (NVDA): AI Dominance Remains Unchallenged
NVIDIA continues to lead the AI revolution, fueled by its Data Center division, which delivered a record $35.6 billion in revenue, up more than 90% YoY. The company crushed expectations by $2 billion, showing that demand for its AI chips remains red-hot.
Despite recent stock weakness, NVDA remains attractively valued, with a 1.0X PEG ratio well below historical levels. Analysts remain bullish on its explosive EPS growth, keeping the stock at a Zacks Rank #2 (Buy).
Palantir (PLTR): AI Analytics Driving Growth
Palantir’s AI-powered data analytics solutions continue to attract customers, with sales up 36% YoY and customer count soaring 43%. The company secured a record $803 million in U.S. commercial contracts, up 130% YoY, signaling growing corporate adoption of AI.
While valuation remains on the high side with a 4.7X PEG ratio, the recent dip has made PLTR more attractive than just a month ago. With earnings expected to surge 31% this year, the company remains a top AI play.
Vertiv (VRT): Powering AI Infrastructure
Vertiv, a leader in AI data center infrastructure, exceeded earnings and revenue expectations last quarter, with sales up 26%. The company also raised its full-year 2025 sales forecast, projecting 16% growth YoY, highlighting strong AI-related demand.
Like NVDA, Vertiv remains undervalued, with a 0.8X PEG ratio, making it an appealing AI stock for value-focused investors.
Other AI Stocks to Watch
Advanced Micro Devices (AMD): AI Chip Challenger
While NVIDIA dominates AI chips, AMD (AMD) is emerging as a strong competitor. Its MI300 AI accelerator chips have gained traction, and analysts expect AI-driven revenue growth to accelerate in 2024 and beyond. With a cheaper valuation compared to NVDA, AMD presents an attractive alternative for AI exposure.
Super Micro Computer (SMCI): AI Server Demand Explodes
Super Micro Computer (SMCI) has been one of the best-performing AI stocks, riding the explosive demand for AI-optimized servers. With revenue growth of more than 100% YoY, the company remains a critical supplier in the AI ecosystem.
Arista Networks (ANET): AI-Driven Networking Growth
As AI workloads skyrocket, Arista Networks (ANET) is benefiting from the need for high-speed data center networking. With strong earnings and increasing AI-related sales, Arista remains a compelling AI infrastructure play.
The Oracle Says:
“The Oracle says the AI trade’s recent dip could be a golden buying opportunity. NVIDIA (NVDA), Palantir (PLTR), and Vertiv (VRT) remain strong AI bets, while AMD (AMD), Super Micro (SMCI), and Arista Networks (ANET) offer additional AI exposure. Long-term investors should stay focused on AI’s transformational potential.”
