Best AI stocks to watch in Q4 2024
Broadcom, Nvidia, Advanced Micro Devices, Palantir Technologies, Fortinet and Accenture could be the six best AI stocks to watch. These companies are selected as the top % shares included in the iShares Future AI and Tech ETF.
What's on this page?
Broadcom, Nvidia, Advanced Micro Devices, Palantir Technologies, Fortinet and Accenture could constitute the six best AI stocks to watch in Q4 2024. These companies are selected as the top % shares included in the iShares Future AI and Tech ETF.
Artificial Intelligence (AI) could become the latest investing theme of choice — the tech world has seemingly had enough of disruptive tech, cryptocurrency, Web3, Blockchain, and the Metaverse — and is ready to set its hopes on the next big thing.
Of course, while these former concepts are on the backburner as the days of ultraloose monetary policy have ended, AI is becoming the driving force for big tech. Indeed, almost all of the S&P 500’s gains in 2024 have come from just seven companies, all of whom are potentially riding the AI wave to some degree.
There may be a difference between AI and the rest though. Artificial Intelligence is already in use across a wide variety of real-world applications, including in entertainment, social media, art, retail, security, sport analytics, manufacturing, self-driving cars, healthcare, and warehousing alongside dozens of other sectors.
Every Netflix recommendation, every supermarket rewards purchase, and every football match is analysed ever more relentlessly in order to provide more and better data. And while consumers have always understood — even peripherally — that AI was taking over more and more of the heavy lifting; the sector’s investment catalyst has finally arrived.
This catalyst is of course ChatGPT, the OpenAI-developed chatbot which garnered over 1 million users in just five days. It took Facebook 10 months, and Netflix three and a half years to hit the same milestone.
Taking the world by storm, it now boasts over 200 million active users a week, and investors are now considering whether the innovation could make entire careers in areas such as copywriting, accounting, personal training, and even software development entirely redundant.
Whisper it, but some even believe ChatGPT could be instrumental in taking on Google’s dominance in the internet search space.
If this sounds fanciful — and there’s been no shortage of fanciful tech-related claims in the recent past — consider both the pace of technological change over the past 50 years, the hundreds of once vibrant and now abandoned career paths, and the fact that Google itself usurped Yahoo’s search crown.
AI development is exceptionally expensive, and for every ChatGPT breakthrough, there are hundreds of costly failures. Therefore, the best AI stocks could be predominantly the larger blue chips — which also helps to diversify any investment in the event that their AI projects fail.
Best AI stocks to watch
1. Broadcom Inc
Broadcom Inc is a global technology company who specialise in semiconductor solutions and infrastructure software. Its solutions help manage data and optimise operations in areas such as broadband, networking, wireless and enterprise software.
The company reported strong Q2 results which was largely driven by AI demand. Revenue from these products reached a record $3.1 billion. Revenue on its infrastructure products also increased and as a result, the company has increased its full year guidance to a consolidated revenue of $51 billion.
Our analysts have given the stock a strong buy rating with an average price target of $197.05 in the next 12-month period, up 27.85% from its current price.
2. Nvidia
Nvidia is well-known as one of the world’s most valuable chipmakers, used in electronics ranging from smartphones, to cars, to high-end computing. It’s worth noting that Nvidia shares have risen by more than 120% year-to-date to $107 and their Q2 revenue of $30bn also increased by 120% year-on-year.
But their most advanced deep learning chips might mean that the NASDAQ company is still undervalued. They’re already in use at clients such as Alphabet and Facebook owner Meta to power both internal and user facing AI applications.
As AI becomes ever more mainstream, demand for these chips could surge, and importantly, there is a high barrier to entry — Nvidia has a wide economic moat surrounding its market position as the ‘bricks and mortar’ AI choice.
Our analyst have given the stock a strong buy rating anticipating a potential upside of 44.28% in the next 12-month period.
3. Advanced Micro Devices
Advanced Micro Devices is a semiconductor company which focuses on high performance computing and graphics visualisation, both of which are important in the advancement of AI technology. Its introduction of 3-D V-Cache technology in the AMD EPYC processors has improved how data is stored and increased performance up to 66%, helping to significantly advance AI workloads.
On top of this, the company is also on track to reduce greenhouse gas emissions by 50% come 2023. This makes AMD an attractive option for investors who value environmental responsibility.
The company reported strong Q2 results where sales increased by 7%, mostly driven by their AI business.
Our analysts have given the stock a strong buy position, with an average price target of $190.25 in the next 12-month period, up 36.44% from its current price.
4. Palantir Technologies
Palantir Technologies is a software company which specialises in data analytics and AI. Its core product was first used by the US government as a counter terrorism tool but it has since expanded its services to local governments and private corporations.
The company’s Q2 results for 2024 reported a revenue increase of 27% year-on-year reaching $678 million, with its US commercial revenue growing by 55% briging in $159 million. Its EPS also grew by 500% to $0.06 compared to the same time last year and its net income increased for the seventh consecutive quarter.
Following this report, Palantir Technologies has raised its full year revenue guidance to reach up to $2.75 billion, with US commercial revenue reaching $672 million, up 47% year-on-year.
5. Fortinet
Fortinet offers cyber security solutions to businesses in many sectors including retail, finance and government. Its platform uses AI and machine learning to identify and respond to any cyber threats.
At the end of 2023 the company brought in a revenue of $5.30 billion, up 20% from the year before. Product revenue increased by 8% reaching 1.93 billion and total gross profit increased by 22% to $4.07 billion.
Our analysts have given the stock a hold rating with an average price target of $71.35 in the next 12-month period, down 5.07% from its current price.
6. Accenture
Accenture is a professional services company which offers a range of services including consulting, strategy, technology and operations. It offers expertise in areas such as AI, cloud computing and data analysis.
In 2023 the company brought in a revenue of $64.1 billion, up 8% year-on-year. It also brought in $72.2 billion from new bookings from a record 106 clients.
Accenture estimate that with most companies only 40% of its workload is on the cloud and only 10% of clients have mature AI and data capabilities. Going forward, the company aim to work with clients looking to improve their tech competencies.
Our analysts have given the stock a buy rating with a potential upside of 4% over the next 12-month period.
How to invest or trade in AI stocks with us
- Find out more about AI stocks
- Open an account with us or practise on a demo
- Select your opportunity
- Choose your position size
- Manage your risk
- Place your deal and monitor your trade
You can either invest in shares directly or trade using spread betting or CFDs to benefit from leverage.
Keep in mind, leverage means you can gain or lose money faster than expected. Because your position size is far greater than your deposit, you could lose more money than you put in. Be aware also that past performance is not an indicator of future returns.
Learn more about the differences between trading and investing here.
Top AI stocks to watch summed up
These are just a selection of some of the top AI stocks available. Always do your own research. Past performance is not a guide to future returns.
Trade and invest in over 17,000 UK, US and global shares from zero commission with us, the UK’s No.1 trading provider.* Learn more about trading or investing in shares with us, or open an account to get started today.
*Based on revenue excluding FX (published financial statements, October 2021).
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
