Why I'm Avoiding This Popular AI Stock Despite Its Growth Story
There are much better AI stocks to invest in right now.
Overview
Many technology companies with significant exposure to artificial intelligence (AI) have crushed broader equities in recent years. That makes sense. The industry has experienced sustained demand with few signs of a slowdown. It may still be time to cash in on the AI boom, but not every AI stock is created equal. Sometimes, even when their financial results look excellent, it may be best for investors to look elsewhere. In my view, that's the case with Intel (NASDAQ: INTC), an AI company that has climbed about 330% over the past 12 months. Here's why I'd avoid this stock right now.
Image source: The Motley Fool.
Intel, one of the leading players in the server CPU (central processing unit) market, is cashing in on rising demand for its products amid the agentic AI boom. Consequently, the company's financial results have improved. In the second quarter, Intel's revenue was $16.1 billion, up 25% year over year. Intel's data center and AI operating segment performed even better. Its sales jumped to $6.3 billion, up 59% compared to the year-ago period. Furthermore, revenue grew much faster than expenses, resulting in stronger margins.
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Originally published at www.fool.com.