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The tech-heavy Nasdaq index was one of the best-performing exchanges in 2023. Just six weeks into 2024, it may be headed for a repeat performance. The index is up approximately 7% and the story is the same for the top tech stocks. That means a focus on artificial intelligence (AI).
In 2023, companies made a point of telling investors about their AI capabilities. In 2024, investors are being more discerning about AI. Specifically, they want to know how companies are going to use AI to increase profits.
That narrows the list a little bit. However, as the early returns show, there are still several companies to choose from. Here are three of the top tech stocks that have posted strong returns in the last 12 months. Despite this, each has a believable AI story that is likely to propel their stocks higher in 2024.
Palantir Technologies (PLTR)
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Palantir (NYSE:PLTR) posted solid earnings in early February. The results included a 20% year-over-year (YOY) revenue increase and the fourth consecutive profitable quarter. And that growth isn’t expected to slow down anytime soon.
PLTR stock is up 40% in 2024 and 160% in the last 12 months, demonstrating significant growth that has caught investors’ attention. It’s important to note that from a technical standpoint, a long-term outlook based on fundamentals could align with the trajectory of success for this company. However, after each of its last two earnings reports, PLTR stock has experienced a pullback of around 15-20%. This pattern warrants consideration, but shouldn’t overly concern long-term investors.
Palantir continues to silence its critics by attracting over 20 major partners, including companies such as AWS and Google Cloud. The company managed to increase its commercial revenue by 70% YOY and is guiding for 40% growth in its commercial sector this year. This performance is propelled by unprecedented demand for its artificial intelligence platform, which becomes increasingly critical in justifying the company’s valuation.
Advanced Micro Devices (AMD)
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Nvidia (NASDAQ:NVDA) is a popular choice for top tech stocks, but Advanced Micro Devices (NASDAQ:AMD) may be a more promising option for 2024. The reason comes down to supply and demand; Nvidia faces challenges meeting the insatiable demand for its AI chips. In contrast, AMD released its own MI100 AI chips and projected $2 billion in sales for the year.
AMD’s CEO Lisa Siu increased the sales forecast to $3.5 billion, and analysts believe this projection may be conservative. While AMD stock is approaching the top of its current consensus price target, analysts have been revising their price targets upwards since the earnings report. The company’s success in capturing market share, fueled by increasing demand, suggests the stock could reach a $200 price target by the end of the year.
CrowdStrike (CRWD)
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Cybersecurity is an essential aspect of the top tech stocks list, showcasing both sides of the AI coin. Artificial intelligence creates more opportunities for bad actors to breach protected information, but companies like CrowdStrike (NASDAQ:CRWD) use AI as part of their cybersecurity platform for additional protection.
While revenue and earnings are growing strongly YOY, with around $3 billion of the revenue being of the recurring variety, the stock has already surged by 180% in the last 12 months and 30% thus far in 2024. Investors may question whether this growth is already priced in. Nevertheless, analysts are increasing their price targets for CRWD ahead of the earnings report on March 5, 2024.
The views expressed herein are solely those of the author and do not necessarily reflect those of Nasdaq, Inc.
