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Mon. Jul 22nd, 2024

Is Amphenol Corporation (NYSE:APH) the best undervalued AI stock to buy?

By Vaseline May30,2024
Is Amphenol Corporation (NYSE:APH) the best undervalued AI stock to buy?

We recently published a list of 7 lesser-known, under-the-radar AI stocks that hedge funds are piling into. Since Amphenol is part of the list, the stock deserves a deeper look.

The AI-led stock rally that rewarded mega-cap tech stocks is finally starting to trickle down to other players in the sector that were seemingly unrelated to the AI ​​and tech industries. Think about this: The information technology sector is up about 11% over the past three months, while the utilities sector in the S&P 500 is up 18% over the same period. Why? As investors rush to tap utilities as they stand to benefit from the dramatic increase in energy demand thanks to the data center boom driven by massive AI adoption. As Nvidia’s CEO Jensen Huang put it in the company’s latest earnings call, the “next industrial revolution” has begun with the rise of AI, and data centers around the world are being “converted into AI factories.”

Photo by Mohamed Hadji on Unsplash

AI-led stock market boom: “No longer dependent on just one stock”

A Wall Street Journal report recently quoted Nadia Lovell, senior US equity strategist, global asset management at UBS, as saying that the market is “no longer reliant on just one stock” when it comes to AI because they are seeing a “broadening of the market”. AI trading.”

Insider Monkey’s research supports this idea. Our research recently identified several AI stocks that outperform mega-cap AI stocks with rising valuations. If you’re looking for an AI stock that’s as promising as Microsoft, but trades at less than five times earnings, check out our report on the cheapest AI stock.

For this article, we first did some in-depth research to see which lesser-known companies are offering products and services that will meet the demands of the AI ​​revolution. These companies included those creating hardware, software, infrastructure, and back-end products needed for the mass deployment and consumption of AI. From these companies, we picked seven stocks with the highest number of hedge fund investors. Why are we interested in the stocks that hedge funds invest in? The reason is simple: our research shows that we can outperform the market by imitating the best stock picks from the best hedge funds. Our quarterly newsletter strategy selects 14 small- and large-cap stocks each quarter and has returned 275% since May 2014, beating the benchmark by 150 percentage points (see more details here).

Amphenol Corporation (NYSE:APH)

Number of hedge fund investors: 51

Connecticut-based Amphenol Corporation (NYSE:APH) makes electronic components, fiber optic connectors, cable and interconnect systems. According to experts, it is one of the best under-the-radar AI stocks to buy as Amphenol Corporation (NYSE:APH) would see a rise in demand for its products as more companies deploy data centers and AI infrastructure. The stock is up about 40% so far this year.

Last month, BofA updated its US 1 list, which includes buy-rated US stocks that the company recommends. Amphenol Corporation (NYSE:APH) is part of the list. Evercore also added the stock to its Tactical Outperform list ahead of the company’s quarterly results. Amphenol Corporation (NYSE:APH), which also pays a quarterly dividend of $0.22 per share, beat analyst expectations for its first-quarter results, reporting revenue growth in the period to $3.26 billion.

Of the 919 hedge funds tracked by Insider Monkey, 51 hedge funds tracked by Insider Monkey reported holdings in Amphenol Corporation (NYSE:APH), compared to 41 hedge funds in the previous quarter.

Amphenol Corporation (NYSE:APH) is in the rankings 3rd in Insider Monkey’s list of the 7 Best Under-the-Radar AI Stocks Hedge Funds Are Buying.

If you’re looking for an AI stock that’s as promising as Microsoft, but trades at less than five times earnings, check out our report on the cheapest AI stock.

READ NEXT: Michael Burry is selling these stocks and Jim Cramer is recommending these stocks.

Disclosure: None. This article was originally published on Insider Monkey.

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