| Stock | Price | 52 Week Range | Marketcap | EPS | Dividend Yield | Chart (24H) | Sector | Employees | Last Updated |
|---|---|---|---|---|---|---|---|---|---|
 Alphabet Inc. GOOG | $191.86 | 2.34T | 7.54 | 0.41% | Communication Services | 180,895 | 13 mins ago | ||
| $136.14 | 3.33T | 2.53 | 0.03% | Technology | 29,600 | 6 mins ago | |||
| $433.80 | 3.23T | 12.09 | 0.76% | Technology | 221,000 | 13 mins ago |
The investment spotlight has shifted from the frenzied buzz around “Big Tech” to sturdier returns in specialized sectors such as machine learning. Recent downturns in tech giants present machine learning (ML) stocks as prime candidates for the next big venture. As the initial euphoria around AI cools, tangible returns are becoming more attractive to investors. If you’re eyeing the future of AI and ML, these three stocks could make your summer unforgettable.
Editor's Note: Analysis and insight for this article were originally sourced sourced from our friends at InvestorPlace
Alphabet (GOOG, GOOGL): Rising from the Ashes
A Diamond in the Rough
Alphabet, more commonly known by its flagship subsidiary Google, recently faced a stock dip after its Q2 2024 earnings report. Despite the market’s reaction, a closer examination reveals robust growth trajectories. Alphabet posted a 14% year-over-year increase in total revenue, achieving $84.7 billion. The tech giant’s operating margin also improved by 300 basis points to reach 32%.
Google Cloud: The Shining Star
Alphabet’s cloud arm, Google Cloud, drove much of this quarterly top-line growth. Google Cloud surpassed $10 billion in quarterly revenue for the first time, reaching a landmark $1 billion in quarterly operating profit. Concerns remain about Alphabet’s ad revenue, which, although it beat analysts’ expectations, grew at a slower pace compared to the first quarter. Adding to the intrigue is Alphabet’s “bloated” capital expenditure, amounting to $13.6 billion for the quarter. This has made investors cautious about how long it will take for Google’s costly AI investments to pay off.
Investment Case: Why Alphabet Deserves Your Attention
Alphabet’s key area of strength lies in its ambitious investments in AI and ML. These investments might seem capital-intensive initially, but they offer substantial long-term returns. Alphabet currently trades at a compelling multiple—21.2x forward earnings—making it the cheapest of all tech giants and a promising pick in a sector poised for exponential growth.
Analyst Ratings Overview
| Metric | GOOG | GOOGL |
|---|---|---|
| Consensus Rating | Overweight | Overweight |
| Average Price Target | $3,343.41 | $3,355.59 |
| Potential Gain | 24.1% | 24.5% |
| Number of Ratings | 43 | 43 |
Analysts’ Outlook:
Analysts are highly bullish about Alphabet, with 43 out of 44 ratings being either Buy or Overweight. They believe the stock will outperform the market, supported by Alphabet’s dominant position in digital advertising, a growing cloud business, and innovative efforts in AI and other emerging technologies.
Nvidia (NVDA): The Powerhouse of AI Hardware
From Strength to Strength
Nvidia stands tall as a market leader, and its stock performance is a testament to that. The company’s shares have more than doubled year-to-date, and the chipmaker rallied an impressive 239% in 2023. However, the recent tech sector rout also affected Nvidia, causing a 6.8% drop and a fall of over 23% since July 10th. This downturn presents an enticing entry point for savvy investors.
The Catalyst: High-Demand for High-Performance Chips
Nvidia’s forte lies in manufacturing high-performing chips essential for developing ML algorithms and large language models (LLMs) that underpin generative AI. Despite Wall Street analysts’ struggles to predict Nvidia’s quarterly earnings, the unrelenting demand for its chips suggests a strong longer-term growth trajectory.
Investment Case: Why Nvidia is a Strong Bet
When it comes to ML and AI, Nvidia is indispensable. It builds the very hardware that powers these advanced technologies, making it a cornerstone stock for anyone aiming to capitalize on the AI sector. This recent dip offers a golden buying opportunity for long-term investors eager to leverage Nvidia’s continual innovation.
Analyst Ratings Overview
| Metric | Value |
|---|---|
| Consensus Rating | Overweight |
| Average Price Target | $643.41 |
| Potential Gain | 14.1% |
| Number of Ratings | 34 |
Analysts’ Outlook:
Analysts are overwhelmingly bullish on Nvidia, with 24 out of 34 analysts rating the stock as “Buy” or “Overweight.” The average price target of $643.41 suggests a healthy potential gain of 14.1% from its current price, based on Nvidia’s continued dominance in AI, graphics processing, and high-performance computing.
Microsoft (MSFT): The Cloud Contender
Stable Yet Dynamic
Microsoft has been a heavyweight in the machine learning sector for over a decade, significantly investing in ML and AI since the early 2010s. A turning point came in 2016 with the creation of the Microsoft AI and Research Group, which consolidated various AI research efforts under one umbrella to accelerate progress. Fast forward to today, and Microsoft Azure remains essential in deploying ML development tools.
Azure: The Backbone of Microsoft’s ML Initiatives
Azure’s growth has been phenomenal. The first few quarters of 2024 saw astronomical demand for AI workloads, with Azure’s revenue growing 29% year-over-year, albeit falling short of analysts’ 31% expectation. This slight underperformance marks the first miss for Azure since 2022 but doesn’t undermine its role as a key conduit for ML and AI advancements.
Investment Case: Why Microsoft Stands Out
Microsoft’s diversified approach to ML and AI grants it a competitive edge. Its comprehensive cloud services, despite minor setbacks, are primed to benefit from the growing AI sector. Investors should consider Microsoft as a robust long-term investment in the machine learning space. The breadth of its cloud computing platform positions it to capitalize on rising AI demands, making Microsoft a standout in the ML stock market.
Analyst Ratings Overview
| Metric | Value |
|---|---|
| Consensus Rating | Overweight |
| Average Price Target | $342.44 |
| Potential Gain | 14.1% |
| Number of Ratings | 34 |
Analysts’ Outlook:
Analysts are overwhelmingly bullish on Microsoft, with 26 out of 34 analysts rating the stock as “Buy” or “Overweight.” The average price target suggests a potential gain of 14.1% from the current price, supported by Microsoft’s strong cloud computing business, growing Azure revenue, and its diversified product portfolio.
Three stocks—Alphabet, Nvidia, and Microsoft—are titans in the machine learning sector, each offering unique and promising opportunities. The recent tech market turbulence has rendered these stocks more accessible at attractive prices, setting the stage for smart investors to seize the moment. Whether it’s through Google’s booming cloud services, Nvidia’s indispensable hardware, or Microsoft’s expansive Azure platform, the future is brimming with potential in the machine learning domain. Seize these opportunities, and let this summer be a stepping stone to unparalleled growth in the machine learning arena.
