Over the next decade, AI will transform the world as we know it. Similar to the birth of the internet in the early 1980’s, many investors were skeptical of it and its true potential. However, as demand skyrocketed it was clear its potential was limitless.
The phenomena seems very similar to now where many investors, including Wall Street analysts, undervalue the impact that it would have on the global economy. Additionally, AI’s impact could be orders of magnitude greater than any technological innovation in human history. As the companies continue to build the infrastructure, applications, and technology to accelerate its growth early will have an opportunity to become extremely wealthy.
Now, here are the top 3 underrated AI stocks set for an unprecedented rebound in 2024!
Meta Platforms (META)
Meta Platforms (NASDAQ:META) has solidified its positioning in the AI race in 2024. After the company’s €˜’year of efficiency” in 2023, Meta’s strategic investments in AI and the metaverse are paying off in great fashion.
Meta has become a major player in artificial intelligence in 2024 and will continue to make its competition shake in its boots. Over the last year, the company overcame significant financial hurdles and has hit the ground running. CEO Mark Zuckerberg made crucial decisions, which involved cutting costs to strengthen its liquidity. Moreover, the company saw record revenue and free cash flow in the 2023 fiscal year. After a strong start to the year, Meta’s financial performance in the second quarter remained strong.
Revenue increased 22% year over year to $39.07 billion, with net earnings up 73% to $13.46 billion. Additionally, family daily active people rose 7%, including a 10% bump in its average price per ad. Meta’s continued strong growth and stellar financial performance make it one of the top underrated AI stocks to buy now.
Dell Technologies (DELL)
Dell Technologies (NYSE:DELL) is the runner up on the list that investors should keep a close eye on in 2024. The stock’s more than 30% drawdown in July presents a unique opportunity that long-term investors simply cannot miss.
Dell Technologies is not as exciting as many of the other AI companies that have been in the headlines this year. However, the company’s infrastructure is the backbone of powering modern AI solutions, especially in hyperscale data center and cloud environments. Dell’s AI-powered infrastructure includes servers, storage solutions, and networking products. The products power the most demanding AI workloads, which is important when working with extremely large datasets.
Demand for these products os at an all-time high, as AI continues to drive new growth opportunities. In Q1 FY25, revenue increased 6% year over year to $22.2 billion. In addition, net earnings swelled 65% year over year to $960 million, with servers and networking revenue hitting a record $5.5 billion. With AI adoption in the PC, data center, and cloud environments accelerating, Dell remains one of the top underrated AI stocks to buy in August.
Super Micro Computer (SMCI)
Super Micro Computer (NASDAQ:SMCI) is the final company on the list amongst the best underrated AI stocks to buy. The company’s huge plunge in July is overdone, and the company is set to rebound in the back half of the year.
Super Micro Computer is a hidden gem in the AI server market that is just getting started. In the month of July, the stock plunged in excess of 40% after the AI stock rout and a miss on its EPS estimates in the fourth quarter. However, underneath the surface, its full-year financial results and strategic investments in manufacturing capacity expansions tell a different story. The 2024 fiscal year included record revenue, earnings, and an inclusion in the prestigious S&P 500 Index.
Revenue skyrocketed 110% year over year to $14.94 billion, with net earnings swelling 89% to $1.2 billion. Moreover, the company accelerated its manufacturing capacity expansion in Malaysia and at its headquarters in Silicon Valley. While Dell still leads all original equipment manufacturers in server revenue, Super Micro’s AI-powered servers are catching up at great speeds.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
On the date of publication, Terel Miles did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Terel Miles is a contributing writer at InvestorPlace.com, with more than seven years of experience investing in the financial markets.