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As the stock market continues its ascent to record highs, propelled by a perfect storm of lower interest rates, a resilient economy, robust corporate earnings, and sizzling commodity prices like gold reaching unprecedented peaks, one catalyst stands out like a beacon – artificial intelligence.
The very mention of AI on an earnings call has become akin to pouring gasoline on a fire, igniting stock prices with remarkable fervor. Companies of all sizes are in a mad dash to jump on the AI bandwagon, seeking to harness its potential for both driving efficiencies and unlocking new revenue streams. The future growth prospects in this domain are nothing short of explosive.
According to Precedence Research, the global AI market is forecasted to balloon from $454.12 billion in annual revenues in 2022 to a staggering $2.58 trillion by 2032. This meteoric rise, with a compound annual growth rate of 19%, is set to propel specific stocks to stratospheric heights over the long haul. Bearing this AI gold rush in mind, let’s delve into three stocks primed to strike it rich.
Micron Technology (MU)
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Shares of Micron Technology (NASDAQ:MU) have surged by 16% following the company’s stellar financial performance that not only surpassed Wall Street’s expectations but also signaled sustained growth driven by AI. Micron, renowned for its memory storage solutions and USB flash drives, reported earnings per share of 42 cents, significantly outperforming analysts’ estimated loss of 25 cents.
Recording revenue of $5.82 billion during Micron’s fiscal second quarter, the company exceeded revenue forecasts. However, the real kicker for MU stock has been the revelation that Micron is reaping the rewards of the ongoing AI boom, with unprecedented demand for its memory and data storage products. Micron’s memory and storage solutions power AI systems globally, including those developed by Nvidia (NASDAQ:NVDA).
Astera Labs (ALAB)
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Step into the AI arena with Astera Labs (NASDAQ:ALAB), a fresh entrant to the stock market. Specializing in semiconductor-based connectivity solutions and operating within the AI realm, Astera Labs made its market debut on March 20, and its stock price has been on a rocket ship ever since, doubling from its IPO price of $36 per share within a day.
Immersed in the AI microchip and semiconductor sphere, Astera Labs boasts prestigious clients like Nvidia and Advanced Micro Devices (NASDAQ:AMD). While currently operating at a loss, the company’s revenue trajectory is propelling upwards, with a remarkable 45% year-over-year sales surge in 2023, climbing from $79.9 million in 2022 to $115.8 million. All signs point to continued growth on the horizon for Astera.
Super Micro Computer (SMCI)
The Unstoppable Rise of Super Micro Computer
Unstoppable Momentum
With Super Micro Computer (NASDAQ: SMCI), resistance seems futile. Can anything slow down this stock on a skyrocketing trajectory? Up an impressive 241% year-to-date and a staggering 778% over the last 12 months, SMCI shares are on a relentless climb. The recent inclusion of SMCI in the prestigious S&P 500 index only adds fuel to the fire, attracting more investors to this AI-focused gem.
AI Powerhouse
Super Micro Computer, akin to Micron and Astera Labs, finds itself intertwined in the AI ecosystem. Leveraging its ties to industry giant Nvidia, the company is thriving by manufacturing data centers that drive AI models and applications. The turning point came when SMCI inked a collaboration deal with Nvidia last year, propelling Super Micro Computer’s market capitalization from a modest $4.50 billion in 2022 to a staggering $55 billion today.
On the date of publication, Joel Baglole held a long position in NVDA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
