As more investors take some AI stock profits off the table, those seeking to bet on the next boom phase may just have an opportunity to do so at a slight discount. Of course, buying dips and braving corrections can come with near-term risks. Some edge AI stocks seem to be a better deal today than just over a week ago, when the AI trade was close to its peaks.
As large language models (LLMs) shrink, perhaps by enough to fit on consumer devices, it will become even harder to avoid the buzz surrounding personalized AI on the edge and the unique slate of hardware that powers it. While the next few weeks will be bumpy for stocks as investors sour over big-tech earnings, the long-term trajectory seems promising enough to watch the top firms at or close to the AI edge.
In this piece, we’ll check out three of the best edge AI stocks worth buying or watching on the way down.
Amazon (AMZN)
Amazon (NASDAQ:AMZN) is already one of the kings of at-home AI, with an Echo device now found in many homes nationwide. Indeed, the Echo is home to Alexa, a helpful (but painfully dated) AI assistant about to get a big facelift as Amazon seeks to keep up with its top rival in the home, Apple (NASDAQ:AAPL).
Apple Intelligence is right around the corner, and it could push the iPhone maker from “catching up on AI” to leading the race on the edge. At this juncture, there are no plans for Apple Intelligence to come to HomePod, Apple’s Siri-enabled home speaker. However, it only makes sense that future versions of HomePod incorporate hardware to support Apple Intelligence.
Either way, Amazon seems to be in a race to catch up to Apple right now. The new LLM-enabled Alexa will be playing from behind. That said, a few years down the road, perhaps the Echo will be the alternative edge AI device, smart enough to give Apple a good run.
Apple (AAPL)
When it comes to investing in AI on the edge, it’s hard not to mention Apple. The company is readying to launch its most AI-capable phone later this year. And while it’s likely to be the best, if not one of the best, AI phones on the market come launch, the big question is whether it’ll induce enough demand to power what some may refer to as a “supercycle.”
Much-respected Apple analyst Ming-Chi Kuo believes that iPhone 16 demand expectations “may be too optimistic.” Kuo, who has an excellent track record, is probably right in that too many analysts are pounding the table a bit too hard over the potential for an iPhone 16 refresh cycle.
Indeed, Apple Intelligence is a big deal, but you don’t need the latest to run it. The current-gen iPhone 15 Pro model is good enough to power the impressive AI software upgrades to come. In fact, it’s the AI device that many people may not even know they currently possess!
Despite Kuo’s skepticism, AAPL stock remains one of the best edge AI stocks to own for the long term.
Intel (INTC)
Next, we have Intel (NASDAQ:INTC), the AI-capable semiconductor company that nobody seems to like these days. Undoubtedly, INTC stock has fallen behind with some of its chip designs, and it’s racking up the bills big-time as it invests in its U.S.-based foundries. Higher costs and less-than-extraordinary chip offerings make an ice-cold stock less appealing on the way down.
Either way, Donald Trump’s latest Taiwan comments shine a light on the long-term value of Intel’s foundry buildout. As Intel doubles down on its new edge platform, perhaps value investors seeking deeper value should go with the name over its much-pricier rivals in the space.
With INTC stock flirting with 52-week lows again, perhaps now’s a great time to start thinking about nibbling into a starter position.
On the date of publication, Joey Frenette held a long position in Apple and Amazon. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor held a long position in AMZN.