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Stocks tied to the artificial intelligence frenzy might be trading at a premium, but that doesn't mean they're unattractive, according to JPMorgan. The AI trend has propelled stocks to new heights. This year alone, the two highest outperformers in the Magnificent Seven cohort Nvidia and Meta Platforms have climbed 90% and 44%, respectively. On the other hand, the underperformance of Tesla and Apple , each down 31% and 10%, also speaks volumes: The days of merely riding the wave of these Big Tech names seem to be over, and companies will have to start proving that they have a fundamental AI story. Indeed, JPMorgan analyst Samik Chatterjee noted that within the hardware and networking space, the "AI Group" of stocks is trading at a 60% premium compared to its historical trading average. For comparison, the non-AI group of stocks is only at a 10% premium. Overall, Chatterjee said that the AI cohort is trading at a 55% premium relative to the non-AI basket. While that may be the case, the top AI picks still remain attractive including a few names outside of the chip space, he wrote. In the same note, Chatterjee released a list of his top AI stock picks. One of Chatterjee's top AI picks is PC and server manufacturer Dell . The stock "trades at one of the most inexpensive multiples relative to the AI Group despite the robust premium relative to its own historical average," he wrote. The AI bull case for Dell, which JPMorgan rates as overweight, is around its GPU-based server sales, the analyst said. Dell has rallied roughly 47% this year. On March 1, shares surged 31% Dell's best day since its 2018 return to the stock market after the company beat earnings and revenue estimates in its latest quarter. The analyst also likes Arista Networks as an AI pick, which has a 50% revenue exposure to the cloud trend. The AI bull case for the company, which is also rated overweight, is tied to Ethernet adoption in back-end networks, Chatterjee said. Arista is also cheaper than its peers, trading at just a 28% premium versus a 60% average, the analyst said. Arista has soared 30% this year. Goldman Sachs analyst Michael Ng recently stated his confidence that the stock can outperform Wall Street's earnings predictions.

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These are JPMorgan's top AI stock picks outside of the chip space - CNBC