Top 3 AI Stocks Poised for Explosive Growth

Published Date: 11/07/2024

Discover three artificial intelligence stocks with strong buy ratings and impressive revenue growth. From AI servers to FPGA solutions, these companies are leading the AI revolution.

Are you interested in artificial intelligence but don't know where to start? Researching AI stocks can be overwhelming. To cut through the noise, it's best to look to the analysts who share their insights on certain assets through ratings. This gives us an easier way to identify quality stocks, with an indication of how high they could go. Analysts rate stocks on a scale of strong sell and rise to a sell, hold, buy, with strong buy being the highest. Naturally, those with strong buy ratings are considered the cream of the crop. However, ratings aren't everything. Investors should still err on the side of caution and conduct their due diligence, as highly rated AI stocks don't automatically mean it's a sure winner. 

Ratings are just a piece of the puzzle that can complement your stock selection process. But they are a good place to start. So, today, I will look at three buy-rated AI stocks with great potential. To get my list, I screened the market and used the following criteria  a strong buy rating from analysts, positive earnings and revenue year-over-year (YOY) growth, and potential upsides exceeding 40%. I sorted the list based on the highest to lowest potential upside based on analysts' high target prices. 

So, let's start with  Super Micro Computer (SMCI) The market has high hopes for Super Micro Computer (NASDAQ SMCI) as the adoption of AI continues. As a long-standing partner of Nvidia and specializing in AI servers, the company is standing at the forefront of the current AI boom alongside other tech giants. SMCI recently announced it will add three new manufacturing facilities in Silicon Valley, anticipating further growth in the sector. 

For FY'23, the company reported impressive revenue growth, up 37% to $7.12 billion against FY'22's $5.20 billion. Meanwhile, net income per diluted share doubled from $5.32 to $11.43. This massive improvement 'validates our global leadership position in AI-accelerated compute platforms,' says Charles Liang, President and CEO. The FY'24 report will soon be released as investors eagerly anticipate the results. 

SMCI stock has a strong buy rating based on 8 analysts. Its high target price of $1,500 represents a massive 77% potential upside. Truly, SMCI is well-positioned to become one of the fastest-growing AI stocks today. QuickLogic Corporation (QUIK) One of the leading providers of open reconfigurable computing solutions, QuickLogic Corporation (NASDAQ QUIK) specializes in fabless semiconductor manufacturing for ultra-low powered semiconductors. The company has continued to announce major catalysts that help drive positive sentiments from investors, including its partnership with Zero-Error Systems America for space applications, the Aurora 2.6 eFPGA User Tool Suite release, and a six-figure license agreement for subsidiary SensiML. QuickLogic reported 31% YOY revenue growth in FY'23.

 The report also outlined 146% total revenue growth across three years from 2020, when it launched its IP business model. While the year ended in a 2-cent loss, it is still a vast improvement from FY'22's 34-cent loss per share. The company's upward trajectory spells potential reversal in the future, a sentiment expressed by CEO Brian Faith. 

'With the expansion of our customer base and end markets that we anticipate this year,' Faith says, 'we expect our growth trend and profitability to continue in 2024 and beyond.' This optimism further cements the strong buy rating from analysts, which outlines a 56% potential upside based on the current high target price of $16. Lattice Semiconductor Corporation (LSCC) Being at the forefront of low-power FPGA solutions development has made Lattice Semiconductor Corporation (NASDAQ LSCC) the leader in the field. The company has focused on solutions that cater to 'big data,' like cloud computing edge and AI.

 Recently, it announced new products that cater to the evolving security needs of the market, like the MachXO5D sdash;-NX secure control FPGAs. In addition, Lattice has also shared its 3D sensor fusion reference design, which aims to help develop autonomous applications. Lattice Semiconductor's revenue was up an impressive 11.6% in FY'23 despite 'near-term cyclical headwinds,' said CEO and President Jim Anderson. Meanwhile, net income increased by 44.8% YOY. This excellent performance mirrors Wall Street's strong buy rating for LSCC stock. Analysts give it a high target price of $88, representing a 43% potential upside.

FAQS:

Q: What is the main criterion for selecting AI stocks?

A: A strong buy rating from analysts, positive earnings and revenue year-over-year (YOY) growth, and potential upsides exceeding 40%.

Q: What is Super Micro Computer's (SMCI) potential upside based on analysts' high target price?

A: 77%

Q: What is QuickLogic Corporation's (QUIK) reported revenue growth in FY'23?

A: 31%

Q: What is Lattice Semiconductor Corporation's (LSCC) reported revenue growth in FY'23?

A: 11.6%

Q: What is the industry that Lattice Semiconductor Corporation focuses on?

A: Low-power FPGA solutions development

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