The market isn't giving these AI stocks enough love.
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The market is missing out on many stocks that could benefit from AI adoption in the long term. Some companies use AI to solve real-world problems, while others provide the raw materials that enable the AI boom to advance. We're even seeing undervalued companies that own the chips that make AI and enable it to work its magic, as well as those that build and operate the data centers that host the processors it uses. It has become.That being said, here are three that are underrated AI stocks Long-term investors should consider buying now.
iCAD
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iCAD (NASDAQ:ICAD) AI-based screening detects breast cancer cases faster than traditional mammograms. Additionally, iCAD's products save time for radiologists and breast cancer screening centers.
The company's performance improved significantly in the last quarter. I believe this recovery reflects the boost the company is getting from its partnerships. GE Healthcare (NASDAQ:GEHC) and of the alphabet (NASDAQ:googleNASDAQ:Google) Google. This performance improvement can also be attributed to the increased awareness of AI and AI's highly capable new CEO, Dana Brown.
Last quarter, the company's EBITDA loss narrowed rapidly to $400,000 from $3.6 million in Q1 2023. Meanwhile, in his first three quarters of 2023, iCAD averaged 73 orders per quarter. There were 89 orders in the last quarter, showing that business is accelerating. With only 37% of U.S. breast cancer screening facilities using AI-based solutions, iCAD has a lot of room to grow.
Additionally, the company has developed a product that successfully predicts the likelihood of a heart attack based on the amount of calcium in the thoracic artery. This product is currently under FDA review.
Iron Mountain (IRM)
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iron minen (New York Stock Exchange:IRM) owns and operates approximately 24 data centers in the United States and India.
Given that data centers are at the center of the AI boom, it's no surprise that IRM reported very strong fourth quarter results. Specifically, the company's revenue increased 11% year-on-year to $1.4 billion quarter-over-quarter, and EBITDA increased 11% year-on-year to $525 million. Both revenue and adjusted EBITDA set all-time highs last quarter.
investment bank oppenheimer identified IRM stock as a good stock to buy in the real estate sector in December.
This stock has a dividend yield of 3.25%.
Broadcom (AVGO)
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american bank Recently named a chip and networking giant broadcom (NASDAQ:AVGO) as one of the “obvious beneficiaries” of AI investments.
TD Cowen notes that AI is expected to generate about 35% of Broadcom's revenue this year. Custom silicon and Ethernet switching businesses will also benefit from the boom. Additionally, TD Cowen said that Broadcom's recent big customers for his AI ASIC chips are: meta (NASDAQ:meta).
Japanese banks Mizuho raised its price target on Broadcom's stock to $1,625 in response to Broadcom's fourth-quarter results. Analysts, on average, expect the company's earnings per share to rise from $42.25 in 2023 to $46.78 this year and $46.63 next year.
Given this strong expected growth, the company's forward price/earnings ratio of 26.8x is very attractive, making AVGO one of the best AI stocks to buy.
On the date of publication, Larry Ramer held a long position in ICAD. The opinions expressed in this article are those of the writer and are subject to InvestorPlace.com Publishing Guidelines..
