Today, top analysts are not just looking at AI stocks alone—some of which have skyrocketed; a perfect example is Nvidia (NVDA), which is up year-to-date by 178.07%—but also at information technology (IT) stocks that are set up to benefit from the technology.
Many companies directly involved in AI may have risen too high and too quickly, making them risky buys at this point. The stocks I’ll be focusing on today each have the following:
– The ability to utilize and invest in AI quickly
– Digital and cloud computing offerings
– A history of adjustability during market turbulence
– Past, current, and future profitability
Additionally, these three stocks have some of the lowest debt-to-equity ratios I’ve ever seen…
Globant SA (GLOB)
One stock that stands out as a top choice is Globant SA (GLOB), due to its position as a prominent player in digital transformation (DX) and its strong partnerships with established blue-chip clients. GLOB‘s success in the global DX market can be attributed to expanding its services into new industries and benefiting from clients’ increased IT outsourcing. These factors contribute to GLOB‘s growing market share and make it an appealing stock to consider while it flies slightly under the radar.
GLOB, slightly up year-to-date by 3.89%, is trading near the bottom of its range, leaving plenty of room. GLOB has a TTM revenue of $1.85 billion at $3.34 per share, from which it has profited $149 million on the back of its 8.03% net margin. GLOB has an ROE (return on equity) of 10.03%, a PEG ratio of 1.58x, revenue growth of +17.7% year-over-year, and a great D/E (debt to equity) measure of 8.31%. GLOB recently beat analysts’ projections on both EPS and revenue. With a 10-day average volume of roughly 410 thousand shares, GLOB has a median price target of $205, with a high of $240 and a low of $180, representing the potential for a 37.5% jump from its current price. GLOB has a consensus Strong Buy rating.
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Accenture PLC (ACN)
Accenture plc (ACN) presents a compelling investment opportunity due to its robust data and AI practices, boasting a workforce of roughly 40,000 experts across 50 delivery centers. With plans to expand to over 80,000 delivery professionals, ACN is clearly committed to growth. ACN‘s strategic partnerships with hyper-scalers and emphasis on AI acquisitions position it as a prominent AI beneficiary. Along with a juicy dividend, ACN is an attractive stock to keep a close eye on.
ACN’s stock is currently up by 11.47% YTD and is trading around the middle of its existing 52-week range. From $63.5 billion in TTM revenue at $11.22 per share, ACN has made a net income of $7.16 billion via its 11.27% profit margin and has an ROE of 30.02%. At its latest earnings call, ACN reported $3.15 per share
vs. $3.00 per share expected to beat analysts’ EPS projections by 5.08%, and it shows year-over-year growth in revenue (+2.51%) and net income (+12.54%), with a stunningly low 0.21% debt-to-equity figure. ACN has a 1.51% annual dividend yield and a quarterly payout of $1.12 ($4.48/year) per share. With a 10-day average volume of 3.5 million shares, ACN’s median price target is $340, with a high of $377 and a low of $290; this represents an almost 27% price upside. ACN has 17 buy ratings and 10 hold ratings.
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Epam Systems Inc (EPAM)
EPAM Systems Inc. (EPAM) emerges as an excellent stock choice due to its distinct focus on high-end engineering. By diligently constructing and maintaining the essential infrastructure to facilitate widespread AI implementation across enterprises, EPAM leverages its exceptional talent pool with a digitally focused approach. This positions EPAM as a prime contender to capitalize on the growing demand for AI solutions.
EPAM’s stock is down year-to-date by 32.78% and is at the bottom of its 52-week range, despite having a positive SMA (simple moving average). EPAM has a TTM revenue of $4.86 billion at $7.23 per share, from which it has profited a net income of $432 million through its margin of 8.88%. With a PEG ratio of 1.81x, EPAM has a 30.67% ROE with a D/E (debt to equity) measure of 0.90%. At its last earnings report, EPAM’s EPS was $2.47 vs. the $2.34 expected by analysts (a 5.36% surprise), and it shows YOY growth in revenue (+3.36%) and net income (+14.01%). With a 10-day average volume of almost 900 thousand shares, EPAM has a median price target of $240, with a high of $300 and a low of $215, representing a potential price jump of more than 36% from where it currently sits. EPAM has 8 buy ratings and 8 hold ratings.
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