semiconductor company Nvidia (NASDAQ:NVDA) It was the best performing stock among the S&P500 last year. The stock price soared 239% as investors added the stock to their portfolios in anticipation of a boom in artificial intelligence (AI) spending. The buying spree continued in earnest this year, with Nvidia's stock price rising another 50%.
There are still many reasons to own Nvidia. The company not only dominates the market for machine learning processors, but also participates in other parts of the AI ​​economy, including networking equipment, subscription software, and cloud services. But Wall Street now thinks things are headed in a better direction. Amazon (NASDAQ:AMZN) and Docebo (NASDAQ:DCBO)detailed below in the consensus target price.
-
Nvidia: $709.73 per share (3% implied downside)
-
Amazon: $207.92 per share (suggesting 23% upside)
-
Docebo: $59.50 per share (30% upside potential)
The smartest way to benefit from AI is to buy a basket of stocks. Here's why investors should consider including Amazon and Docebo in their AI basket.
1. Amazon
Amazon is a multifaceted company with attractive growth prospects in e-commerce, digital advertising, and cloud computing. The company operates the world's most popular online marketplace, measured by monthly visitors, and continues to gain revenue share in North America and Western Europe. moreover, alibaba Currently leading the market in terms of total sales, morgan stanley He expects Amazon to replace the company by 2027.
Based on that, Amazon's retail strength evolved into a booming advertising business. Our unparalleled ability to connect shoppers with source data helps media buyers reach consumers with relevant campaigns. As a result, Amazon has steadily increased its share of digital ad spending over the past few years, becoming the No. 3 ad technology company. alphabet and meta platform I lost my position. Insider Intelligence analysts expect similar results in the future.
Finally, Amazon Web Services (AWS) is a leader in cloud infrastructure and platform services.31% market share in Q4 easily surpassed microsoftAccording to Synergy Research Group, the company has a market share of 24% and Alphabet's market share is 11%. That alone makes him say AWS is likely to benefit from AI, since cloud infrastructure is often the easiest way to run AI applications.
However, consulting gartner AWS is also a recognized leader in artificial intelligence developer services, and the company recently strengthened its market position with Bedrock, a new service that helps developers build generative AI applications.
The conclusion is: Retail e-commerce sales are projected to grow at 8% per year until 2030, and the ad tech and cloud computing market is projected to grow at 14% per year. This puts Amazon on track for double-digit sales growth through the end of the decade, but revenues will grow even faster as high-margin businesses (i.e. advertising and cloud computing) account for a large portion of total sales. You should.
In fact, Wall Street expects earnings per share to grow 30% annually over the next five years. When considered in that context, Amazon's current valuation of 59 times earnings actually looks quite reasonable. Patient investors should consider buying a small position in this stock today.
2. Docebo
Docebo provides a multi-product learning management system (LMS) that enables companies to create, deliver, and measure the results of training courses across internal (employee) and external (customer) audiences. . One particularly innovative application is Docebo Shape. Use generative AI to automate content creation and turn source materials such as corporate documents, presentations, and case studies into training materials.
Fosway Group, Europe's leading HR technology analyst, has recognized Docebo as the LMS market leader for the sixth year in a row. Meanwhile, Morgan Stanley selected Docebo as a top generative AI stock for 2024. In a note to customers, the company's analysts said Docebo is (1) stealing share from traditional vendors in internal LMS use cases and (2) leading the LMS market. External use case.
Meanwhile, Docebo is still evolving its generative AI capabilities. The company announced new features coming to Shape this year. This includes things like virtual role-play with real-time feedback and an integrated co-pilot feature that further simplifies the creation of learning content. According to management, “Shape will fundamentally change the way training materials are created and consumed.”
According to Grand View Research, LMS spending is expected to grow 20% annually through 2030, and Docebo's strong market presence should lead to above-average growth. In fact, Wall Street expects the company to see revenue grow 25% annually over the next five years. This consensus forecast makes the current valuation of 9x sales look cheap, especially when the past three-year average is 13.9x sales.
Docebo may not be a familiar name to many investors, but the company has a strong presence in the LMS market and uses generative AI to help customers create learning materials more easily. I am. This makes Docebo a worthwhile addition to a broader basket of AI stocks.
Should you invest $1,000 in Amazon right now?
Before buying stocks on Amazon, consider the following:
of Motley Fool Stock Advisor Our analyst team has identified what they believe Best 10 stocks For investors to buy now…and Amazon wasn't among them. These 10 stocks have the potential to generate impressive returns over the next few years.
stock advisor provides investors with an easy-to-understand blueprint for success, including guidance on portfolio construction, regular updates from analysts, and two new stocks each month.of stock advisor Since 2002, the service has more than tripled S&P 500 returns*.
See 10 stocks
*Stock Advisor will return as of February 12, 2024
Randi Zuckerberg is a former head of market development and spokesperson at Facebook, sister of Meta Platforms CEO Mark Zuckerberg, and a member of the Motley Fool's board of directors. John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool's board of directors. Alphabet executive Suzanne Frye is a member of The Motley Fool's board of directors. Trevor Jennewine has positions at his Amazon and his Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Docebo, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends his Alibaba Group and recommends the following options: A long January 2026 $395 call on Microsoft and a short January 2026 $405 call on Microsoft. The Motley Fool has a disclosure policy.
Forget Nvidia: The two artificial intelligence (AI) growth stocks to buy right now are the better upside stocks, according to Wall Street.
