Here are the 3 Best Artificial Intelligence (AI) Stocks to buy in July 2024, according to Wall Street analysts. These stocks command a Strong Buy consensus rating and are expected to deliver impressive upside in the next twelve months. We used TipRanks’ Stock Comparison Tool for Artificial Intelligence Stocks to select these three AI companies.
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The AI world is evolving faster than one can foresee. In addition to the technology sector, companies in varying industries are finding greater adoption of AI to smoothen their operations and customer experience.
Companies that leverage AI to bolster their product offerings and operating efficiency have a solid potential to outperform expectations. At the same time, companies that manufacture components, chips, hardware, or software that enable AI functioning are gaining a solid foothold. Let’s dive into the three AI companies that have won analysts’ favor.
#1 Precision Drilling Corp. (NYSE:PDS) (TSE:PD)
Calgary-based Precision Drilling Corp. is part of the Energy sector. The company provides onshore drilling, completion, and production services to oil and gas companies. By harnessing the power of AI, automated technology, and smart algorithms, Precision Drilling’s Alpha suite of technologies helps drillers and explorers save time, decrease well construction costs, and reduce risk. As of June 30, PDS had active rig counts of 64 in Canada, 36 in the U.S., and eight in International locations.
PDS is set to release its Q2 FY24 results later this month. The Street expects PDS to post earnings per share (EPS) of $0.42 on revenues of $311.55 million. In the prior-year period, Precision Drilling reported EPS of $1.20 on revenues of $313.52 million.
For Fiscal 2024, PDS expects to reduce the total debt by C$150 to C$200 million. Meanwhile, the company expects to assign roughly 25%-35% of its free cash flow toward share buybacks, bringing the total capital returns ratio to 50%.
Is Precision Drilling a Good Buy?
With seven unanimous Buy recommendations, PDS stock has a Strong Buy consensus rating on TipRanks. The average Precision Drilling price target of $94.02 implies 33.7% upside potential from current levels. In the past year, PDS shares have gained over 42%.
#2 AeroVironment, Inc. (NASDAQ:AVAV)
California-based AeroVironment designs and develops unmanned aircraft systems (UAS), unmanned ground vehicles (UGV), loitering munition systems (LMS), and high-altitude pseudo-satellites (HAPS). AVAV is a major supplier to governments, defense sector, as well as commercial customers. The company uses AI, robotics, sensors, software analytics, and connectivity to develop its state-of-the-art technological solutions.
Despite reporting better-than-expected results for Q4 FY24, AVAV shares plunged as adjusted EPS dropped by nearly 57% and the funded backlog weakened. Meanwhile, revenues jumped by 6% year-over-year to $196.98 million in Q4 and the company’s full-year Fiscal 2025 guidance came in line with analysts’ expectations.
AeroVironment continues to develop advanced autonomous technologies for its customers. However, most of its work remains classified as it manufactures defense and military warfare systems.
Is AVAV a Good Buy?
On TipRanks, AVAV stock has a Strong Buy consensus rating backed by three unanimous Buys. The average AeroVironment price target of $228.33 implies 25.4% upside potential from current levels. Notably, in the past year, AVAV shares have zoomed nearly 80%.
#3 Micron Technology (NASDAQ:MU)
Idaho-based Micron is one of the biggest beneficiaries of the AI wave. The company is a leader in innovative memory solutions and data storage systems that have a broad array of applications. Micron offers a solid AI-related product portfolio that includes High-Bandwidth Memory (HBM), Data Center SSD (Solid State Drive) storage, and other offerings within DRAM (Dynamic Random Access Memory) and NAND (Not AND).
The chipmaker exceeded both revenue and adjusted EPS estimates for Q3 FY24. However, reports suggest that Micron’s unambitious forecast for the fourth quarter disappointed investors, leading to a sell-off in MU stock. Although the projections came in line with analysts’ estimates, shareholders were probably expecting extraordinary projections driven by solid AI demand. The company noted in its Q3 release that nearly 50% of the sequential data center revenue growth was aided by AI demand.
What is the Price Target for MU?
On TipRanks, the average Micron Technology price target of $161.12 implies 22.5% upside potential from current levels. Also, MU stock has a Strong Buy consensus rating based on 25 Buys and two Hold ratings. In the past year, MU shares have zoomed over 107%.
Key Thoughts
Picking the top AI stocks can be a tedious task. The above three AI stocks are the best-rated according to analysts, who expect considerable share price appreciation potential. Moreover, all three stocks have earned a TipRanks Smart Score of eight or nine, implying that they are most likely to outperform expectations. Investors can choose to invest in them to boost their portfolio returns after thorough research.
