Artificial intelligence (AI) has gained massive popularity over the past year. There is huge interest in AI stocks and every investor is looking for an opportunity to double their money. Nvidia (NASDAQ:NVDA) is a leader in the space and has already made investors rich but many under-the-radar AI stocks can outshine Nvidia.
The global AI market is expected to grow at a 15.83% compound annual growth rate by 2030 and reach a market volume of $738.80 billion. This means investors have a massive opportunity to benefit from the rising adoption of AI. Nvidia is an expensive stock today, but if you are looking for reasonably priced under-the-radar AI stocks, here are the emerging leaders who could become hot property in the coming months.
Palantir (PLTR)
At one time, Palantir (NYSE:PLTR) wasn’t an investor favorite due to its secrecy. However, the company has gained massive popularity with its AI prowess and artificial intelligence platform (AIP), which is a big hit among companies.
It held boot camps to enable firms to understand how AIP works and there is a massive backlog of boot camps, showing the growing popularity of Palantir’s AI product. Up 190% in the year and 48% year-to-date, PLTR stock is trading at $24 and looks undervalued to me.
The U.S. army has chosen Palantir to build a next-generation targeting system with a $178 million deal. It already has a strong presence in the defense industry, and Palantir’s solid history of exceptional performance makes it an obvious choice for government contracts. However, it has also grown the commercial business by 32% year-over-year in the fourth quarter.
The AI industry is growing, and Palantir could be the next Nvidia. Analysts love the stock and have a positive rating. Wedbush analyst Dan Ives has a price target of $35 and calls it the “Lionel Messi of AI.” Further, Brian Stutland, a portfolio manager with Equity Armor Investments, considers Palantir a promising AI investment with a price target of $37, a 57% rise from the current level.
Advanced Micro Devices (AMD)
Investors have constantly compared Nvidia and Advanced Micro Devices (NASDAQ:AMD). Nvidia has moved ahead in the race, but AMD isn’t the one to sit back and watch. The stock has been on a tear since 2023 but is still up 29% YTD and 87% in the year.
Trading at $179, the stock is a solid buy before it starts to soar higher. While you might not see a rally or explosive gains, it will steadily progress. Investors have begun to give up on the stock, but it is too soon. AMD has the potential to bounce back.
The company has launched MI300X, which it believes is the world’s fastest AI hardware, and some of the biggest organizations in the world use its GPUs. Its fourth-quarter results were proof that the company is gaining strength. It saw a 10% YOY rise in sales and a 62% surge in personal computer sales in the quarter.
Several companies in the industry are looking for low-cost alternatives, and this is where AMD chips can win over Nvidia. The PC market is anticipated to improve in the coming months as the demand for AI-enabled PCs will rise. This could work as a catalyst for AMD stock.
KeyBanc analyst has an overweight rating for the stock with a price target of $270, while Melius Research analyst has a price target of $265 with a buy rating.
ServiceNow (NOW)
ServiceNow (NYSE:NOW) stock is unstoppable, soaring 71% in the year and 11% YTD. Trading at $767, the stock isn’t cheap, but it is on its way to becoming the next Nvidia. The company offers solutions to organizations to handle their workforce and customer experience.
It uses AI and workflow management tools that help identify bottlenecks that are impacting the completion of tasks. The company has already signed a partnership with Nvidia to develop AI solutions.
ServiceNow will adopt the latest AI systems of Nvidia to enhance its platform, and Nvidia will expand the services offered by ServiceNow. This means the company will continue to benefit as long as Nvidia keeps growing.
Fundamentally, the company has impressed investors and reported an EPS of $3.11 in the fourth quarter. It beat analyst expectations with a revenue of $2.4 million, up 26% YOY. One of the most important metrics, the subscription revenue, was up 27% in the quarter to hit $2.3 billion, and it closed 168 deals worth $1 million or more in the quarter. This is higher than the 103 deals closed by Palantir.
ServiceNow is trading at a premium, but I believe the first-quarter results will be impressive and could drive the stock higher. There is no stopping the stock’s rally.
On the date of publication, Vandita Jadeja did not hold (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.