Everyone is talking about artificial intelligence (AI) right now- with many predicting that AI will lead the next wave of economic growth and productivity for the next couple of decades at least. AI refers to the use of data to simulate human intelligence processes including learning, reasoning and self-correction by machines. AI is making its way into almost every industry. With IDC predicting that worldwide spending on AI will be nearly $98 Billion in 2023, the implications of this technology are massive. And this has not been ignored by Wall Street.
Artificial intelligence (AI) is a buzzword in tech these days. The term, which encompasses a range of technologies including machine learning and data analysis. The goal is to create systems that can perceive, learn, and reason in ways that mimic human capabilities. At its best, AI will allow machines to understand the gestalt of a situation and react accordingly, a capability that humans take for granted – but has tends to elude computer systems, which in their turn excel at analyzing minute details. A wide range of tech companies are working on AI systems; artificial intelligence holds the promise of real-time data analysis and situation monitoring, with the machines capable of handling routine decisions. While it hasn’t been achieved yet, the outlines of success are visible on the horizon. Every smart investor knows to keep his eyes on the horizon; that is, to plan every investment with long-range intentions. Just how long is up to the individual, but most investors agree that a move isn’t long-term unless it’s held for more than one year. Warren Buffett has famously said, “If you are not willing to own a stock for 10 years, do not even think about owning it for 10 minutes.” With this in mind, we used TipRanks' database to identify three AI stocks that have been highlighted by some of Wall Street’s best tech sector analysts. These are analysts with 5-star ratings, standing above their peers in accuracy and average returns – and they’ve tapped Artificial Intelligence as a tech segment for the long run. Veritone, Inc. (VERI) We’ll start with Veritone. This media tech company offers a cloud-based operating system for AI that uses machine learning to turn data into useful intelligence. The software allows users to process audio and video in real time, enhance analytics and research apps, reduce content review times, and streamline time spent on ‘low-value, high-effort’ tasks. The value of the product to the customers can be seen in the quarterly earnings trends and the share appreciation. The last six months – covering the worst of the global pandemic and economic recessionary pressures – have seen VERI’s earnings steadily improve and the share price rise to its best level in over two years. Earlier this month, Veritone showed its confidence by adjusting its Q2 revenue guidance upwards. The guidance, of $13.1 to $13.3 million, is well above the previous upper guide of $12.2 million. The share price has tracked the gains in revenue and earnings. The stock has more than doubled since the February/March market collapse, rising from $3.03 to $10.83 now. Patrick Walravens, writing from JMP Securities, was impressed by Veritone’s new revenue guidance, and reiterated his Buy rating on the stock. In his comments, he said, “Veritone seems to be gaining traction in its Government, Legal, and Compliance verticals as it experienced record bookings in the quarter… we believe the company is moving its cost structure in the right direction with recent cost-reduction initiatives and upgrades…” With his $17 price target, Walravens shows his own confidence that VERI will see 57% growth in the year ahead. (To watch Walravens’ track record, click here) Overall, VERI’s Moderate Buy analyst consensus rating is based on 4 Buys and just a single Sell. The stock’s current price is $11.80, and the average price target $16.25 suggests it has a 50% upside potential. Note that even the low-ball target estimate, of $15, is well above the current price. (See Veritone stock analysis on TipRanks) ZoomInfo Technologies (ZI) Next up is ZoomInfo, a marketing tech company. ZI offers the usual features and services that customers expect in digital marketing intelligence, including account management, data management, demand generation, and lead prospecting. The company’s AI cloud software is specifically designed to improve efficiency in these tasks, letting sellers get to the business of selling. ZoomInfo is a newly public company, having held its IPO just this past June. The opening was a success, with share prices almost doubling on the first day and nearly tripling in the first few trading sessions. Even now, after nearly two months during which the initial excitement waned and the glow came off the rose, the stock is still trading 88% above its initial price of $21. The strong IPO prompted SunTrust Robinson analyst Terry Tillman – who is rated in the top 10 of the TipRanks analyst database – to initiate coverage of the stock with a Buy rating. Tillman wrote of ZoomInfo, “We believe ZoomInfo represents a rare combination of strong top-line growth and best-in-class profitability. Its go-to-market (GTM) sales intelligence platform drives positive outcomes for B2B sales and marketing organizations - increasing leads, customers and revenue. Premium valuation justified owing to accelerating demand for GTM intelligence and company-specific drivers leading to significant revenue and profit upside.” Tillman’s Buy rating comes with a $60 price target, implying an impressive 51% upside potential. (To watch Tillman’s track record, click here) ZoomInfo holds a Moderate Buy rating from the analyst consensus. This is based on 16 reviews, including 7 Buys and 9 Holds. The stock’s $55.07 average price target suggests it has room for 32% growth from the $41.66 trading price this year. (See ZoomInfo stock analysis on TipRanks) CareDx (CDNA) Last on today’s list is a tech company in the health care sector. CareDx develops and delivers diagnostic surveillance systems for heart transplant patients. The company’s AI-powered software