Along with the newly-reclaimed world’s richest person, Elon Musk, there have been crucial players in the world of AI and machine learning (ML). Many of us are likely thinking to ourselves, “Should we be more excited or more worried about it?” At the moment, there are a couple of more pressing questions:
– Can we expect to profit from it?
– How excited should we feel about said profit?
The short answers are yes and very much so, respectively. Let’s use the here and now to secure our profit now while AI only makes forward, red-hot progress. A significant portion of us already uses this revolutionary tech in many aspects of our daily lives. Wouldn’t now be a good time to hop on board?
For Part 1 of 2, I’ll look at three companies that, regardless of the market’s AI craze, are names that we’re more than likely to remember years from now. Join me here for a peek:
Micron Technology Inc (MU)
Known for its cutting-edge memory and storage tech, Micron Technology Inc. (MU) has been a crucial part of the AI and ML (machine learning) discussion(s). From data centers to self-driving cars, its high-performance products have always had something to show for their presence amidst the market competition. One “AI boost,” if you will, was its acquisition of FWDNXT in 2019. Having a good future outlook among shareholders and analysts alike, MU is up YTD by 38.72% and shows $23.06 billion in TTM (trailing twelve-month) revenue at $1.34 per share, during which it earned a net income of $1.61 billion via its 7.02% profit margin. MU has a P/S (price to sales) ratio of 2.98x, a P/B (price to book) ratio of 1.44x, and a low 25.97% D/E (debt to equity) measure. MU presently offers an annual 0.67% dividend yield with a quarterly payout of 12 cents ($0.48/yr) per share, using a 31.56% payout ratio. With a 10-day average volume of 25.21 million shares, MU has a median target of $70, with a high of $100 and a low of $45, representing almost 45% of its upside potential. Analysts say Buy and Hold.
Tesla Inc (TSLA)
Some maintain, even during the ChaptGPT revelation, that Mr. Musk’s TSLA remains one of the premier AI stocks available. There are certainly arguments to be made for TSLA because it’s poised to reap powerhouse profits from the AI revolution. An early player in the space, TSLA owns proprietary data sets, has domain expertise, and has an already-developed grasp of AI technology. With the world’s largest driving data pool at its disposal, TSLA‘s fusion of ML (machine learning) data and powerful AI modeling gives it rock-solid strength.
With a TTM asset growth of 31.49%, TSLA has $86.03 billion in same-period revenue at $3.45 per share, from which it profited $11.8 billion through its 13.66% net margin. With 3-5 year forecasted EPS growth at 80.7%, a PEG (price/earnings/growth) ratio of 1.31x, and an ROE (return on equity) of 28.70%. TSLA is expected to show $23.9 billion in sales at $0.77 cents per share for Q2 2023 and has a levered free cash flow of $2.45 billion with a 10-day average trading volume of 135.84 million shares. TSLA’s median price target is $187.40, with a $300 high and a $71 low. Its new range allows room for a more than 44% price jump, and analysts recommend we Buy and Hold TSLA.
Microsoft Corp (MSFT)
Since 2019, Microsoft (MSFT) has been actively invested as the name behind OpenAI, the visionary creators of ChatGPT. In January 2023, MSFT reinforced its dedication to AI-related innovations by expanding the partnership with a multiyear, multibillion-dollar investment. With a mission to democratize AI, MSFT is committed to universal accessibility. Through its Azure cloud computing platform, MSFT further empowers individuals and organizations globally to continue unlocking AI’s potential.
MSFT boasts a 0.93 beta, while it casually carries an enterprise value of just over $2.25 trillion. With a TTM revenue of $207.59 billion at $9.25 per share, MSFT made a net income of $69 billion via its 33.25% profit margin. During its latest earnings call, MSFT surprised analysts’ EPS and revenue predictions by 9.76% and 3.59%, respectively, also reporting year-over-year growth in revenue (+7.08%), net income (+9.39%), EPS (+10.36%), and net profit margin (+2.15%). MSFT currently has a 0.82% dividend yield and a quarterly payout of 68 cents ($4.76/yr) per share. With a PEG of 2.3x, $42.96 billion in free cash flow,and a 10-day average volume of 21.53 million shares, MSFT’s median price target is $340, with a high of $450 and a low of $232, allowing room for a potential price increase of over 35%. Buy and Hold MSFT.
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