Magnificent Seven member and Google parent Alphabet (GOOGL) leads this week’s list of AI stocks to watch near buy points. Fellow artificial intelligence plays Palantir Technologies (PLTR), MongoDB (MDB) and Super Micro Computer (SMCI) join the list.
This week’s list features names that recently fell but are now rebounding back near buy points. It’s a reminder that sometimes stocks flash sell signals, but can go on to offer new entries.
Palantir stock rocketed this year as the analytics, data mining and software company utilizes AI for its defense, cybersecurity and financial services. The company has also expanded into health care, energy and manufacturing.
Last month, PLTR stock hit a 52-week intraday high on Nov. 21. However, shares reversed after the size of a highly-anticipated U.K.’s National Health Service contract disappointed. The share drop undercut the November breakout buy point by more than 8%, triggering the automatic stop-loss rule and sending the stock below its 50-day moving average.
Palantir on Friday received a one-year extension on a contract with the U.S. Army worth up to $115 million. That was better than some bearish concerns.
On Friday, PLTR stock rose as high as 19.15, breaking a downtrend and flashing an early entry. But shares erased those gains to end down 1 cent at 18.20. For the week, Palantir climbed 2.4%, regaining its 50-day moving average, but closing just below the 10-week line.
At this point, investors might want to wait for a move above Friday’s intraday high before taking a position.
Shares may be in the process of forging a new base next to its choppy cup base.
Palantir has a 95 Composite Rating out of a best-possible 99. The Composite Rating combines various technical indicators into one easy-to-read score. Shares have an 84 EPS Rating as earnings growth tripled the past four quarters. PLTR stock’s relative strength line is shy of its late November highs but still has a 97 RS Rating.
Palantir rallied 183% so far this year.
MongoDB plunged to its 10-week line following the company’s Q3 earnings report on Dec. 5. The New York-based database software company easily beat earnings and revenue expectations and raised its Q4 sales forecasts.
Still, MDB stock tumbled as the lifted guidance missed the lofty expectations from analysts.
Make no mistake, the 12% weekly decline in huge volume was an ugly move.
MDB stock has since recovered above its 21-day exponential moving average and 10-day lines. Shares are back in a buy zone for a cup-with-handle base after retaking the 412.67 entry on Dec. 14. Still, MongoDB’s 10% weekly gain was an inside week to the prior week’s sell-off.
MongoDB has a perfect 99 Composite Rating and a 95 RS Rating. Shares have an 83 EPS Rating. MDB stock bolted 113% higher in 2023.
Super Micro Computer
Super Micro Computer is a member of the IBD 50 list and leads the Computer-Hardware/Peripherals Group according to the IBD Stock Checkup. The data center specialist handily beat Q1 estimates at the beginning of November and crushed forecasts for its outlook.
SMCI stock, after a huge move from April to July, has had a choppy pattern since gapping down on fiscal Q4 results in early August. A couple of efforts to flash buy signals fizzled along the way, including efforts in late November, at the tail end of its post-Q1 earnings run.
Shares tumbled below the 50-day line in early December, but it has recovered again. Shares crossed a trendline late last week, but investors should likely use the Nov. 29 high of 306.52 as an aggressive entry. The Oct. 10 peak of 317.50 is another early entry.
As with some other stocks on this list, some tighter action would be welcome.
Super Micro has an 98 Composite Rating and a 99 RS Rating with its relative strength line working toward its early August highs. Shares have a 91 EPS Rating.
SMCI stock rocketed about 266% this year.
Google stock steadily climbed, rising 12.4% from Nov. 1 to Nov. 22, before reversing lower to end the month. Meanwhile, the early December debut of Google’s new AI model was a disappointment after it was revealed the tech behemoth exaggerated its capabilities.
Google debuted its Gemini AI model on Dec. 6. However, the demo video displaying the AI’s capabilities turned out to be edited, Bloomberg reported. Google admitted the demo was created using still image frames from the footage with additional prompts via text, as well as edited to make Gemini response times appear quicker.
Google stock popped 5.3% on Dec. 7 before falling on reports of the edited demonstration.
Shares are back below the 50-day line, hitting resistance there all last week. GOOGL stock still isn’t that far from a cup-with-handle base with a 139.42 buy point. Google is the only Magnificent Seven stock that isn’t in a buy zone are right now.
While investors are focusing on AI efforts for future growth, in the here and now, Google earnings and sales gains have accelerated amid an improving online ad market.
Google stock has a 90 Composite Rating and an 81 RS Rating. The company’s earnings accelerated the past two quarters while sales growth increased over the last three quarters. Google stock has a 97 EPS Rating.
GOOGL spiked 50% this year.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
YOU MAY ALSO LIKE: