With December nearing its end, 2024 is about to disappear from the calendar. It’s been an absolutely wonderful run of performance for the market as a whole and for fintech companies, including NVIDIA, Palantirand Apple have soared to new valuation highs.
But there are also some big tech stocks that are trading well below previous price highs, and investors could be doing themselves a disservice by overlooking these big companies.
If you’re looking for investments that can deliver big gains in 2025 and beyond, read on to see why two Fool.com contributors think these weakened stocks are great buys right now.
Keith Noonan: Advanced Microdevices (NASDAQ:AMD) is a designer of central processing units (CPUs) and GPUs for personal computers and data centers. The company’s shares have risen about 182% over the past five years thanks to strong business execution and enthusiasm that the company could be poised to see some of the same explosive AI-driven growth that has propelled Nvidia to get stellar returns.
On the other hand, AMD has seen a slower rise than some investors expected for AI-related processors, and the disconnect in the timeline has caused a significant pullback in the stock’s valuation. The chip specialist’s share price is down about 40% from the all-time high it reached earlier this year.
Despite a strong rally in the broader market, AMD stock has plummeted in recent months, and the company’s stock price has yet to recover from the sell-off sparked by the release of its Q3 results. third quarter at the end of October. AMD’s revenue grew about 18% year over year to $6.8 billion in the period. Meanwhile, non-GAAP (adjusted) earnings per share increased 31% compared to the prior-year period.
While AMD will continue to have a strong presence in the PC and gaming processor market, it’s the data center segment that has really become central to the stock’s performance. In the latest quarter, AI-related segment sales increased to $3.5 billion, up 122% year over year and 25% quarterly sequentially. The performance actually surpassed Wall Street expectations and propelled the company to beat overall sales and earnings in the quarter, but some investors and analysts didn’t think the company’s guidance was optimistic enough.
AMD has tended to err on the side of conservative lately when it comes to issuing guidance, and it wouldn’t be surprising to see significant near-term gains kicked off by fourth-quarter numbers that turn out better than expected. But most importantly for long-term investors, the company remains poised to benefit from the unfolding AI revolution.
The company’s competitive positioning in the highly lucrative GPU category is not as strong as Nvidia’s, but AMD’s sluggish stock performance opens the door for investors who buy shares at current prices to make big gains.
Lee Samaha: It’s fair to say it hasn’t been a great year for the supplier of burn-in test equipment to the chip industry. Aehr Test Systems(NASDAQ: AEHR) manufactures silicon carbide chip testing equipment and its main growth market comes from its use in electric vehicles (EV). Silicon carbide chips have qualities that make them more efficient than silicon in power electronics, making them ideal for electric vehicles.
There is no doubt that the adoption of silicon carbide chips will grow, driving demand for Aehr’s solutions. However, growth expectations for both Aehr’s chips and sales have been lowered this year due to slowing electric vehicle sales growth, causing automakers to defer investment in production lines. production. As a result, the company’s share price is down approximately 72% from its all-time high at the time of writing.
Still, the slowdown – mainly related to relatively high interest rates – is unlikely to last forever, and no one disputes that electric vehicles are the future of the transportation industry. Additionally, Aehr recently signed a deal to sell initial equipment worth $10 million to an AI customer. The deal helps diversify Aehr’s end markets and customer base and de-risks the stock.
With the company successfully opening new end markets and a likely recovery in its electric vehicle end markets, Aehr Test Systems has a lot of potential to grow. Now could be an opportune time to buy shares.
Have you ever felt like you missed the boat when buying the hottest stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double bet” actions recommendation for companies that believe they are about to explode. If you’re worried you’ve missed an opportunity to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
NVIDIA:If you invested $1,000 when we doubled down in 2009,you would have $362,841!*
Apple: If you invested $1,000 when we doubled down in 2008, you would have $49,054!*
netflix: If you invested $1,000 when we doubled down in 2004, you would have $498,381!*
Right now, we are issuing “double bet” alerts for three incredible companies and there may not be another opportunity like this anytime soon.
See 3 “double bet” actions »
*Stock Advisor returns from December 23, 2024
Keith Noonan has no position in any of the stocks mentioned. Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions and recommends Advanced Micro Devices, Apple, Nvidia, and Palantir Technologies. The Motley Fool has a disclosure policy.
2 Stocks Down 40% and 72% to Buy Right Now originally posted by The Motley Fool
