We’ve all become accustomed to the artificial intelligence (AI) theme, with many investors clamoring for exposure. And the results we’ve received from several companies have helped confirm the positivity surrounding the theme, further exciting investors.
Thankfully, there are several angles investors can use to obtain exposure, such as Nvidia NVDA for the hardware side, Vertiv VRT for data center services, and Palantir PLTR for the software angle. Let’s take a closer look at each.
NVDA Remains Clear AI Favorite
Nvidia shares have finally taken a breather over the last three months, essentially flat compared to the S&P 500’s 4% gain. Shares didn’t see a melt-up following its latest release like previously, though results were again remarkable.
The company maintains a notably bright outlook across the board, undoubtedly constructive for share performance moving forward despite the recent sideways action. Remember that NVDA is one of the ‘late’ reporters during earnings season, with its next release scheduled for November 19th.
Image Source: Zacks Investment Research
Concerning its latest quarterly release, the AI favorite generated record quarterly sales of $30 billion, reflecting an impressive 122% year-over-year climb. As usual, Data Center results reflected the main event, with a quarterly sales record of $26.3 billion up 150% on a year-over-year stack.
And despite its strong run, the valuation picture here remains attractive, with the current 36.2X forward 12-month earnings multiple comparing favorably to the 50.7X five-year median. The current PEG works out to 0.8X, reflective of both growth and value.
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Vertiv Keeps Data Centers Cool
Vertiv provides services for data centers, communication networks, and commercial and industrial facilities with a portfolio of power, cooling, and IT infrastructure solutions and services. The outlook for its current fiscal year continues to be rosy, with the $2.59 Zacks Consensus EPS estimate up 32% over the last year and suggesting 45% Y/Y growth.
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The company’s latest set of results came in strong, with VRT enjoying 57% year-over-year growth in organic orders alongside a 13% sales increase. Due to the momentum it's currently enjoying, Vertiv upped its current year sales, operating profit, and adjusted free cash flow outlook following the print.
Below is a chart illustrating the company’s sales on a quarterly basis.
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The company has continued to see increasing scaling of AI deployment, also boasting the capacity needed to capture the massive opportunity.
Palantir Sees Customer Momentum
Palantir builds software that empowers organizations toeffectively integrate their data, decisions, and operations. The stock maintains a bullish outlook across the board, with analysts revising their earnings expectations well higher over recent months.
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Its latest quarterly release brought post-earnings positivity, exceeding both earnings and revenue expectations while also lifting its current-year sales outlook. Revenue soared 27% year-over-year, whereas adjusted EPS climbed 200%.
The company’s platform continues to be highly attractive, reflected by 41% year-over-year customer growth. Impressively, PLTR closed over 27 deals worth $10 million throughout the period, further reflecting snowballing demand.
‘Our growth across the commercial and government markets has been driven by an unrelenting wave of demand from customers for artificial intelligence systems that go beyond the merely performative and academic,’ said Alexander Carp, CEO, in a letter to shareholders.
The company’s top line has remained notably strong, as shown below.
Image Source: Zacks Investment Research
Bottom Line
The artificial intelligence (AI) theme continues to grip investors, causing many to seek exposure.
Investors can play the trade through several angles, including Nvidia NVDA for the hardware side, Vertiv VRT for data center services, and Palantir PLTR for the software angle.
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Today, See These 5 Potential Home Runs >>NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Vertiv Holdings Co. (VRT) : Free Stock Analysis Report
Palantir Technologies Inc. (PLTR) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
