DELL, CDNS, INTU: Which AI-Exposed Tech Stock Is Best?
The tech sector has been hot and full of surprises, with overlooked companies like Dell (
NYSE:DELL
) going parabolic in what seemed like an instant. Undoubtedly, AI technology stands to benefit more than just the “Magnificent Seven” stocks. In 2024, we could see the AI wave lift the other boats navigating the rough tech seas. Therefore, let’s use
TipRanks’ Comparison Tool to analyze three tech stocks (DELL, CDNS, and INTU) that could turn AI innovation into meaningful share price drivers over the next year.
Analysts view each stock quite favorably at this juncture, even after their scorching-hot past-year performances.
Dell Technologies (
NYSE:DELL)
Dell
knocked one out of the park when it reported its latest quarterly result, sending shares surging around 30% in a day. High demand for AI servers was a significant reason why Dell was able to pole-vault over expectations on the bottom line. Combined with a 20% dividend hike and upbeat (and AI-heavy) guidance for its Fiscal Year 2025, it seems like many investors are just starting to discover the AI potential to be had in the firm.
I’ll admit that DELL stock was one of the names I scratched off my tech watchlist in favor of some of the bigger and more prominent players in the AI scene. Although shares of DELL have more than tripled over the past year (up 210%), they still don’t look all too expensive at 25.0 times trailing price-to-earnings (P/E) or 15.6 times forward P/E, especially given the magnitude of its AI tailwinds. For these reasons, I’m inclined to stay bullish on DELL, just like the analyst community.
As exciting and emerging terms like edge AI, AI PCs, and neural processing units (NPUs) look to take off in 2024, Dell Technologies stock could be one of the companies next in line to capture the heart of upside-seeking investors. With its AI-capable Precision 3000 and 5000 workstations, Dell stands out as one of the major potential beneficiaries as AI begins to move from the cloud toward the edge.
What Is the Price Target of DELL Stock?
Dell stock is a Strong Buy, according to analysts, with 11 Buys, one Hold, and one Sell assigned in the past three months. The
average DELL stock price target of $115.77 implies 5.3% upside potential.
Cadence Design Systems (
NASDAQ:CDNS)
Cadence Design Systems is a far pricier play than Dell, with shares currently trading at 81.5 times trailing P/E. On the price-to-sales (P/S) front, shares look even pricier at a whopping 20.4 times P/S. Indeed, CDNS stock goes for a massive premium to the application software industry average. But Cadence is a leading intelligence system design play that’s really in a league of its own.
The company’s Millenium M1 AI supercomputer system could change engineering design and complex simulations as we know them. Given how profound the AI-powered technology is, I’d argue that CDNS stock deserves every bit of its seemingly lofty multiple. As Cadence takes the AI ball and runs with it, I find it to be hard to be anything but bullish as the firm looks to bounce back from a rare quarter of subtle softness.
Last month, Morgan Stanley
(
NYSE:MS
) stepped up to remark on Cadence’s long-term strategy, which, it believes, is worth getting behind following the company’s
latest first-quarter fumble. Morgan Stanley analyst Lee Simpson sees “momentum in chip design” continuing “into next year at least.” The bank also raised CDNS stock’s price target to a Street-high $350, up from $260.
What Is the Price Target of CDNS Stock?
CDNS stock is a Strong Buy, according to analysts, with eight Buys and two Holds assigned in the past three months. The
average CDNS stock price target of $321.70 implies 5.1% upside potential.
Intuit (
NASDAQ:INTU)
Intuit stock has been coming back in a big way over the past year and change, now up over 83% from its late-2022 lows. As tax season rolls around, the top tax-prep software firm is bound to grab more attention. However, it’s the firm’s small business and self-employed offerings that stand to be the star of the show as new innovations in the field of AI are thrown into the mix.
As Intuit invests in AI, its economic moat will grow even wider, and its valuation multiple could continue swelling. As shares flirt with new all-time highs, I continue to be bullish on the name.
The company’s latest quarter was pretty good, with sales rising 11.3% year-over-year to $3.39 billion. QuickBooks helped Intuit power the beat, while Credit Karma was a slight drag. Moving ahead, I’d look for Intuit Assist, which is pretty much like an AI copilot for the company’s software suite, to really move the needle higher over the coming year.
Combined with Intuit’s generative AI operating system (GenOS), it’s clear that Intuit’s ecosystem only stands to get more powerful from here. I’m pretty convinced Intuit is an AI stock disguised as a financial software company as the firm looks to achieve its goal of evolving into an “AI-driven expert platform.”
What Is the Price Target of INTU Stock?
Cadence stock is a Strong Buy, according to analysts, with 20 Buys and two Holds assigned in the past three months. The
average INTU stock price target of $705.62 implies 7.7% upside potential.
Conclusion
Look for 2024 to show us that more than just mega-cap tech stars stand to gain from the AI revolution. The following trio stand out as firms that can use AI to extend their advantages in their respective markets of interest. Of the trio, I’m most pumped about Dell. It has a modest multiple and a robust position in AI PCs. Currently, though, analysts see the most upside from INTU stock.
Disclosure