Artificial intelligence (AI) is one of the most exciting markets right now due to the seemingly unlimited potential of its applications in businesses everywhere. Many large companies are making massive investments to integrate AI into their platforms and services to stay ahead of the charge and offer customers the latest and greatest edition tech has to offer.
The three stocks we will examine today are currently on a dip and trading at a lower price than their actual value. When stocks dip due to volatility or other short-term events, investors have an excellent opportunity to buy when the stock is cheaper and see significant profits when it bounces back to its former price.
We’ll detail why these three AI stocks are so prominent in today’s AI market and why the dips they are facing now give investors a chance to profit from their inevitable future growth.
C3.ai (AI)
C3.ai (NYSE:AI) is unique to the other stocks on this list as the company is dedicated entirely to AI software for businesses. It offers AI software-as-a-service to assist other companies looking to integrate AI platforms into their operations.
The potential applications of C3.ai’s software are near the point where it is limited only by the imagination and vision of the company utilizing it. Because of the extensive range of uses possible within C3.ai’s AI development platform, the company has no peers that offer a similar service that makes up direct competition.
Despite its state-of-the-art AI software and lack of competition, C3.ai has been on the dip since late February. The stock has fallen over 40% this year and sits at just over $21, almost half its peak earlier this year.
C3.ai has taken a hit this year due to inflation affecting businesses’ spending power. However, despite these headwinds, the company is not showing a weak performance. The company’s most recent earnings report showed a year-over-year revenue increase of 18% and a 58% profit margin.
While the company could improve its earnings and is priced low, there is no reason not to believe that C3.ai will be one of the first companies to benefit from businesses’ increasing demand for AI platforms.
Crowdstrike (CRWD)
Crowdstrike (NASDAQ:CRWD) is one of the most prominent cybersecurity companies to date and is also leading the charge in incorporating AI into its platform. Its generative AI analyst, Charlotte AI, offers advanced features as part of the company’s leading Falcon platform.
The company has seen a stellar performance since the summer of 2023 when the stock shot up 300% to reach its all-time high in February of this year. In fiscal 2024, the company generated over $3 billion in revenue and generated free cash flow of $938.2 million.
Subscription revenue accounts for almost all of the company’s income and has some of the highest retention and adoption rates in the cybersecurity sector. While the company’s outlook expects another $1 billion increase in revenue over the next year, to much surprise, the stock has fallen over $40 in the past month.
Considering Crowdstrike has been one of the most expensive cybersecurity stocks, a dip like this presents an exceedingly rare opportunity for interested investors. While the stock may dip further with such a high valuation, there is a likelihood Crowdstrike will see another leap in the years to come. That makes the current dip a one-of-a-kind chance.
Advanced Micro Devices (AMD)
Advanced Micro Devices (NASDAQ:AMD) is undoubtedly a force to be reckoned with. It is a stock that has been on many investors’ lists over the past few years. The AI chip manufacturer is second only to tech giant Nvidia (NASDAQ:NVDA) but is in a fantastic position to capitalize on the growing demand for AI chips.
This past month, investors had a golden opportunity to buy AMD on the dip. The stock fell almost 20% due to volatility and macroeconomic headwinds. While AMD does not have as much market share as Nvidia, its products are up to par — some might say even better.
AI chips allow users to extract the processing power necessary to run through the enormous amounts of data required for AI applications. While Nvidia’s H100 chips are exceedingly popular, AMD’s MI300 chips are even more powerful. AMD also offers open-source software that pairs with the chips, which claims to provide better accessibility to users than Nvidia’s software. AMD has profitable deals with monster companies like Microsoft (NASDAQ:MSFT) and Meta Platforms (NASDAQ:META) for its chips, ensuring a steady income stream. With the coming boom in AI, AMD will certainly be at the forefront. Its current low price is something any investor should keep an eye on this year.
On the date of publication, Joel Lim did not have (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.