1 Super Tech Stock (Besides Nvidia) to Buy Hand Over Fist in 2024

Some AI stocks are getting more attention than others, but many may have exhausted the bullish potential of the first-wave optimism about AI.

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Different artificial intelligence (AI) stocks have experienced different levels of market success. While hardware stocks necessary for training AI models are surging now, the tide may shift in favour of other AI-oriented businesses, including consultancy and support firms that may actually help the tech world embrace and integrate AI into their operations. One such tech stock from Canada is CGI (TSX:GIB.A).

This stands in stark contrast to AI giants like Nvidia, which has ridden the AI hype train to the highly exclusive, trillion-dollar club. While companies like Nvidia will most likely be responsible for major AI breakthroughs, smaller players like CGI may also serve an important role in the AI revolution — i.e., helping the corporate world embrace AI correctly.

The company

Even though its market share is smaller than the other giants, the Montreal-based CGI is counted among the world’s 20 largest IT consultancy firms. It precedes the internet and has been around since 1976.

As a leader in both business and IT consultancy, CGI is ideally positioned to help companies to answer important questions regarding IT adoption and integrations, which includes choosing the right AI tools and identifying the right areas of overlap.

However, consultancy makes up less than 50% of its business (about 45%), and the rest is managed services. Introducing a range of AI and new, market-relevant services into the mix may allow CGI to explore new growth opportunities.

The stock

While it hasn’t been the most consistent or impressive grower in the last five years (particularly for a tech stock), its long-term growth numbers are quite decent. The stock has returned over 316% to its investors in the past ten years through price appreciation.

However, this growth slowed down in the last five years, with returns (for that period) shrinking to 56%, though still capable of doubling your capital in a decade.

The stock is going through a bear market phase, while the rest is bullish. It has fallen over 9% in a little over two weeks. But this has strengthened its valuation, making it a more compelling buy.

The discount may be temporary as the company has no major fundamental or financial weaknesses, and the recovery-fueled growth may gain enough momentum to match its long-term growth pace.

Foolish takeaway

The CGI stock isn’t in the limelight right now, at least not in the same way as Nvidia. However, the stock may have a lot of untapped potential that the current market dynamics and the AI boom may help unleash.

Buying it now, discounted and undervalued compared to the other tech stocks, may help you get the most out of its next bullish phase.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends CGI and Nvidia. The Motley Fool has a disclosure policy.

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