2 Under The Radar AI Stocks Worth a Look

The AI Frenzy continues to dominate headlines, with the trend undoubtedly going nowhere anytime soon. It’s reasonable to understand why are so many bullish on the development, regularly compared to the internet boom in the early 2000’s.

But outside of NVIDIA NVDA, there are several lesser-known plays on the AI Frenzy, a list that includes Credo Technology CRDO and Comfort Systems USA FIX. Let’s take a closer look at each.

Credo Sees Growth Surge

Credo Technology provides innovative, secure, high-speed connectivity solutions that deliver improved power efficiency as data rates and corresponding bandwidth requirements increase exponentially throughout the data infrastructure market.

The company’s EPS outlook remains bullish nearly across the board, with analysts raising expectations following its latest release.

Credo’s latest set of quarterly results was fueled by continued strong demand for its services, with the company a big beneficiary of the AI frenzy. CRDO crushed our consensus expectations, with sales up a staggering 180% year-over-year. Below is a chart illustrating the company’s sales on a quarterly basis, with the acceleration visibly seen over the past few periods.

FIX Enjoys Bullish Outlook

FIX shares represent a nice opportunity to obtain exposure to the AI infrastructure buildout thanks to its products utilized in data centers, which reflect a massive tailwind for the near and long-term picture for the stock.

The stock sports the highly-coveted Zacks Rank #1 (Strong Buy), with EPS revisions moving higher across the board.

Sales of $2.2 billion and adjusted EPS of $6.53 in its latest release crushed our consensus estimates, reflecting growth rates of 20% and 75%, respectively. As shown below, FIX’s sales growth has been stellar, underpinned by a growing backlog.

Bottom Line

We won’t be escaping the AI frenzy anytime soon, with many companies benefiting nicely from the demand.

Though NVIDIA NVDA and other recognizable names have been the typical AI ‘targets’, both stocks above – Comfort Systems USA FIX and Credo Technology CRDO – reflect lesser-known plays on the trade. 

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This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research