While AI stocks have had a great run since ChatGPT launched in late 2022, we’re still in the early stages of the technology. Many who have used AI programs aren’t using them consistently. The ability to benefit from AI tools is still in its early stages.
That’s why the buildout of AI still looks attractive for investors over the long haul. It will take years to build AI programs that are more intuitive and easy to use.
That also means that other companies in the AI space can potentially take the lead in the space. For instance, Advanced Micro Devices (AMD) just made a $4.9 billion bid for ZT Systems. The buy will help them compete with industry leader Nvidia (NVDA) in the chip space.
AMD has been the second-best chipmaker after Nvidia, particularly for AI-related chips. Shares are up just 37% over the past year, even with AMD’s earnings soaring a massive 882%.
Action to take: Investors may like AMD here, as shares are still well off their 52-week highs, and can likely continue higher through the end of the year.
For traders, the January $175 calls, last trading for about $11.35, could see mid-to-high double-digit returns. Traders may want to build a partial stake now, and use any market weakness in September and October to add to that position.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.