It might be a good idea to check out stocks that could weather potential price corrections driven by AI.
Do you have some capital set aside for investing? It’s tricky these days. AI stocks seem to be doing exceptionally well while others struggle. Still, there’s a nagging feeling that if these AI-driven stocks take a hit, the broader market could follow suit. It’s a bit of a conundrum.
The upside is that the risks and rewards in the market might not be as skewed as they first appear. You just need to dig a bit deeper to uncover some worthwhile risk-reward scenarios. Here’s a look at three stocks that could be worth a $1,000 investment.
GE Vernova
General Electric has been through the wringer, especially after deciding to spin off into more specialized units in 2021—but that was perhaps too late for many investors who had lost faith. However, one of its offshoots, GE Vernova, seems to be making a comeback. This division focuses on heavy equipment for the energy sector, including wind, nuclear, and hydro power. They’ve also been working on technologies for grid connectivity and energy storage. The company recorded $35 billion in business last year, which was a 5% increase from the previous year, with nearly half coming from ongoing services. They even received $44 billion in equipment orders.
With the surge in AI data centers driving electricity demand, this could just be the start. Goldman Sachs estimates that by 2030, the energy industry will need 165% more electricity than it’s currently utilizing.
It would be fantastic if we could meet this need solely with renewable energy, but that’s not feasible right now. Conventional power plants from GE Vernova will be essential in the near term. For instance, Crusoe, an AI infrastructure provider, recently placed an order for more gas turbines from GE Vernova, increasing their total to 29 units, showcasing the growing need for localized electricity generation.
This is only the beginning for GE Vernova, as their order backlog reached $135.3 billion by the end of the third quarter and continues to grow rapidly.
CRISPR Therapeutics
The concept of editing the human genome has been on the table for a while now, but actual implementation was elusive—for a long time.
This changed when Dr. Emmanuel Charpentier and Dr. Jennifer Doudna discovered how to use specific proteins to target and snip at CRISPR sequences in bacterial DNA, allowing for repairs that were previously thought impossible. The company they founded, CRISPR Therapeutics, is set to begin human trials soon. Charpentier and Doudna won the Nobel Prize in Chemistry in 2020—before the company garnered any approvals, the first being for Casgevy, a treatment for beta-thalassemia.
However, this approval doesn’t encapsulate the entire potential of CRISPR technology, which is likely why the stock hasn’t seen significant movement since. Investors might be waiting for results from trials involving cardiovascular disease and diabetes. Plus, it’s worth noting that customizing Casgevy for individual patients can take time.
Even so, analysts forecast that sales next year could quadruple compared to this year’s estimates once a significant number of initial patients start treatment. While a cautious approach is often sound, it’s important to remember that delays between starting treatment and receiving outcomes could ignite stock prices if investors catch on. Future updates on the CRISPR drug CTX112 might also provide a boost, particularly if they validate this gene-editing approach.
Taiwan Semiconductor Manufacturing
If you’ve been keeping an eye on the semiconductor sector, you probably see surprising alliances forming, such as partnerships between Intel and Nvidia in developing AI infrastructure. Then you have Microsoft competing with OpenAI’s ChatGPT, which shows the breadth of collaboration and competition.
The demand for AI-driven computing tech is skyrocketing, sometimes outpacing supply. However, one player, Taiwan Semiconductor Manufacturing, doesn’t have to rely on partnerships for survival. Despite efforts by the industry to reduce reliance on them, TSMC still produces a large portion of high-performance chips around the world. Constructing a competitive semiconductor foundry is not only complicated but also costly and time-consuming, as Intel has found out, given their struggles to ramp up production.
Nvidia recognizes TSMC’s significance as well. CEO Jensen Huang remarked that investing in TSMC is a smart move, emphasizing the stability of their dominance in chip manufacturing.
This doesn’t mean that TSMC’s performance is without its fluctuations, but such dips could represent buying opportunities.
