The move to artificial intelligence has been one of the greatest wealth-creating secular themes of the current generation. For the most part, the main beneficiary has been the likes of NVIDIA Corporation (NASDAQ: NVDA) and the A.I. engines like OpenAI’s ChatGPT. It is also well-known that Microsoft was the key investor in OpenAI and the software and cloud services giant will own most of OpenAI’s profits for years into the future.
While AI is a secular theme, there may be a strategic backdoor entrance into the A.I. theme that is not on as many investor radars today. That means the companies may have a potential AI boost that may not be fully recognized into their stocks.
Joel Fishbein, an analyst for Truist Securities, laid out “other AI plays” that the market may not be paying as much attention to in their application and infrastructure layers. While Microsoft is touted with a Buy rating, the view that it will maintain its leadership in enterprise AI is not a huge leap from the investing community due to its pact with OpenAI.
Oggonomics would remind its readers up front that no analyst report should ever be the sole source for investors making a decision to buy, sell or hold any stocks.
The three stocks that are touted in different industries are not always the go-to names touted in the A.I. investing community with the mega-caps.
Snowflake Inc. (NYSE: SNOW) has already been a cloud-based data platform for customers to gain insight and to solve business problems. While it is an A.I. play at the core, Snowflake has lost half of its value from its 52-week high. And to make matters worse, the $112 price today is down from its 2021 post-IPO highs of $350. Truist’s pitch for Snowflake — data warehouses are a critical component in making the AI efforts useful for its enterprise clients.
MongoDB, Inc. (NASDAQ: MDB) is another database service provider that has more storage and search capabilities starting to gain more traction with customers. A Truist survey even noted that MongoDB was the most frequently mentioned vendor outside of the mega-cap stocks for its tools used in AI applications. MongoDB shares took off after earnings in August, but despite being back up at $290 the stock is still down over 40% from its $500+ highs beck in February. It has only been about two weeks since Truist raised MongoDB’s price target to $320 from $300.
Palo Alto Networks, Inc. (NASDAQ: PANW) is generally considered the king of cybersecurity stocks with a $112 billion market cap. On top of its cybersecurity platform, Truist noted that it has recently launched AI cybersecurity tools and products that should help customers and generate more in revenues per customer. At $345.00 at this time, Palo Alto is only down about 10% from its all-time highs. It was just in August that Truist raised Palo Alto’s price target to $400 from $350.
All of these Buy recommendations are directly from Truist Securities and the views, targets and opinions are not being confirmed nor refuted by Oggonomics. The Truist report does not come with any guarantee nor does it imply any guarantee that the A.I. theme will make these other stocks rise from here. These and other stocks could even fall. Any decision to buy, sell, hold (or even short sell) is the sole responsibility of each investor and should be made with the aid of a financial advisor.