monitors patient progress in real time, allowing both the patient and the doctors to respond to any rapidly changing health issues in time to ensure a more successful outcome. The result is a novel development in long-term care. While CareDx’s products were originally designed to monitor heart transplants, the company has expanded. Its products now monitor most human organ transplants – including kidneys, an important niche, as the first successful organ transplant was conducted with a kidney, and this procedure is still among the most common of transplants. CareDx also has cloud-based AI systems to monitor lab results, and to connect digital implants with remote monitors. The company’s earnings have proven mostly immune to recent economic instability, as medical transplant patients and doctors cannot simply stop using the monitoring systems. And with a firm user base, the stock recovered well from the late-winter market crash. CDNA is up over 130% since bottoming out in March. Covering the stock for Piper Sandler, analyst Steven Mah wrote, “We believe CareDx has the broadest transplant care platform in the industry and we remain confident that it is well-positioned to protect and extend its first-mover advantage in both pre- and post-transplant patient management to drive long-term growth. In addition, we are encouraged by the resiliency of its essential tests and ability to operate in a COVID-19 environment.” Mah gives CDNA a Buy rating, along with a $54 price target that implies an upside of 66% for the next 12 months. (To watch Mah’s track record, click here) All in all, with 4 recent reviews on record, all Buys, CareDx has a unanimous Strong Buy rating from the analyst consensus. The stock is currently selling for $32.59, and the average price target, at $42.75, suggests a one-year upside of 31%. (See CareDx stock-price forecast on TipRanks) To find good ideas for tech stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Artificial intelligence (AI) is a buzzword in tech these days. The term, which encompasses a range of technologies including machine learning and data analysis. The goal is to create systems that can perceive, learn, and reason in ways that mimic human capabilities. At its best, AI will allow machines to understand the gestalt of a situation and react accordingly, a capability that humans take for granted – but has tends to elude computer systems, which in their turn excel at analyzing minute details. A wide range of tech companies are working on AI systems; artificial intelligence holds the promise of real-time data analysis and situation monitoring, with the machines capable of handling routine decisions.
Sometimes, a new technology will change the world forever. 5,000 years ago, a nameless Sumerian started marking clay tablets with a stylus, and invented writing; a little over three centuries ago, the steam engine took its place in our lives; early in the last century, Henry Ford came up with the assembly line. There’s no telling what innovation will prove to be game-changing; but it is possible to narrow the field down. And that brings us to AI. Artificial Intelligence, AI, may just be the next big idea. It’s not quite new – computer scientists and programmers have been working on ‘intelligent machines’ since the 1950s, at least – but the tech is finally maturing, and autonomous computers, capable of collating data and making decisions in real time, are no longer a pipe dream. The implications are staggering. Practical AI makes it possible for machines to learn, and to apply that learning. AI programs underly advanced voice and facial recognition systems and fraud detection programs, applications that depend on pattern recognition. More advanced AI is being applied to the automotive industry, where it is used to monitor automobile systems in real time – and to permit driverless vehicles. And this has not been ignored by Wall Street. Analysts say that plenty of compelling investments can be found within this space. With this in mind, We’ve opened up TipRanks’ database, and pulled three AI stocks that are on the leading edge of the technology. Importantly, all three earn Moderate or Strong Buy consensus ratings from the analyst community, and boast considerable upside potential. TuSimple Holdings (TSP) The first AI stock we’re looking at here, TuSimple Holdings, is deeply involved in the autonomous vehicle industry. The company is working on AI systems that will power self-driving trucks, allowing for greater efficiency and safety in the long-haul trucking industry. TuSimple has developed an advanced autonomous driving system specifically for the needs of the trucking industry; the company’s AI backs a long-range perception system that can spot, recognize, and identify objects as far away as 1,000 meters. In another achievement, TuSimple last summer launched an Autonomous Freight Network, through which the company will address the trucking industry’s challenges. TuSimple’s AI tech will allow the company’s trucks to conduct long-haul freight runs. The AI will monitor sensor systems to keep the truck on the road, and navigate to the destination – in all weather, and even in traffic conditions. To raise capital, TuSimple held its IPO last month, offering 33.75 million shares to the public at $40 per share. Of those shares, 27 million were offered by the company, with an existing shareholder putting 6.75 million shares on the market. TuSimple received the proceeds from the shares it sold directly, totaling over $1.08 billion before expenses. Writing from Canadian investment bank RBC, analyst Joseph Spak notes that TuSimple is highly speculative – but that if it succeeds, the rewards will be enormous. “We understand concerns about vetting the technology, adoption and the path towards revenue and profitability. But if TuSimple succeeds, the equity value is significantly higher. As such, we view TuSimple very much like a venture investment in the public markets or perhaps, a biotech stock. The upside opportunity is massive. Proof points (milestones, orders) along the way should increase the market’s