11 AI Stocks to Buy on Dips: 'Don't Waste a Good Sell-Off,' Analyst Says
Investors are paying near five-year-high premiums for toothpaste, cereal and drug stocks. At the same time, they are selling the companies building artificial intelligence at a market discount . HSBC’s U.S. equity strategy team, in a research note titled, “Don’t waste a good sell-off,” named 11 Buy-rated stocks that have been hit as the AI trade unwinds. The list runs from Alphabet Inc.…
HSBC’s U.S. equity strategy team identified 11 AI stocks to buy on dips, suggesting investors should not miss out on potential gains by selling off these companies, according to a research note titled, “Don’t waste a good sell-off.” The list includes Alphabet Inc. (GOOGL), Oracle Corp. (ORCL), and data center powerhouses like GE Vernova (GEV), Vertiv Holdings (VRT), and Bloom Energy (BE).
These companies have seen their stocks fall as the AI trade unwinds, but the analysts argue that the correction has been overdone, particularly in these oversold sub-sectors.
Oracle, in particular, stands out with a target price of $316, nearly 149% higher than its current trading price of $127.11. The company reported $664 billion in remaining performance obligations, indicating strong future revenue potential. GE Vernova and Vertiv have also shown resilience, with turbine prices up more than 50% and third-quarter organic orders doubling for Vertiv. Bloom Energy’s revenue surged 145% in the first nine months of the year, driven by deals with Google and initial commitments from Oracle.
Other companies in the list include Applied Materials, Vertiv Holdings, GE Vernova, Citigroup, Freeport-McMoRan, Sempra, NextEra Energy, and Alphabet. HSBC expects robust U.S. power demand growth over the next decade, with investments in copper, gold, electricity, and renewable energy sources. Overall, the bank believes the market has undervalued these AI-related stocks, presenting a buying opportunity as they recover from recent price drops.
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