In the past few years, artificial intelligence AI trading has been a "fuel" for the US stock market bull run, but warnings about an AI bubble have grown louder recently. Despite strong earnings reports from top tech companies in recent weeks, volatility in AI trading has intensified, prompting investors to seek alternative investment opportunities.
Investment Bank Gil Luria, head of technology research at DA Davidson, recently stated that he is generally bullish on artificial intelligence , but also believes that several stocks outside the core AI theme have strong potential.
Luria specifically mentioned three smaller tech stocks, arguing that their strong performance was overshadowed by the "noise" from other tech giants. These three companies operate in the AI infrastructure and software sectors and have benefited from investors' boundless enthusiasm for the transformative potential of AI.
In a recent interview, he stated, "The reason we're focusing on infrastructure software stocks this year is that they are the clearest beneficiaries of the rising use of artificial intelligence, and they don't face many of the risks associated with application software companies. "
Luria pointed out that the three companies outside of the core AI deal are:
Snowflake: Up 62% year-to-date. This is a US cloud data storage company headquartered in Bozeman, Montana. The company's platform allows for data analysis and synchronous access to datasets with minimal latency. Its services are available on Amazon. AWS (Web Services), Microsoft It operates on Azure and Google Cloud Platform.
Datadog: Up 11% year-to-date. This is a US-based SaaS company that provides monitoring services for servers, databases, and more.
JFrog: Up 113% year-to-date. JFrog is the only software supply chain platform that provides end-to-end visibility, security, and control, enabling automated delivery of trusted versions. This highly scalable, hybrid JFrog platform is open, flexible, and integrates with all the package technologies and tools that make up the software supply chain. Enterprises can benefit from it, enabling deployment in any type of environment, including machine learning models, edge software, and deployments in production data centers. Complete traceability of the software.
Luria points out that the performance of the little-known Silicon Valley software company JFrog is clearly outstanding. Moreover, its performance has surpassed that of all members of the "Big Seven" tech companies so far this year.
He is optimistic that software infrastructure will benefit regardless of how the artificial intelligence market develops.
"Regardless of how enterprise customers build their AI tools, or what kind of AI tools they build, they need more data pool capacity (Snowflake), more applications and infrastructure to observe (Datadog), and more binary code to manage (JFrog)."
Luria emphasized that he believes AI-driven transactions will not disappear and will continue to stimulate growth across industries. However, he also believes that a clear advantage for Snowflake, Datadog, and JFrog is that large companies will always need their services to continue expanding their AI tools.
“These three companies are already excellent, but the more artificial intelligence is applied, the better they will become,” he added.
(Article source: CLS)
