June 23, 2024

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2 Artificial Intelligence (AI) Stocks to Buy and Hold for Great Long-Term Potential

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All eyes have been on the artificial intelligence (AI) market over the last year. The launch of OpenAI’s ChatGPT at the end of 2022 reinvigorated interest in the technology and forced many to rethink what they thought was currently possible with AI. Advances in the generative software could boost countless industries, from self-driving cars to e-commerce, consumer products, cloud computing, and more.

A boom in AI has been a crucial growth driver in the Nasdaq-100 Technology Sector‘s 33% rise over the last 12 months. Dozens of AI-driven tech companies have enjoyed solid gains thanks to AI. However, the market appears to be nowhere near hitting its ceiling, suggesting it’s not too late to make a long-term investment in the industry.

Chip stocks like Nvidia (NASDAQ: NVDA) and Intel (NASDAQ: INTC) are attractive options, with both companies developing the hardware that makes AI possible. These tech giants could have much to offer investors in the coming years as chip demand rises and the AI market develops.

Here are two AI stocks to buy and hold for great long-term potential.

1. Nvidia

Shares in Nvidia have soared more than 210% since last June. The company has rallied investors by achieving a leading market share in AI graphics processing units (GPUs), the chips used to run and train AI models.

As a result, Nvidia’s stock is trading at a premium, with a forward price-to-earnings (P/E) ratio of about 44. However, that figure doesn’t necessarily tell the whole story.

First, Nvidia’s forward P/E is lower than the same metric for its biggest rival, Advanced Micro Devices, which has a forward P/E of 48. The difference indicates Nvidia’s stock is trading at a better value despite delivering significantly more stock growth than AMD over the last year.

NVDA PE Ratio (Forward) Chart

NVDA PE Ratio (Forward) Chart

Additionally, even with Nvidia’s meteoric rise, the company’s stock has actually increased in value since 2021. This chart shows Nvidia’s forward P/E and price/earnings to growth (PEG) ratio have…



2024-06-11 08:05:00

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