Yahoo Finance 2 No-Brainer AI Stocks to Buy Now With $7,000
Written by Christopher Liew, CFA at The Motley Fool Canada
The Toronto Stock Exchange is on track to outperform this year and beat its 8.12% overall return in 2023. As of September 16, 2024, the year-to-date gain is 13.09%, with only communications services out of 11 primary sectors in negative territory. However, if you’re looking for potential multi-baggers, two artificial intelligence (AI) stocks are ideal options for Tax-Free Savings Account (TFSA) investors.
Celestica (TSX:CLS) is Canada’s counterpart to America’s AI king, NVIDIA. Propel Holdings (TSX:PRL) isn’t a chipmaker but a financial technology company with an AI-powered lending platform. Both growth stocks have market-beating returns, and the stock prices are likely to rise further.
Profitable business
Celestica has an overall return of 471.47% in the last three years compared to NVIDIA’s 423.61% within the same period. At $61.53 per share, the Canadian stock is up 61.53% year to date. Moreover, NVDA is more expensive at US$116.78.
The $7.44 billion American-Canadian electronics manufacturing services company is a leader in design, manufacturing, hardware platform and supply chain solutions. Celestica helps customers solve complex technology challenges and be more innovative.
Celestica’s business thrives due to favourable demand dynamics. In the first half of 2024, revenue increased 21.8% year over year to US$4.6 billion, while net earnings soared 151% to US$201.3 million from a year ago. The bottom line in the second quarter (Q2) of 2024 climbed 79.5% to US$99.6 million compared to Q2 2023. During the quarter, adjusted free cash flow (FCF) reached US$63.3 million.
According to its president and chief executive officer (CEO), Rob Mionis, it was another very strong quarterly performance. Management raised the 2024 full-year guidance and expects to end the year with $9.45 billion in revenue. “We continue to stay focused on solid execution for our customers and delivering on our strategic priorities and financial targets,” he added.
Celestica derives revenue and profit from two core business segments: two operating Advanced Technology Solutions (ATS) and Connectivity & Cloud Solutions (CCS). ATS caters to aerospace & defence, industrial, health tech, and capital equipment business clients. CCS focuses on communications and enterprise (servers and storage) end markets.
Gavin Cato, Portfolio Solutions head and CCS chief technology officer, said, “Enterprises are generating, storing and analyzing increasing amounts of data, and relying on real-time analytics to make strategic decisions about their operations.” Celestica’s latest offering is its SC6100 storage controller.
The next-gen, 2U rackmount all-flash storage controller delivers increased performance and high availability for demanding enterprise application workloads.
Fast-rising fintech
Propel Holdings is flying high in 2024. At $27.27 per share, current investors enjoy a mouth-watering 114.01% year-to-date gain. An added charm is the decent 2.03% dividend. Had you invested $7,000 in PRL one year ago, your money would be three times more or $21,352.35 today. Market analysts recommend a buy rating for the AI stock. Their 12-month average price target is $32.82 (+20.35%).
The $937.35 million fintech facilitates credit products (installment loans and lines of credit through its proprietary online lending platform. Propel’s most recent quarterly results were mighty impressive. In Q2 2024, revenue and net income increased 49% and 95% to US$106.8 million and US$11.1 million, respectively.
Outsized gains
Celestica and Propel Holdings benefit from the AI hype. Both have delivered outsized gains and are well-positioned to become big winners in 2024.
The post 2 No-Brainer AI Stocks to Buy Now With $7,000 appeared first on The Motley Fool Canada.
Should you invest $1,000 in Celestica Inc. right now?
Before you buy stock in Celestica Inc., consider this:
The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Celestica Inc. wasn’t one of them. The 10 stocks that made the cut could potentially produce monster returns in the coming years.
Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $21,758.28!*
Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 31 percentage points since 2013*.
See the 10 stocks * Returns as of 9/16/24
More reading
Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Propel. The Motley Fool recommends Nvidia. The Motley Fool has a disclosure policy.
2024
