Seven AI stocks named for summer, with NVIDIA earnings on Aug. 28 in focus
NEW YORK, July 26. Seven companies were named top AI investment candidates for the summer in a Benzinga analysis by Dan Schmidt. The list spans chipmakers, cloud software, a cybersecurity firm, and one electronics manufacturer, with NVIDIA Corp. (Nasdaq: NVDA) flagged ahead of an Aug. 28 earnings call that the report says could push shares out of their current trading range.
Key takeaways
- A Benzinga analysis by Dan Schmidt named seven top AI investment candidates for the summer, spanning chipmakers, cloud software, a cybersecurity firm, and an electronics manufacturer.
- NVIDIA (NVDA), priced at $206.80 and rangebound since announcing a 10-for-1 stock split, was flagged ahead of an Aug. 28 earnings call the report says could push shares out of their range.
- The seven picks are Microsoft ($381.40), NVIDIA ($206.80), Meta Platforms ($594.10), ServiceNow ($97.83), Taiwan Semiconductor ($402.18), Celestica ($307.00), and Palo Alto Networks ($324.55).
- Schmidt screened for AI stocks using four criteria: near-term catalysts like earnings or upgrades, depth of each company's AI project pipeline, executive track records, and technical signals such as RSI and moving average crossovers.
- Celestica's shares have more than doubled over the past year yet still trade at a P/E of 21 with a market cap below $7 billion.
NEW YORK, July 26. Seven companies were named top AI investment candidates for the summer in a Benzinga analysis by Dan Schmidt. The list spans chipmakers, cloud software, a cybersecurity firm, and one electronics manufacturer, with NVIDIA Corp. (Nasdaq: NVDA) flagged ahead of an Aug. 28 earnings call that the report says could push shares out of their current trading range.
Seven picks, sector by sector
Microsoft Corp. (Nasdaq: MSFT) trades at $381.40, carrying a price-to-earnings ratio of 38.4 and a Relative Strength Index reading of 51. The analysis describes the RSI as well below overbought territory. NVIDIA, priced at $206.80, has been rangebound since the company announced a 10-for-1 stock split.
Meta Platforms (Nasdaq: META), at $594.10, is developing Llama 2, an open-source large language model, and Cicero, which the company says was the first AI to play the strategy game Diplomacy at a human level. ServiceNow Inc. (NYSE: NOW), at $97.83, carries a market cap of $158 billion and more than $8 billion in annual revenue. The report flagged the company's July 24 earnings release as a near-term catalyst.
The chip supply chain
Taiwan Semiconductor Co. (NYSE: TSM), priced at $402.18, manufactures the specialized chips on which AI model training depends. The analysis positions the company as a components supplier to others on the list. Celestica Inc. (NYSE: CLS), a mid-cap electronics manufacturer at $307.00, makes the network switches that data centers use to train and deploy AI models. Its shares have more than doubled over the past year, according to the report, yet the stock still trades at a P/E of 21 with a market cap below $7 billion.
Cybersecurity's place in the build-out
Palo Alto Networks Inc. (NYSE: PANW), priced at $324.55, holds a P/E of 48.2 and an RSI of 57. The company has developed a product it calls Precision AI to counter threats generated by adversarial AI systems. The analysis notes PANW shares have retreated from an all-time high reached in the first quarter of 2024.
How the report screens for AI stocks
Schmidt identified four criteria for selecting names in the sector: near-term catalysts such as earnings releases or analyst upgrades, the depth of each company's AI project pipeline, executive track records, and technical signals including RSI readings and moving average crossovers.