According to an article published in InvestorPlace, there are three AI stocks that offer potential for substantial gains in 2024. These stocks are UiPath, Cerence, and Lantheus.
The article argues that while AI-related companies experienced significant growth in 2023, the mainstream players in the industry may not have much room left for continued high returns in 2024 due to their nosebleed valuations. Instead, the article suggests that more specialized AI niches, such as robotics and narrow AI applications, could provide lucrative opportunities.
Here is a breakdown of the key elements of the article:
1. UiPath (PATH)
- UiPath is an under-the-radar robotics software company that builds automation software to deploy robots for repetitive and dangerous jobs.
- The company can capitalize on the long-term trend of automating blue-collar work, providing ample growth potential.
- Despite trading at a premium, UiPath’s forward P/E ratio drops to only 30x based on 2028 projections.
- The company has already surpassed earnings estimates by over 120% and offers a cutting-edge way to play AI’s infiltration into the physical economy.
2. Cerence (CRNC)
- Cerence focuses on conversational AI and natural language understanding, powering intelligent assistants and bots.
- Despite the vast long-term potential, Cerence trades at a low forward earnings multiple and operates in the black already.
- The company should see tailwinds as demand for conversational AI increases alongside advances in machine learning.
- Wall Street fails to appreciate Cerence’s strong underlying fundamentals.
3. Lantheus (LNTH)
- Lantheus provides AI tools to help clinicians improve patient outcomes, including imaging agents and an AI platform.
- The company is valued more like a value stock than a high-growth AI disruptor, trading at just 11x forward earnings.
- Lantheus’s offerings should unlock substantial efficiency and quality gains as AI integration accelerates across healthcare.
- The risk-reward for Lantheus looks compelling at current levels.
In conclusion, the article highlights the potential for significant gains in AI stocks in 2024, particularly in specialized niches such as robotics and conversational AI. The three stocks mentioned in the article, UiPath, Cerence, and Lantheus, are presented as attractive options for investors seeking exposure to the AI industry.