Citrini, Who Spooked the Market with Her AI Threat Forecast, Named Three AI Stocks to Buy

Opportunities for investors in AI stocks still exist, but they should likely be sought among companies that have so far been overlooked by analysts or do not directly fit into this investment theme, according to Citrini Research. Among the most notable stocks that the research firm has identified as future winners thanks to AI are Qualcomm, GitLab, and Meta, according to Business Insider.

This year, Citrini Research caught investors’ attention with a report on the potentially severe consequences of artificial intelligence adoption for the labor market, triggering a sell-off of shares in companies at risk of being swept away by AI. However, Citrini analysts do not view the outlook for AI-related stocks on the stock market quite so negatively. They explained why the commonly cited reasons for the correction in the tech sector—ranging from competition from China and the emergence of cheaper large language models to ongoing geopolitical turmoil—do not accurately explain the recent market decline. Last week, chipmakers found themselves on the brink of a bear market.

“Rather, the rapid, debt-fueled growth of the most heavily leveraged positions related to AI and other thematic ideas created a vulnerability in and of itself: the unwinding of such positions typically occurs with the same intensity with which they grew,” according to a Citrini research note cited by Business Insider.

Business Insider notes that Citrini has previously described Qualcomm as an undervalued AI company with high potential, thanks to its position in the chip market. In a new report, the research firm continues to view its prospects positively and believes that Qualcomm should be seen as much more than just a chipmaker: the company could become one of the largest equipment manufacturers in the technology sector.

"Revenue from data centers will be the main driver. We understand why investors are reluctant to confidently factor Qualcomm’s revenue from this segment into their forecasts following the company’s unsuccessful attempt to enter the market in 2017 with the Centriq 2400 processor. However, there are reasons to take this latest attempt seriously,” the note states.

Among these reasons is Qualcomm’s ability to address key bottlenecks in AI infrastructure, including reducing power consumption and dependence on expensive, high-bandwidth HBM memory, which is currently in short supply. Citrini also pointed to the company’s clear product roadmap as another reason to be optimistic about its growth prospects.

Analysts also expect major changes in the software market. Despite lingering concerns that many software developers will not survive the rise of AI, Citrini believes that some of them will emerge as major winners as the deployment of AI-powered software becomes the norm. GitLab could be one of the main beneficiaries of this trend, Citrini believes. The GitLab platform stores backups of custom software created by users who develop it themselves, in teams, or using neural networks and agents.

“As more and more software development tasks are delegated to agents, the most valuable capability is one that can track the relationships between code, tests, access rights, incidents, and dependencies—and provide this context directly while tasks are being performed, — write Citrini analysts. — The opportunity for GitLab lies in moving from storing development history to controlling the work performed based on that history.”

Citrini also noted that investors should not write off Meta Platforms, whose stock has underperformed many of its competitors over the past year. The company has been criticized for excessive spending on AI, but analysts view its significant capital expenditures in this area as a strategic advantage. “Meta is taking the right approach to AI, which allows it to monetize GPUs more effectively than anyone else,” Citrini wrote in her note.

This article was AI-translated and verified by a human editor