Revealed: 5 Best Stocks to Buy Now (I'm Buying!)

Summary

This video dives into five stock picks that offer strong growth potential despite market fluctuations. AMD, struggling in the GPU sector but strong in CPUs and AI, is seen as a buy at $110 or lower. Qualcomm, a dividend payer, remains attractive under $175, with growth in automotive and IoT. Estera Labs is a speculative buy with high growth potential in semiconductor connectivity. Workday, a stable SaaS company, is poised for growth with new AI-driven products. Lastly, ON Semiconductor, currently undervalued, is expected to recover and offer strong returns in the next 18 months.

Takeaways

• 😀 AMD's stock is down 35% in the past year, but the company reported strong earnings, with a 24.2% year-over-year revenue increase, driven by data center growth.
• 😀 Despite AMD's solid data center performance, analysts expected higher numbers, leading to missed expectations and a decrease in stock value.
• 😀 AMD's CPUs are gaining market share in the data center, with a 50% market share among hyperscalers, though its GPU competition with Nvidia remains a challenge.
• 😀 AI inference, particularly edge inference, is a significant area for AMD's growth, with its Ryzen AI 300 series chips positioned for success in AI workloads on devices.
• 😀 Despite its struggles against Nvidia in GPUs, AMD is expected to see multi-year opportunities as the importance of CPUs and NPUs increases in the AI space.
• 😀 Qualcomm is well-positioned to lead in the Edge inference space, but risks remain with potential competition from Apple replacing Qualcomm's chips.
• 😀 Qualcomm's stock is attractive for dividend investors, with a non-GAAP PE ratio under 15 and a solid dividend yield of 2%.
• 😀 Altera Labs, a semiconductor connectivity company, shows strong growth with a 179.2% year-over-year revenue increase, but its valuation is high with a speculative nature.
• 😀 Altera Labs' stock has fallen 11% after its earnings report, but it has strong growth potential as it continues to benefit from high-speed connectivity demand in data centers.
• 😀 Workday is focusing on managing AI agents within organizations, positioning itself as a leader in workforce management and AI agent technology, with potential revenue growth driven by this shift.

Q & A

Why is AMD stock down so much despite good earnings?

AMD's stock decline is due to a combination of factors. Despite reporting strong earnings, including a significant revenue growth in its data center segment, analysts had higher expectations for data center revenue. AMD's stock was also overvalued at its peak, which led to a negative sentiment once it corrected. Additionally, weak guidance for the first quarter of 2025 and a slowdown in the gaming segment contributed to the stock's decline.

What is the outlook for AMD in the next few years?

AMD's outlook is positive due to its strong position in data center CPUs and the expected release of next-generation GPUs in mid-2025. The company's focus on AI inference, particularly edge inference, presents long-term growth opportunities. While AMD struggles to compete with Nvidia in GPUs due to Nvidia's stronger software ecosystem, AMD is positioned to gain market share in the CPU and AI space.

What are the main risks to investing in Qualcomm?

The primary risk for Qualcomm lies in the potential for Apple to replace its chips, which could impact Qualcomm's $7.7 billion in revenue by 2028. However, Qualcomm's diversification into automotive and IoT markets could offset this loss, with these segments projected to grow significantly. Additionally, Qualcomm's strong profitability and attractive valuation make it an appealing long-term investment, though it is not considered a high-growth stock.

What makes Qualcomm an attractive investment despite its risks?

Qualcomm is attractive due to its strong profitability, with a high gross profit margin and its position as a leader in wireless technology. The company also offers a stable 2% dividend yield and has an appealing valuation, particularly at share prices below $175. The growth risks, such as potential revenue loss to Apple, are balanced by Qualcomm's strength in automotive, IoT, and 5G technology.

Why is Alab considered a speculative investment?

Alab is considered speculative due to its high valuation and the fact that it is not yet a profitable company. Its price-to-sales ratio is very high, and its non-GAAP P/E ratio is extremely elevated. However, its strong growth potential, particularly in high-speed connectivity and data center applications, makes it an appealing choice for aggressive investors willing to take on the risk of volatility and potential losses.

What is the growth outlook for Alab?

Alab is poised for rapid growth, with a projected 179% year-over-year revenue increase. The company benefits from momentum in high-speed connectivity, integrated circuits, and connectivity systems. However, this growth is contingent on continued demand and the company's ability to manage its speculative valuation effectively. Investors should monitor the stock's performance, particularly in the next few quarters, to assess whether the momentum is sustainable.

What are the potential risks of investing in Workday?

Workday faces some risks related to its pricing and market competition, as it is positioned in a niche within the SaaS sector. The company is also laying off employees as part of its shift toward artificial intelligence, which may cause short-term disruptions. Despite these challenges, Workday's strong profitability, recurring revenue model, and new AI-driven product offerings make it an attractive option for long-term investors.

What makes Workday a good investment in the long term?

Workday is a strong long-term investment due to its role in workforce management and its focus on integrating AI agents into businesses. The company’s solid profitability metrics and recurring revenue from its SaaS model ensure stable performance. The launch of new AI tools, like the agent system of records, could significantly drive future growth, especially as the demand for AI-powered business solutions increases.

Why should investors consider On Semiconductor despite its recent struggles?

On Semiconductor is an appealing investment due to its solid profitability and attractive valuation, especially after significant recent declines. The company's focus on energy infrastructure, electric vehicles, and AI data centers positions it for long-term growth. Although the stock is currently in a down cycle, investors with a long-term outlook might benefit from buying during this period of weakness, anticipating a rebound in 2025.

What is the potential for On Semiconductor to recover in the next 18 months?

On Semiconductor's stock has the potential to recover within the next 18 months, with expectations that it could reach $75 to $85 per share. The company's growth segments, including energy infrastructure and electric vehicles, are currently in a down cycle but are expected to rebound by the second half of 2025. Investors who buy during this dip may see significant upside when these sectors recover.