2 AI Stocks Currently Deemed Undervalued

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Introduction

Check out the thrilling rise of AI stocks! Over the past year, these stocks have soared as investors bet big on the future of this game-changing technology. Generative AI, in particular, is capturing hearts and minds just like it did when AI first made waves in the market. But here's the real kicker: AI is on a rocket ship to exponential growth. Even if some of the top stocks hit a speed bump, the tech powering them is only getting better and better. So, why wait? Dive into the AI revolution and ride the wave of innovation!

Value investors should stick with the best-in-class undervalued AI stocks, many of which may not be all that expensive.

1. Salesforce

Hey there! Let's talk about a tech giant that's not getting the props it deserves for its cool AI tech. Salesforce, known on the stock market as CRM, is like that genius kid in class who's super low-key. Even after some buzz about buying another company fell through, Salesforce's stock price is looking like a sweet deal at just under $280—down about 12% from its high in March.

So, why should you care? Well, Salesforce is sitting pretty well in the AI game, and it's got a leg up on the competition that's worth noticing. In the not-so-distant future, AI will be the BFF for businesses wanting to keep their customers happy. Salesforce is already ahead of the curve, using AI to make sure businesses can chat with their customers like never before. This isn't just cool; it's smart business. Companies using AI in their customer journey have seen customer satisfaction jump by up to 20%.

Salesforce is all about adding more AI to what it offers, and that's going to make customers stick around and even spend more. It's like when your favourite gaming app drops a new feature, and you're all in.

The Numbers Game

Now, let's talk money. Salesforce's forward P/E ratio is 28.5, which might sound like gibberish, but it means the stock is kind of undervalued. Especially when you compare it to the big dogs in tech that are worth trillions. Salesforce is keeping pace with the AI giants without breaking a sweat.

So, what's the takeaway? Salesforce is the dark horse you might want to bet on. They're making AI moves that could change the game, and that's something worth watching🌟

2. IBM

Let's talk about IBM and AI – it's like the latest season of your favourite show, and things are getting interesting. It soared to epic heights thanks to its AI glow-up, but recently, it's been more rollercoaster than rocket ship. After a bit of a stumble with revenue and a massive $6.4 billion buyout of HashiCorp, investors gave IBM the side-eye. But now, with shares down 11% from their March high, it's looking like a deal too good to pass up.

Now, let's chat about Watsonx, IBM's brainy AI. It's like the smart kid in class who's just a few years shy of full genius mode. IBM's been in a bit of a snooze, but with AI, it's stretching and ready to sprint. And guess what? AI isn't just a buzzword; it's a game-changer.

AI in customer service is like having a super-helpful buddy online 24/7. It's boosting satisfaction levels through the roof! In fact, 73% of shoppers think AI could make their experience better. And businesses? They're seeing happier customers and fatter wallets. AI could add a whopping $1 trillion of value each year just in banking.

So, IBM might not be the first out of the gate compared to other AI hotshots, but it's pacing for a marathon, not a sprint. With a forward P/E of 16.5, IBM is waving at you, value investors, saying, "Hey, want a piece of this AI action?" It's not just about the tech; it's about snagging a slice of the future on the cheap.

So, what do you say? Ready to bet on IBM's AI-powered comeback?

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Conclusion

In conclusion, the surge in AI stocks over the past year reflects investors' eagerness to capitalize on the transformative potential of this cutting-edge technology. Generative AI, in particular, retains its significance, echoing the enthusiasm seen during the initial AI stock boom. However, what sets AI apart is its capacity for exponential improvement over time. Despite fluctuations in the stock prices of leading innovators, the underlying technology continues to advance steadily. This underscores the enduring promise of AI and highlights the long-term opportunities it presents for investors seeking to ride the wave of technological progress.