The 3 Most Undervalued AI Stocks to Buy in July 2024

Industry Overview - The artificial intelligence (AI) industry is projected to maintain a compounded annual growth rate of 28.46% until 2030, with a market size of $184.0 billion in 2023 [1] - The United States is expected to be the largest market during the AI boom [1] - Many investors are turning to the stock market to capitalize on the AI growth opportunities [1] Alphabet (GOOG, GOOGL) - Alphabet has been utilizing AI to enhance its search engine and cloud platform, recently launching Gemini [2] - The company has a valuation above$2 trillion, with shares up 38% year-to-date and more than tripling over the past five years [2] - Alphabet's net income increased by 57% year-over-year in Q1, while revenue rose by 15% year-over-year [2] - The stock trades at a 30 P/E ratio, which is considered reasonable given its financial performance [2] - Analysts believe Alphabet will benefit from increased business adoption of Google Cloud, driving the stock higher [3] Qualcomm (QCOM) - Qualcomm shares are up 47% year-to-date and have gained 168% over the past five years [4] - The company offers a 1.65% yield and trades at a 28 P/E ratio, having raised its dividend by 6.25% this year [5] - In Q2 of fiscal 2024, Qualcomm reported a 1% year-over-year revenue increase and a 37% jump in net income [5] - The company is focusing on on-device AI capabilities, which is expected to enhance financial results [5] - Qualcomm returned $1.6 billion to shareholders through buybacks and dividends, with a Moderate Buy rating and a price target of$270 per share implying a 31% upside [5] Meta Platforms (META) - Meta Platforms uses AI to enhance user engagement on its social media platforms, driving advertising revenue [6] - The company reported a 27% year-over-year revenue growth in Q1 2024, with net income growing by 117% [6] - Meta has a net profit margin of 33.9% and boasts 3.24 billion daily active users, providing a strong foundation for AI initiatives [6] - The stock is rated as a Strong Buy, with a price target of $600 per share implying an 11% upside [7]