13 AI stocks you should have in your portfolio

Nvidia is very popular among top portfolio managers. However, despite its extraordinary performance, it is not the most popular technology company globally among institutional investors.

There are 13 companies more popular among major investors, though none of these come close to the 197% total return that Nvidia shares have seen over the past 12 months.

One of Nvidia’s 13 most popular technology stocks, Qualcomm (US: QCOM), is also a US chipmaker. Qualcomm is a leader in cutting-edge smartphone chips and could benefit from the wave of AI investment that Nvidia has helped unleash.

Qualcomm hopes to become a key supplier of chips for AI-enabled devices. Nvidia’s chips are mostly used in data centers rather than in phones, tablets, and personal computers (PCs).

Qualcomm has ambitions to use the hardware revisions needed to make AI work on devices to become a major player in PCs, a market it has always wanted to enter.

Five of the Magnificent 7 members rank above Nvidia based on their level of institutional investor support. In order of popularity, these are Alphabet (US: GOOGL), Microsoft (US: MSFT), Meta (US: META), Apple (US: AAPL), and Amazon (US: AMZN).

The most popular tech stock globally for investors is Korean memory chip and smartphone giant Samsung Electronics (KR: 005930). It has struggled in recent years but could be poised to bounce back if spending on AI reinvigorates demand for memory and triggers a smartphone upgrade cycle.

Asian information technology services giants FPT (VN: FPT) and Infosys (IN:500209) also boast more investor interest than Nvidia, as do two of the country’s top semiconductor manufacturing companies. region: Taiwan Semiconductor Manufacturing (TW:2330) and packaging and testing specialist ASE Technology (TW:3711).

The only European tech company that ranks above Nvidia is Dutch semiconductor equipment maker ASML (NL: ASML).

ASML has clear leadership in providing the incredibly complex etching machines needed to produce the world’s most advanced chips. It’s also the only one of the 13 companies with a valuation approaching that of Nvidia.

At the other end of the valuation spectrum is Chinese e-commerce and cloud computing giant Alibaba (HK:9988).

Why is this institutional investor favorite trading at just nine times expected earnings? The reasons are multiple. It faces challenges from state intervention, US restrictions on cutting-edge technology, and disruptive competition from ’factory gate to customer door’ retailers, such as Shein and Temu.

Name	Expected P/E	ROIC	2-Year EPS CAGR Expected
Samsung Elec. (KR:005930)	13	4.1%	45%
Alphabet (US:GOOGL)	24	25%	17%
TSMC (TW:2330)	22	20%	24%
Microsoft (US:MSFT)	35	28%	15%
Meta (US:META)	25	23%	19%
FPT (VN:FPT)	25	25%	24%
Apple (US:AAPL)	32	59%	10%
Infosys (IN:500209)	25	30%	7%
Amazon (US:AMZN)	38	10%	33%
Alibaba (HK:9988)	9	6.7%	5%
ASML (NL:ASML)	40	51%	30%
Qualcomm (US:QCOM)	19	21%	13%
ASE Tech. (TW:3711)	16	7.4%	31%
Nvidia (US:NVDA)	41	70%	43%

Source: FactSet, as of July 8, 2024. Based on forecasts for the next 12 months. EPS = earnings per share. CAGR = compound annual growth rate.

|DISCLAIMER
The information and considerations in this article should not be used as the sole or primary basis for making investment decisions. The reader maintains full freedom in his own investment choices and full responsibility in making them, since he alone knows his risk propensity and his time horizon. The information contained in the article is provided for informational purposes only and its disclosure does not constitute and should not be considered an offer or solicitation to the public for savings.|

Original article published on Money.it Italy 2024-08-09 15:30:00. Original title: Se investi nell’intelligenza artificiale, ci sono 13 azioni che dovresti avere in portafoglio