2 AI Stocks to Buy Hand Over Fist in March

The market for artificial intelligence (AI) solutions is incredibly strong right now. Spending on generative AI software is expected to reach $143 billion by 2027, according to IDC.

Investing some extra money in a group of well-chosen innovators in this burgeoning market could lead to great returns. Here are two AI stocks to buy now.

1. Advanced Micro Devices

Shares of Advanced Micro Devices (NASDAQ: AMD) have rocketed to new highs, as investors focus on the company’s prospects in the AI chip market that has been dominated by Nvidia. The company’s new data center chip for AI is already seeing strong customer demand and could fuel the company’s growth over the next few years.

AMD expects data center GPUs to rake in over $3.5 billion in revenue for 2024, which is a small percentage of its total revenue, but it’s expected to grow significantly. Management said its new MI300 launch will result in the fastest launch ramp-up to $1 billion in revenue in the company’s history. For a company that saw annual revenue more than double over the last three years, that should tell investors a lot about the level of demand on the horizon.

AMD management believes the high memory bandwidth in the MI300X chip provides a significant advantage in AI inferencing, where an AI model becomes smart enough to make predictions from new data. On the last earnings call, management reported that several customers are using the MI300X for AI inferencing and training.

Some of AMD’s biggest customers are Microsoft, Meta Platforms, Oracle, and Super Micro Computer. Outside of AI, the rest of the business should have a good year given the improving outlook for the PC market, where AMD’s Ryzen desktop chips have gained share from Intel.

These catalysts could lift the stock higher in 2024, but investors who patiently hold shares could see spectacular gains over the next decade.

2. C3.ai

C3.ai (NYSE: AI) makes AI applications that help companies with demand forecasting, supply chain optimization, and other processes. The stock has pulled back off its previous highs and could be a timely buy ahead of accelerating growth in 2024 and beyond.

C3.ai is at the beginning of a massive spending curve for AI services. It primarily generates revenue through a subscription-based model, which should help the company turn a healthy profit down the road. Its customers include the federal government, which made up 54% of bookings last quarter, in addition to companies in the manufacturing, agriculture, chemicals, energy, and consumer goods industries.

The company’s revenue was growing over 30% year over year in 2022, but with the recent transition to a consumption-based pricing model, growth has slowed — but it’s starting to reaccelerate. Revenue grew 18% year over year last quarter, with new customer agreements up 85% year over year.

The company signed new agreements with major companies, including Boston Scientific and T-Mobile. The range of industries that are showing interest in C3.ai’s enterprise AI platform shows a business that is on the verge of significant growth. The stock’s 34% return over the last year could be the beginning of a monster bull run over the next 10 years.

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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. John Ballard has positions in Advanced Micro Devices, C3.ai, Nvidia, and Super Micro Computer. The Motley Fool has positions in and recommends Advanced Micro Devices, Meta Platforms, Microsoft, Nvidia, and Oracle. The Motley Fool recommends C3.ai, Intel, and T-Mobile US and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, long January 2026 $395 calls on Microsoft, short January 2026 $405 calls on Microsoft, and short May 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.

2 AI Stocks to Buy Hand Over Fist in March was originally published by The Motley Fool