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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.
Uber has unveiled the terms of a hotly anticipated stock market float which it hopes will value the ride-hailing service at more than $91bn (£70bn). While the target is $10bn less than some bankers suggested the 10-year-old firm might be worth, the valuation is more than double the value of the 116-year-old carmaker Ford and would be the largest float by a US tech company since Facebook's in 2012. Its Wall Street debut will gauge investors' excitement about the prospects of a company that has expanded rapidly from taxi services into food delivery and is now investing billions in developing driverless cars. If it hits the mark, Uber will raise around $9bn in new funds and some early investors will make big profits. Despite the scale of ts ambition, Uber lost $1.8bn last year even while its revenues surged by more than 40% to $11.3bn.
Wall Street is buzzing over Alphabet's blowout June quarter financial results. Analysts are growing more confident over the prospects for many of Alphabet's emerging businesses including YouTube, autonomous cars and cloud computing. The internet giant reported better-than-expected second-quarter earnings Monday. It posted adjusted earnings per share of $11.75 versus the Wall Street consensus of $9.59 for the June quarter. Alphabet shares are up 4.3 percent in Tuesday's premarket session to $1,263.50.
The Fed's censure, according to the Journal, stemmed from concerns about Deutsche Bank's procedures for measuring its exposure to its clients and for valuing the collateral backing its loans. Regulators require efficient and accurate controls so that banks can assess their financial strength and the risks they face, especially through difficult times in the economy. Subpar controls could hamper Deutsche Bank's ability to pass two crucial upcoming tests in the U.S. The first is the Fed's stress tests, which are used to determine whether large banks can survive a severe economic downturn. Until now, only Deutsche Bank's small U.S. trust bank had gone through the tests – and even that failed. Commenting on the 2016 test, the Fed slammed the subsidiary for continuing "to have material unresolved supervisory issues that critically undermine its capital planning process."
Traders and financial professionals work at the opening bell on the floor of the New York Stock Exchange (NYSE). It's no secret on Wall Street that a "sell" recommendation in sell-side research reports is exceedingly rare, and it can't be chalked up to today's bull market recently surpassing its ninth birthday. According to FactSet data, only 6% of analyst recommendations on S&P 500 companies are "sell" ratings or the equivalent, lending credence to the notion that conflicts of interest persist despite reform efforts to make recommendations more objective in nature. Put simply, negative recommendations can place an analyst in the virtual penalty box when it comes to getting access to companies, and the effects are clear in a business where access is king. So, is there still use to looking through research reports to figure out which stocks are worth buying and selling?
When Mr. Dudley took the helm in 2009, the financial crisis had left the New York Fed's reputation as a regulator damaged. The institution had not done enough to address the severe weaknesses at the banks it oversaw, like Citigroup. Early on, Mr. Dudley commissioned a review of the New York Fed's bank supervision department and then overhauled it. But in 2012, JPMorgan Chase, also overseen by the New York Fed, suffered huge trading losses in what was known as the London Whale scandal. The New York Fed was faulted.
Nvidia reported earnings that beat expectations and showed that the company's focus on artificial intelligence is still paying off. For the past decade, Nvidia has been rising above graphics chips for gamers, expanding to parallel processing in data centers and lately to artificial intelligence processing for deep learning neural networks and self-driving cars. The company reported earnings per share of $1.33 (up 60 percent from a year ago) on revenue of $2.6 billion (up 32 percent), beating Wall Street's expectations. The company's stock price is up more than 100 percent in the past year on the popularity of artificial intelligence. But it slumped during the day on Thursday, along with the broader market.