The AI Trade Has Room to Run In the Right Places

Every day brings several reports about companies embracing artificial intelligence (AI) technologies. Some may see a genuine long-term opportunity. Others may see an opportunity to turn their share price around as the market loves this current tech trend.

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  • While big-name tech stocks have largely moved higher, there’s now some potential pockets of overvaluation with the biggest moves so far. That’s creating an opportunity for smaller plays, particularly for companies already rolling out AI tools.

    One such player is Salesforce (CRM). The company just announced its AI Cloud service for customers. This adds to existing AI functionality that they’ve been building into the system. Salesforce has the size and clout to build AI out potentially faster and better than its peers.

    While shares have already moved in-line with the biggest tech names this year, there may be more upside ahead. Salesforce could even see more profits as it raises prices thanks to more offerings from its AI rollout.

    Action to take: Investors may like shares here or on any drop lower. At 29 times forward earnings, Salesforce isn’t overpriced here, especially if AI can deliver improved growth and profit margins.

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  • For traders, shares are in an uptrend that looks likely to continue. The September $230 calls, last going for about $8.15, can likely see mid-double-digit gains.


    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.