confidence in TuSimple’s mid-term targets and long-term opportunity, thereby increasing its stock price,” Spak explained. In line with his comments, Spak rates TSP an Outperform (i.e. Buy), and sets a $52 price target that suggests an upside of 44% in the next 12 months. (To watch Spak’s track record, click here) Overall, TuSimple personifies everything that risk-loving investors want in the stock market. It uses cutting edge tech; it has staked out a position in a field that is not quite here, but is coming; and it’s an early adopter. While still in early stages of building out its products and AI systems, the stock has attracted 7 analyst reviews – 6 to Buy, and 1 to Hold – giving it a Strong Buy consensus rating. The shares are selling for $36.08, and their $54.70 average price target imply a one-year upside of ~52%. (See TSP stock analysis on TipRanks) Nvidia Corporation (NVDA) Next up, Nvidia, is one of the giants of the silicon microprocessor industry. These are the computer chips that make all of the high tech systems possible. Nvidia was the eighth largest chip maker last year, with more than $16 billion in total sales, up 53% from the year before. Nvidia’s chief connection to AI is through the automotive industry. The company has long sold chips to car makers – automotive business makes up between 5% and 10% of Nvidia’s sales – but the car makers over the past year have been ordering more AI capable systems. Nvidia delivers chips and associated packages that allow an autonomous vehicle’s AI system to build perception, mapping, planning, and monitoring capabilities. Nvidia is working on transferring its automotive AI systems into the data center segment; the monitoring needs of large server stacks are comparable to those of autonomous vehicles, and will benefit from the application of machine learning. Covering NVDA for Baird, 5-star analyst Tristan Gerra rates the stock an Outperform (i.e. Buy) along with an $800 price target, which implies ~45% upside. The bull thesis is based on "Nvidia’s strong near-term positioning in AI data center markets and longer-term opportunities across many accelerated computing applications." (To watch Gerra’s track record, click here) "As Nvidia increasingly moves to platform solutions targeting and enabling all AI markets, while diversifying its architecture offering, the company is poised to over time dominate data center. Omniverse gives us an early glimpse of a virtual 3D world which Nvidia is at the forefront and ultimately yielding to a matrix computing world. More near term, GTC-announced foray into CPUs will expand Nvidia's computing TAM," Gerra opined. Overall, no fewer than 27 analysts have put reviews on NVDA on record, and of those, 24 are to Buy against just 3 to Hold. NVDA shares are selling for $550.34; the average price target of $682.20 implies an upside of 24% from that level. (See Nvidia stock analysis on TipRanks) Upstart Holdings (UPST) We’ll finish in financial tech, where Upstart Holdings has applied AI technology to power a lending platform. Using AI, the company aims to evaluate borrowers to determine actual risk levels and creditworthiness. A clearer understanding of the natural risks of lending money will allow lenders to approve more transactions, give otherwise marginal borrowers greater access to capital, and provide cost savings on both ends. Upstart boasts that its AI analysis platform has helped more than 698,000 customers to acquire loans, and that its model provides for 27% more loan approvals than traditional credit-scoring methods. Upstart’s AI evaluates 1,600 data points, and results in borrowers accessing funds at 16% lower rates than would otherwise be possible. The company has been in business since 2012, and went public on the NASDAQ in December of 2020. The IPO saw the company make 9 million shares made available to the public at $20 each, raising $180 million. In March of this year, Upstart released its first quarterly report as a publicly traded entity. The company reported $86.7 million in total revenues, up 39% from one year earlier. Of that total, $84.4 million was derived from usage fees. For the full year 2020, Upstart saw a 42% yoy increase in revenue, to $233.4 million. Among the bulls is Piper Sandler analyst Arvind Ramnani, who is impressed by both the company’s model, and its forward prospects. "We expect Upstart to expand its market share well beyond its primary product focus of unsecured personal loans, and its recently announced auto loans... Key to Upstart’s AI offering is its a) inherent training data advantage backed by the >1,620 variables aggregated to inform their models; b) AI algorithms that have been extensively tested and refined; c) Over 10.5M discrete repayment events that further validate the data and algorithms. Upstart’s SaaS-based revenue model (only ~1% balance sheet loan exposure) has the ability to deliver upside to our 58% CAGR (2020-2023E), in a massive market ($700B NT; $3.4T LT opportunity),” Ramnani opined. To this end, the analyst rates UPST shares an Overweight (i.e. Buy), and his $143 price target implies an upside of 65%. (To watch Ramnani’s track record, click here) Let’s take a look at how the rest of the Street sees 2021 panning out for UPST. Based on 4 Buys and 2 Holds, the stock has a Moderate Buy consensus rating. The average price target is $123.50 suggesting a 34.5% upside potential from the trading price of $91.82. (See UPST stock analysis on TipRanks) To find good ideas for AI stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
Facebook and Micron are among the favorite ways to play the boom in artificial intelligence, according to top technology analysts. Here are five favorite AI stocks recommended by the best-performing technology analysts. In 2017, Microsoft changed its strategy from a "mobile-first and cloud-first world" to "an intelligent cloud and an intelligent edge infused with AI." And this strategy shift seems to be paying off. The company is now one of the leaders in AI, and has just teamed up withl Amazon to offer developers new tools to develop and share open source AI software.