PLAYING THE AI GAME: TWO STOCKS TO WATCH
Artificial intelligence has been all the rage this year, with investors flocking to AI-related stocks like moths to a flame. But hold on to your hats, folks, not all AI-related stocks are out of reach! According to Morningstar’s chief U.S. market strategist, Dave Sekera, there are still two stocks that are worth a second look. And they might just surprise you!
**SECOND DERIVATIVE PLAYS ON AI**
Sekera has thrown the spotlight on two U.S. stocks that he believes are flying under the radar. The first is IT services and consulting firm Cognizant Technology, which is trading at a cool 24% discount to Morningstar’s fair value estimate. Cognizant provides services to companies looking to adopt AI, and its shares have jumped 24% this year. Sekera thinks that many companies simply don’t have the expertise or financial resources to build their own AI, and that’s where Cognizant comes in.
The other stock that’s been blessed by Sekera is cloud company Snowflake. Hailed as a “long-term tailwind” by Sekera, Snowflake is currently trading at an 18% discount to Morningstar’s fair value estimate. The company specializes in the data center area, and Sekera believes that people are going to need Snowflake on the data side to train their AI models. Its shares have seen a solid 30% increase this year.
**THE BULLS AND THE UPGRADES**
But wait, there’s more! Sekera isn’t the only one who’s bullish on these two stocks. In late October, Citi upgraded Cognizant from neutral to a buy rating and raised its price target from $70 to $80. And as for Snowflake, Barclays recently raised its price target for the stock from $183 to $198 in a late November note.
So, there you have it, folks! The great AI stock rush isn’t over just yet, and there may be some hidden gems out there waiting for you to discover. What do you think about these second derivative plays on AI? Are Cognizant and Snowflake on your list of stocks to watch? Let us know in the comments below!
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