Discover a Decade’s Best AI Investment: Buy These 2 Untapped Stocks
Artificial intelligence (AI) is poised to be the most impactful technology since the internet, drastically altering the global economy. This transformation mirrors the internet boom of the late 1990s, which opened up vast opportunities for investors and birthed major companies like Alphabet and Netflix. As the AI revolution unfolds, two companies stand out for potential investment: Amazon and Pure Storage.
Amazon: A Leader in AI Integration
Amazon operates at the forefront of three significant industries: e-commerce, advertising, and cloud computing. It is the largest online marketplace in North America and Western Europe, the leading retail advertiser globally, and the top provider of cloud computing services.
AI is integral to Amazon’s growth strategies across these sectors. The company has implemented over 1,000 generative AI applications that enhance tasks such as inventory management, demand forecasting, and customer service. In advertising, Amazon’s AI tools empower brands to create innovative audio, images, and videos. Additionally, the company has developed proprietary AI chips and launched new services like Bedrock, aimed at accelerating generative AI applications.
Wall Street Expectations
Analysts predict Amazon’s earnings will grow by 18% annually over the next three years. With its current price-to-earnings ratio at 33, this valuation appears justifiable. Morgan Stanley identifies Amazon’s retail segment as potentially the most undervalued aspect benefitting from generative AI advancements, making it an attractive stock for investors.
Pure Storage: Innovating Data Management
Pure Storage is a key player in the enterprise flash storage market. The company specializes in all-flash storage systems that help businesses manage their data efficiently across public and private clouds. Its proprietary DirectFlash technology significantly enhances storage density while reducing power consumption compared to traditional solid-state drives.
Pure Storage has gained recognition for its Evergreen architecture, which allows clients to upgrade their storage solutions without downtime. Industry analysts have ranked the company as a leader in several data storage categories due to the performance and efficiency of its FlashBlade systems.
Financial Performance and Growth Potential
The company recently reported strong financial results, exceeding expectations on both revenue and profit. Following this report, management raised its full-year guidance. Despite a subsequent 27% drop in stock price—attributed to stretched valuations and concerns over future profit margins—the potential for growth remains. Analysts project an adjusted earnings increase of 30% annually until May 2027, positioning Pure Storage favorably with a median target price of $100, translating to a potential 45% upside from its current valuation.
- Amazon (NASDAQ: AMZN)
- Market largest in North America and Western Europe
- Generative AI at core of strategies
- Earnings expected to grow 18% annually
- Pure Storage (NYSE: PSTG)
- Leader in enterprise flash storage
- Innovative DirectFlash technology
- Projected earnings growth of 30% annually
Investors considering AI opportunities should evaluate both Amazon and Pure Storage. Each company leverages AI technologies to drive growth and enhance operational efficiencies, making them promising candidates for investment in this evolving technological landscape.
