Many artificial intelligence (AI) stocks have risen significantly over the past year as investors sought to bet on innovative new technologies. Generative AI remains as profound a technology today as it was in the early days of the AI-driven stock rally. Still, AI is one technology that will improve exponentially over time. And technology is advancing even as the stock prices of top innovators are flattening or starting to decline.
It didn’t take long for us all to get excited about his ChatGPT 4. Today, many of us take large-scale language models (LLMs) for granted. It’s still a powerful technology, but the honeymoon seems to be long gone.
Many of us are ready to use GPT-5 or OpenAI’s text-to-video generator Sora. There are also other LLM products on the market, some of which may outperform GPT-4 on certain criteria. If AI stocks lose momentum and the ChatGPT hype continues to die down, you’ll have a second chance to own shares in an undervalued AI stock that could go up significantly in the long run.
NVIDIA (NVDA)
NVIDIA (NASDAQ:NVDA) shares have been performing strongly in recent months as investors ponder whether the company can deliver even bigger earnings. No doubt, it will be hard to top the last quarter, as the GPU giant reports earnings at the market close on May 22, 2024.
Nevertheless, the demand for top-tier AI hardware remains unabated. However, as an NVDA shareholder, They can’t help but feel nervous in the weeks leading up to the earnings report. With a forward price-to-earnings ratio of just 37.45, They still think NVDA stock is a pretty good deal, despite the high expectations.
Get a world-class AI chip manufacturer at an unbeatable price. They believe NVDA shareholders have good reason to participate in anticipation of an unexpected and catastrophic downturn in chip demand. The Blackwell B200 GPU could move the stock price in the near future, and Nvidia could come with a new chip to rival Blackwell at a later date.
Salesforce (CRM)
Salesforce (NYSE:CRM) doesn’t get enough credit for its AI innovation. Investors have a fairly solid entry point at just under $280 per share, as the stock is still in a “hangover” after its acquisition talks with Informatica (NYSE:INFA) faltered two weeks ago. This represents a drop of approximately 12% from the stock price. Peak in March. The large negative reaction to CRM stock may have caused an early end to trading expectations. Either way, Salesforce has a pretty good position at the AI show and could be the envy of its competitors in the industry.
Future customer relationship management will rely heavily on advanced AI co-pilots. Salesforce has a significant AI advantage in its niche and could rise to the top if it expands its competitive advantage and captures more market share than its competitors. Additionally, the more Salesforce injects AI into its current services, the more value it creates for customers and the more they are willing to pay.
With a P/E ratio of 28.5, Salesforce stands out as an undervalued AI stock that could more than keep up with the multi-trillion dollar tech star’s AI capabilities.
IBM (IBM)
IBM (NYSE:IBM) shares hit new highs in the sunshine of AI, contributing to a new high in more than a decade. The company has been in decline recently, with investors rejecting the company even given its AI prospects, following plummeting sales and news of its $6.4 billion acquisition of HashiCorp.
Meanwhile, the stock is down just over 11% since March, its recent high, and looks like it could be an even better bargain.
Watsonx’s generative AI is great, but the technology may still be years away from accelerating growth. There’s no question that IBM has taken steps to get back on a growth track after years of lackluster stock price performance. AI will play a big role in its revival.
IBM may be behind the times compared to some of its AI-savvy competitors, but it still stands out as a company that could be a long-term winner as the technology rises. With a P/E ratio of 16.5, IBM stock stands out as an option for value investors looking to tap into the fast-growing AI space.