Artificial intelligence (AI) is still the hottest trend in 2024. After capturing investor imagination last year and sending almost every AI-adjacent stock skyward, the market may be ready to take a closer look at individual company potential.
For example, shares of C3.ai (NYSE:AI) are down 40% from their 52-week high as the AI software platform pushes profitability further into the future. Yet there are AI stocks not named Nvidia (NASDAQ:NVDA) that are still worth buying. The three stocks below should be on your must-buy list for March before their valuations explode.
Advanced Micro Devices (AMD)
It’s only natural that Advanced Micro Devices (NASDAQ:AMD) will top the list. The chipmaker represents the biggest threat to Nvidia’s dominance in the space. I’ve argued previously that I don’t believe Advanced Micro will overtake its rival but that the stock is still worth buying. The AI space is still so new and growing rapidly that there will be plenty of profits to go around and AMD stock will be one of the primary beneficiaries.
The recently introduced line of MI300 processors was explicitly designed for the complex tasks AI demands of chips. Even though they are brand new to the market, Advanced Micro told analysts it already had orders for $3.5 billion worth of the chips. Most of that is weighted towards the back end of the year, but it is one of the chipmaker’s fastest product ramps.
But demand could grow as the year progresses. Whereas Nvidia is in a constant state of chip shortages and is rapidly building out capacity to match it, Advanced Micro says it has sufficient capacity to meet even greater demand should it arise. AMD stock has been slightly negative since last month’s earnings report but that gives you time to buy before it begins the next leg of its journey higher.
Twilio (TWLO)
I’ll admit Twilio (NASDAQ:TWLO) is a bit of a contrarian play. Some might even argue it’s more in the category of overhyped AI stocks like C3.ai than an AMD clone. Down 23% year to date, the stock is battered. Yet a good case can be made for buying the heavily discounted now before it recovers and attains new heights.
Twilio provides cloud-based communication services. It infused AI capabilities throughout its communication and customer services and applications. Verify uses it for omnichannel authentication. Unify for personalized customer engagement and Voice Intelligence for more realistic customer conversations. As businesses adopt AI-driven customer interactions, Twilio’s stock could benefit.
TWLO stock collapsed due to a disappointing quarterly report, but management sees that changing this year. Much of the headwinds it faced were due to declining cryptocurrency volumes, a market that uses its authentication solutions. Twilio saw full-year double-digit growth without crypto, but crypto will still be a drag early this year. However, Twilio will lap the worst of it as the year progresses. With additional tailwinds like increased volumes elsewhere pushing it forward, TWLO stock has a clear path to future growth.
Salesforce (CRM)
Another cloud-based software solutions provider, Salesforce (NYSE:CRM) integrates AI into its customer relationship management (CRM) solutions. AI is now a mission-critical part of its business.
Salesforce’s AI platform, Einstein GPT Copilot, offers predictive analytics and personalized recommendations. Customers are flocking to the product and the company now counts 17% of all Fortune 100 companies as clients. Einstein performs 1 trillion transactions a week for them. They are also spending more money with Salesforce than previously did.
When customers upgrade to CRM stock’s Unlimited Edition+ (UE+) package, Salesforce found customers increased their spending by more than 70%. UE+ bundles Einstein AI with data cloud solutions, which allows clients to accelerate their growth using AI, data and CRM. In more than two-thirds of its industries, Salesforce is seeing annual recurring revenue spike 50%.
Salesforce has become one of the top AI stocks to buy, and it should only perform even better from here.
On the date of publication, Rich Duprey did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.