Invest Like Wall Street, Not r/WallStreetBets: 3 Standout Stocks You Can Count On
For the most part, Reddit’s picks from 2021 haven’t panned out well at all over the long term. You probably aren’t going to find any standout stocks in the same place where you are finding fail videos and extremist political ramblings. AMC Entertainment (NYSE:AMC), for example, closed at $4.36 on March 1, versus its 2021 high of nearly $500, while GameStop Corp (NYSE:GME), finished at $14.95 on March 1, down from its 2021 high of $120.75. Another Reddit favorite from a few years ago, Bed, Bath and Beyond, even went bankrupt, while headphone maker Koss Corporation (NASDAQ:KOSS) tumbled from its 2021 high of $127 to $2.50.
Even Coinbase (NASDAQ:COIN) which has been relatively successful amid the resilience of crypto prices, is still trading well below its 2021 high of $369. Those stocks’ track records show that, over the longer term, powerful fundamentals and huge opportunities win out over bursts of popularity that are completely unjustified by fundamentals and reality-based outlooks. With that in mind, here are three stocks to buy that will indeed climb over the long term because their issuing firms have excellent businesses and great, easily converted opportunities.
IBM (IBM)
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IBM (NYSE:IBM) is benefiting a great deal from its focus on helping its customers implement AI and shift to a mix of public and private clouds. As a result, it’s one of the best stocks to buy currently.
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Moreover, the firm’s Watsonx AI platform is proving to be quite popular, with more than 150 enterprioses, including Citi (NYSE:C), NASA, and Samsung, using the system as of last July.
Furthermore, IBM has since made the platform more appealing by partnering with Amazon’s (NASDAQ:AMZN) cloud unit, AWS, to allow its customers “to quickly and responsibly scale AI workloads by using a comprehensive stack of generative AI, which consists of Amazon Bedrock and IBM watsonx running on AWS Cloud and across hybrid cloud environments. ”
As more organizations greatly increase their use of AI, the growth of the firm’s Data & AI revenue will accelerate, Seeking Alpha columnist Uttam Dey recently predicted.
Alphabet (GOOG, GOOGL)
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Alphabet (NASDAQ:GOOG,NASDAQ:GOOGL) has had more than its share of skeptics in recent weeks, as bears have questioned whether the firm’s search engine can withstand challenges from AI chatbots and the answers provided by its own AI to certain questions offended some users.
However, old habits are hard to break, so I predict that most users will continue to rely on Google’s search engine for many years to come. Furthermore, according to a majority of sources, Alphabet’s underlying AI technology is actually very strong.
What’s more, the tech giant, which had nearly $111 billion of cash as of the end of last quarter, can afford to make acquisitions and hire many experts to greatly improve the quality of its AI offerings over the longer term.
Also, I’m confident that by 2030, Waymo will contribute considerable amounts to the firm’s top and bottom lines.
Arista Networks (ANET)
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Computer network equipment maker Arista Networks (NYSE:ANET) reported strong fourth-quarter results on Feb. 12, showing that it’s benefiting meaningfully from the AI boom.
The firm’s top line climbed by an impressive 21% versus the same period a year earlier, while its net income rose to $513.6 million, up from $427.1 million in Q4 of 2022.
Among the company’s most prolific customers are Microsoft (NASDAQ:MSFT) and Meta (NASDAQ: META), which are also two of the largest beneficiaries of the AI Revolution. As MSFT and Meta continue to get big boosts from their deployment of AI, Arista’s financial results should continue to surge.
Among the 21 Wall Street analysts who cover the name, 13 rate it a “Strong Buy” and two have “Buy” ratings on it.
Analysts, on average, expect the company’s earnings per share to advance to $7.59 this year and $8.56 next year from the $6.94 of EPS that it generated in 2023.
On the date of publication, Larry Ramer held a short position in COIN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com
Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been SMCI, INTC, and MGM. You can reach him on Stocktwits at @larryramer.
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