Exploring the Potential of Under-the-Radar AI Stocks
The investment landscape of 2023 has been dominated by one overarching theme: artificial intelligence (AI). Since the launch of ChatGPT, the conversational chatbot, in late 2022, tech giants have been racing to incorporate the latest AI technology into their business models. Investors, in turn, have been eagerly bidding up shares of companies they believe will capitalize on this trend. While chipmaker Nvidia has emerged as a frontrunner, under-the-radar AI investments like Advanced Micro Devices (AMD) and Symbiotic could soon take the spotlight. In this article, we will explore why these stocks have the potential to be excellent additions to investment portfolios.
Advanced Micro Devices:
Graphics processing units (GPUs) and other computing hardware form the backbone of many consumer-facing technologies, including AI. While Nvidia currently dominates the market for powerful AI-capable chips, Advanced Micro Devices is rapidly catching up and introducing impressive offerings. This presents a significant opportunity for long-term investors.
Traditionally, AMD and Nvidia have been rivals in computing hardware, with Nvidia leading the bleeding edge while AMD competes on price, offering better value for money. This rivalry is now extending to AI chips as AMD aims to secure a market share that CEO Lisa Su expects to be worth $400 billion by 2027.
AMD recently announced two new chips in its M1300 series, the M1300x, and M1300A, designed to run large language models. These models generate original content based on extensive training data. According to Su, AMD's new chips are comparable to Nvidia's flagship H100 chip and even outperform it in some aspects. The company has partnered with industry giants like Microsoft and Meta Platforms, who will deploy the chips in their data centers.
In the third quarter, AMD reported a 4% year-over-year increase in earnings, reaching $5.8 billion. As its AI chip business scales up, investors can expect accelerated revenue growth in the coming quarters.
Symbiotic:
While AI is often associated with large language models, companies like Symbiotic use this technology to revolutionize warehouse operations. Symbiotic aims to improve efficiency by automating warehouses, a timely opportunity given the increasing demand for streamlined processes.
Automation offers several advantages for companies, including reducing labor costs and increasing productivity. Symbiotic utilizes AI technology to make industrial robots more autonomous and responsive to challenges, enhancing the speed and accuracy of warehouse operations. Walmart, America's largest retailer, has shown confidence in Symbiotics' offerings by planning to install warehouse robotics in all 42 of its U.S. distribution centers. These systems will complement human workers and boost overall productivity.
Symbotic reported a 60% year-over-year revenue growth in the fourth quarter, reaching $391.9 million, driven by strong demand for its automation systems. While the company is not yet profitable on a GAAP basis, its net loss decreased by approximately 15% to $45.4 million, indicating a potential pathway to profitability as it continues to scale up operations.
Advanced Micro Devices and Symbolic present compelling investment opportunities in the fast-growing AI market. As a large and mature company with diversified revenue streams, AMD offers a safer bet for investors. On the other hand, Symbotic's smaller size and lack of profitability provide the potential for long-term growth as its business reaches scale. As AI continues to shape various industries, investors should consider these under-the-radar stocks for their portfolios, recognizing the unique advantages and growth potential they offer.
George Smith, with over a decade in tech journalism, excels in breaking down emerging tech trends. His work, spanning tech blogs and print, combines in-depth analysis with clarity, appealing to a wide readership. George's pieces often explore technology's societal impact, showcasing his foresight in industry trends.
