OpenAI o1 Picks 2 Stocks to Buy After Q3 2024 Earnings Season

Most companies are preparing to announce third-quarter 2024 earnings reports, which are likely to influence investor interest in their company’s shares, with an artificial intelligence (AI)-powered tool providing insight into which entities may stand out.

Indeed, in recent quarters, companies that have ventured into the artificial intelligence space have dominated the market and remain among the most closely watched pre-season results.

To do this, Finbold used OpenAI’s o1 tool to select two AI stocks that investors should consider based on their earnings reports.

Palantir (NYSE: PLTR)

First on the list is US software giant Palantir (NYSE: PLTR), which has had a remarkable year that culminated with its stock trading above $40 at press time.

The AI ​​model highlighted Palantir as a strong buy due to its leadership in AI-based analytics and consistent government contracts driving revenue growth. For example, in the third quarter, Palantir signed a $99.2 million contract with the US Army to support machine learning.

OpenAI o1 added that the company is well positioned to benefit from the artificial intelligence boom, and its tools used in industries such as defense, healthcare and finance signal a potential increase in profitability.

Palantir expects third-quarter revenue of $697 million to $701 million, above analyst estimates of $679.1 million, as it seeks to reduce its reliance on government contracts, which accounted for 54% of second-quarter sales.

Meanwhile, with Palantir rising significantly in 2024, there are concerns that the company’s shares may be expensive and not reflect the company’s actual valuation. As Finbold reports, stock analyst Jake Ruth warned that the stock could crash, saying that no company can sustain such an upward trajectory for long.

“PLTR looks VERY expensive at $40 per share.<…> Valuations matter. Maybe it’s a fair price and they will keep killing it, just be careful. Multiple expansion cannot continue indefinitely,” he warned.

On the other hand, Bank of America (NYSE: BAC) analysts maintain that the company’s stock still has some upside potential, setting a price target of $50. The bullish outlook is supported by other fundamental factors, such as Palantir’s recent addition to the S&P 500 Index, which exposes it to institutional capital.

Advanced Micro Devices (NASDAQ: AMD)

In the case of Advanced Micro Devices (NASDAQ: AMD), the AI ​​model stated that investors should consider the company due to its expansion in the AI ​​chip manufacturing space, which competes with Nvidia (NASDAQ: NVDA). The model cited MI300 series accelerators, designed with AI workloads in mind, as a key factor to challenge Nvidia. Meanwhile, o1 OpenAI said the company’s key partnerships, AI leadership strategy and reasonable valuation create room for greater growth potential.

AMD estimates third-quarter revenue of $6.7 billion, plus or minus $300 million. That’s higher than the average analyst estimate of $6.61 billion.

If earnings are in line with analyst estimates, it will add momentum to the stock, building on other strong fundamentals. In this context, one of the key growth enablers to watch is the upcoming AMD AI event scheduled for October 10, which will showcase next-generation AMD Instinct accelerators and fifth-generation AMD EPYC server processors.

Analysts such as Bank of America’s Vivek Arya maintain that the stock remains a buy and has a price target of $180, citing that the AI ​​event “could revive AMD stock.”

Looking at AMD’s price trajectory, equity is rising rapidly. At the last market close, it was trading at $170, gaining almost 5% on the daily chart.

It is worth noting that the analysis according to TrendSpider suggests that AMD is showing strong signs of potential growth. After almost 12 months, the weekly moving average convergence divergence (MACD) has turned positive, signaling a possible change in dynamics. This is the first time since early 2023 that the stock has shown such a positive technical indicator on a weekly basis, making it a promising setup for bulls.

Moreover, AMD price recently broke out of a descending channel, further strengthening the bullish sentiment.

Overall, as the third-quarter 2024 earnings season unfolds, AI-powered analytics suggest that Palantir and AMD are two stocks that investors should watch closely. While both companies face some challenges, such as Palantir’s valuation concerns and competition with Nvidia for AMD, their fundamental fundamentals and market positions make them attractive options for investors seeking exposure to the AI ​​sector