Unraveling the Best AI-Exposed Tech Stock Among DELL, CDNS, and INTU Unraveling the Best AI-Exposed Tech Stock Among DELL, CDNS, and INTU

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The technology sector has seen a surge of unexpected winners, with companies like Dell (NYSE:DELL) making remarkable strides seemingly overnight. Beyond the well-known tech giants, the realm of AI technology is poised to drive significant growth across various stocks. The year 2024 might witness a rising tide of AI technology that elevates numerous companies navigating the volatile seas of technology. In light of this, let’s delve into a comparative analysis of three tech stocks (DELL, CDNS, and INTU) using TipRanks’ Comparison Tool to evaluate potential AI-driven growth in the coming year.

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The AI Potential of Dell Technologies (NYSE:DELL)

Dell Technologies stunned investors with outstanding quarterly results, propelling its stock price up by approximately 30% in a single day. The surge was fueled by high demand for AI servers, underlining Dell’s ability to surpass earnings expectations. Coupled with a 20% dividend increase and optimistic (AI-centric) guidance for Fiscal Year 2025, many investors are just beginning to recognize the untapped potential of AI within the company.

Despite Dell’s stock price more than tripling over the past year, exhibiting a 210% increase, valuation metrics like the 25.0 times trailing P/E and 15.6 times forward P/E still present an attractive proposition, especially in light of the robust AI tailwinds. Dell’s AI-capable Precision workstations, including the 3000 and 5000 series, position the company favorably to capitalize on emerging AI trends such as edge AI, AI PCs, and neural processing units (NPUs) in 2024.

Exploring Dell’s Price Target

Analysts deem Dell stock a Strong Buy, with 11 Buy ratings, one Hold rating, and one Sell rating in the past three months. The average price target of $115.77 suggests a potential upside of 5.3%.

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The AI Dominance of Cadence Design Systems (NASDAQ:CDNS)

Cadence Design Systems emerges as a high-value investment in the AI space, with its stock trading at a premium of 81.5 times the trailing P/E ratio. Despite the steep price-to-sales ratio of 20.4 times, significantly above the industry average, Cadence’s pioneering work in intelligence system design, notably the Millenium M1 AI supercomputer system, justifies the lofty valuation.

Following a brief downturn, Morgan Stanley (NYSE:MS) endorsed Cadence’s long-term strategy, foreseeing continued momentum in chip design well into the following year. The bank raised CDNS stock’s price target to $350, highlighting a bullish outlook for the company’s future prospects.

Deciphering Cadence’s Price Target

With eight Buy ratings and two Hold ratings in the last three months, CDNS stock is labeled a Strong Buy. The average price target of $321.70 indicates an anticipated upside of 5.1%.

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The AI Growth Trajectory of Intuit Inc

Intuit Inc has witnessed a remarkable ascent, with its stock climbing over 83% since late 2022. As the tax season unfolds, the company’s focus on small business and self-employed sectors, coupled with AI advancements, positions it as a standout performer in the AI-fueled innovation landscape.

Intuit’s recent quarterly performance showcased an 11.3% year-over-year revenue increase to $3.39 billion, predominantly driven by QuickBooks. Looking ahead, innovations like Intuit Assist, serving as an AI companion to the company’s software suite, are poised to drive further growth. Leveraging its generative AI operating system (GenOS), Intuit is transforming into an “AI-driven expert platform,” expanding its economic moat and valuation potential.

Decoding Intuit’s Price Target

Backed by 20 Buy ratings and two Hold ratings in the past three months, INTU stock is marked as a Strong Buy. The average price target of $705.62 forecasts a potential upside of 7.7%.

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Final Thoughts

In the unfolding landscape of 2024, it is evident that numerous tech companies beyond the mega-cap stalwarts are well-positioned to capitalize on the AI revolution. Among the trio analyzed, Dell emerges as a promising player with its modest valuation and strong foothold in AI PCs. However, analysts project the highest upside potential from INTU stock, reflecting the market’s keen interest in Intuit’s AI-driven growth trajectory.

Disclosure

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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