The current situation of the stock market shows a sharp decline, causing widespread anxiety among investors due to concerns about a recession.
Despite this negative trend, there may be an opportunity to capitalize strategically on the downturn, especially within the realm of artificial intelligence (AI).
Given the rapid advancements in AI technology and the projected growth of the AI market from $214.6 billion in 2024 to $1.34 trillion by 2030, investing in AI-related stocks at this moment could lead to significant long-term profits.
A thorough examination of economic indicators like the increasing GDP and anticipated rate cuts by the Federal Reserve paints a more resilient picture amid recession fears. In light of this, Finbold has meticulously scrutinized ongoing trends and identified two prime investment prospects within the prevailing artificial intelligence momentum.
Micron Technology Inc. (NASDAQ: MU) stock
Amid the current market conditions, Micron Technology (NASDAQ: MU) emerges as a robust option for investment. The company, a frontrunner in memory and storage solutions, is making significant progress in high-bandwidth memory (HBM) production.
These initiatives are poised to drive notable revenue growth, with forecasts indicating billions in sales by fiscal 2025 compared to hundreds of millions in 2024.
Micron’s extensive market presence, spanning personal computers, mobile devices, automotive industry, industrial sector, and data centers, positions it favorably to capitalize on the increased utilization of AI-driven devices.
Market analysts anticipate a substantial upturn in Micron’s earnings for fiscal 2024, with an anticipated surge of 687% in earnings per share (EPS) and a 54% rise in sales. Despite a recent dip below its 200-day moving average, the stock has still gained 8.5% this year.
With a market capitalization of $113.7 billion, Micron is scheduled to unveil its Q4 earnings results on September 25. Analysts predict a profit of $0.97 per share, a remarkable improvement from a loss of $1.21 per share a year earlier.
The collective view of analysts remains predominantly positive, with a “Strong Buy” rating and an average target price of $169.04, hinting at a potential increase of 86.95%.
Dell Technologies (NYSE: DELL) stock
Dell (NYSE: DELL) is currently undergoing a restructuring process to streamline its operations and intensify its concentration on artificial intelligence.
Part of this reorganization involves establishing a new division focused on AI products and services. Despite recent fluctuations in stock prices, Dell has attracted renewed investor attention owing to its robust servers capable of handling AI workloads.
Dell’s strategic alliances and emphasis on AI innovations position it favorably for future expansion. For example, its partnership with Nvidia (NASDAQ: NVDA) on the upcoming Blackwell chip and its engagement in Elon Musk’s xAI data center project in Austin showcase its promising potential in the AI market.
In the first quarter of fiscal 2025, Dell registered $22.2 billion in revenue, a 6% increase compared to the previous year. Nevertheless, operating income declined by 14% to $920 million, and adjusted diluted EPS dropped by 3% to $1.27.
Despite these hurdles, Dell experienced a 30% growth in its backlog of AI-optimized servers, totaling $3.8 billion, indicating strong demand. Currently trading around $108, down from its peak of $179.70, Dell’s stock has still delivered a 40% return since the beginning of the year.
Analysts present a predominantly positive outlook, giving a “Strong Buy” rating and an average target price of $158.5, suggesting a potential increase of 61.4%.
In the current volatile market environment, both Micron Technology and Dell Technologies offer appealing prospects for investors.
Their strong foothold in the AI sector, combined with strategic investments and robust market demand, make them enticing options amidst the prevailing winds of artificial intelligence.
Image Source: khunkornStudio / Shutterstock
