Some artificial intelligence stocks have inked big deals with OpenAI, and their values have skyrocketed.
However, some AI beneficiaries had lackluster second-quarter earnings seasons and pulled back to below-market valuations.
Believe it or not, these AI beneficiaries trade cheaper than the market. Don’t be afraid to buy.
10 stocks we like better than Super Micro Computer ›
Many artificial intelligence (AI) stocks have taken off this year, rebounding strongly from early-year weakness. Still, there has been differentiation among AI beneficiaries. For instance, companies that have inked deals with current leader OpenAI, such as Oracle (NYSE: ORCL) and Broadcom (NASDAQ: AVGO), have soared. Meanwhile, those perceived to be on the outside of OpenAI and its immediate suppliers have lagged.
Yet, while investors have bid up recent outperformers to stratospheric valuations, we’re really just in the second inning of the artificial intelligence revolution. That means certain stocks that have sold off for short-term reasons this summer could be excellent pickups to ride the AI wave, as long as they find their place in this ongoing paradigm shift. In that light, the following three look like strong buys on weakness.
Super Micro Computer (NASDAQ: SMCI) has been on a roller-coaster ride over the past year, crashing after its accounting firm quit last October, only to recover strongly after its new accountant gave the thumbs-up to its books in February.
However, Supermicro’s stock sold off after its recent earnings report, which underwhelmed on both the top and bottom lines. Supermicro said that its customers were a bit slow in making architectural decisions, while tariffs and write-downs on old inventory pressured gross margins.
But there could be better things on the horizon. Supermicro still grew revenue 47% in the fiscal year ending in June and forecasted at least 50% revenue growth in fiscal 2026. Supermicro management also said it expects to increase its large-scale data center customers from four to between six and eight in fiscal…
..
