AI, artificial intelligence, is taking the economy by storm because of the opportunity it provides. Among the benefits are improved efficiency, fraud detection, and robotic automation that add up to cost-saving, margin, and profits. The business applications are virtually endless, including fintech and investing, which is excellent news for investors. AI can help investors process data, assess risk, manage portfolios, and maximize profits, which is the ultimate goal. The questions to be answered include who is leading the technology and how investors connect with it.
Advanced Micro Devices is the NVIDIA of fintech accelerators
Advanced Micro Devices (NASDAQ: AMD) confirmed the market’s expectations when it released Q3 results. The company expects to see $2 billion in sales for its MI300 line of chips in the first year, which could be the tip of the iceberg. While the MI300 is the biggest news for the quarter, the company made other advances as well. The Alveo UL3524 fintech accelerator is among them, and 1 that promises to improve trading functionality for individual investors, managers, brokers, and platforms.
The Alveo UL3524 is an ultra-low latency accelerator card built on a new FPGA architecture. The new array provides 7X greater performance with the high-volume data loads associated with market function. Latency is reduced to less than 3ns, and other benefits are present, including custom algorithms (devs can apply their own AI models) and multiple applications. Applications include algorithmic trading, risk analysis, and data delivery.
The details of the Q3 report were met favorably by the market. Shares of AMD surged 16% for the week, confirming a bottom at the $95 level. The bottom is reinforced by the analysts who see this stock trading at about 20% and near the 2023 highs. Assuming the company can gain traction with its fintech accelerator or other AI projects, it could easily surpass that level.
Blue chip fintech Charles Schwab leans into AI
A fintech before fintech was cool, The Charles Schwab Co. (NYSE: SCHW) is leaning into AI and offering a variety of intelligent platform tools. Tools include automated investing and analytical tools that help find high-probability investments. Services include tax harvesting, which targets the most opportune times to sell equities for minimal tax impact. The only downside is the minimum portfolio requirement of $5000, a barrier for many investors. The company is a potential buyer of AMD’s Alveo UL3524 accelerators.
Shares of SCHW imploded earlier this year due to the banking crisis. The takeaway is that Charles Schwab’s business remains solid, and a floor is in for the market. The analysts began upping their price targets following the Q3 earnings release, and the range of targets suggests a double-digit upside potential. The low price target of $53 is just below the current action, providing a floor, and the consensus midpoint equals a 25% gain, providing an attractive risk-reward profile.
Shares of SCHW show a solid floor at the $50 level. The market is confirming that level with a large green candle supported by the indicators. The MACD and stochastic are consistent with the floor and set up to fire a reversing signal. In this scenario, the stock could easily move back to the summer highs by the end of the year.
UiPath automates everything
UiPath (NYSE: PATH) isn’t a fintech-specific AI company, but it is 1 that will have a far-reaching impact on it. The company leverages robotic process automation (digital bots) with AI’s cognitive functions to improve and enhance workflows, including finance. The company’s bots can automate any repetitive task, including trading algorithms, and it has connectivity with most major cloud providers, including Microsoft Azure, AWS, and Google. Hence, the potential for applications is near limitless.
UiPath is growing at a solid 18% pace in 2023, and growth is accelerating. The analysts forecast another 18% growth in 2024 and may be underestimating the company’s strength. They see the stock trading 18% higher at the Marketbeat.com consensus figure, and the consensus figure is trending upward. Assuming this continues, the stock should edge higher and retest resistance at the top of the 2023 trading range if not set a new high.