In this article, we will take a look at the 10 stocks that will make you rich in 2023.
To make money by investing in the stock market, one ought to follow time-tested investing principles with patience. But sometimes the market creates opportunities that have the potential to reward investors who are ready to ride the bandwagon of time. Artificial intelligence is the ultimate money-making bandwagon of 2023 and perhaps several years to come. While many believe AI is quickly becoming a hype and pushing stocks’ valuation to dangerous levels, there are credible analysts who still believe tech stocks have a long way to go in this AI revolution.
The AI Gold Rush
Wedbush’s Dan Ives recently said that the AI “gold rush” would be driving tech stocks higher in the second half of 2023.
“The 2nd, 3rd, and 4th derivatives of this A.I. Gold Rush are just starting to evolve for the tech landscape. As we have covered the tech sector for decades and saw the dot.com bubble and burst firsthand, [we believe] this is the start of a 4th Industrial Revolution playing out across tech over the coming years that is still being underestimated by the Street in our opinion,” Ives said during an interview with CNBC.
Not all bubbles are bad. Some bubbles have the potential to make investors rich and give them evergreen gains and long-term opportunities. SkyBridge Capital Founder Anthony Scaramucci, while talking to BNN Bloomberg, said that while AI is “probably in a bubble,” there are still some AI stocks that should be in investors’ portfolio. Anthony Scaramucci specifically talked about Nvidia, a stock many analysts believe has become overvalued amid its latest AI-driven performance. Scaramucci said that Nvidia may be overvalued currently “but if you own it for the next 15 years, you’ll probably be OK.”
One of the biggest reasons why AI stocks have the potential to gain further is the explosive potential and applications of generative AI. According to Bloomberg Intelligence, the generative AI market could expand by about 40%, to $1.3 trillion by 2032.
The AI Bubble and How to Make the Most of It
Billionaire investor George Soros’ thoughts on bubbles are interesting and have become highly relevant in the current backdrop. Soros in 2009 famously said:
“When I see a bubble forming, I rush to buy, adding fuel to the fire.”
In a detailed lecture in 2009, Soros explained his bubble theory. Soros thinks that a boom-bust cycle is set in motion when a trend and a misconception positively reinforce each other. Positive reinforcements keep inflating the bubble through positive feedbacks. This bubble is tested by market dynamics from time to time but if the trend is strong enough, it survives this test, according to Soros. This cycle enters what Soros calls the “twilight” stage when the trend begins to lose stream but nonetheless maintains inertia before eventually beginning to decline.
At what stage the current AI boom is? No one can say for sure but an overwhelming majority of market analysts believe the AI revolution is just getting started. To make money from this revolution, analysts recommend some stocks that are expected to ride the AI wave.
Our Methodology
In this article, we picked stocks that are expected to keep gaining value based on the AI hype and AI-related growth catalysts in 2023 and beyond, according to analysts.
Disclaimer: The stocks discussed in the article were selected using a consensus opinion-based approach, using credible analyst reports, websites and price estimates. However, there is no guarantee that these stocks will appreciate in value in future. The purpose of this article is news and education based on research.
Stocks That Will Make You Rich in 2023
10. SoftBank Group Corp. (OTC:SFTBY)
Number of Hedge Fund Holders: N/A
Japanese investment giant SoftBank Group Corp. (OTC:SFTBY) has not been much impressive over the past few years. Its Vision Fund has posted huge losses and its China investments have been painfully unprofitable. But SoftBank Group Corp. (OTC:SFTBY)’s chief Masayoshi Son recently announced the company is ready to shift to “offense mode” and benefit from the AI revolution.
“What I am interested in most, what I am working on most, is the AI revolution. I believe that mankind is going to be exceeded by computer or AI. We would like to be [in] the leading position for the AI revolution,” Son reportedly said.
SoftBank Group Corp. (OTC:SFTBY) is preparing to publicly list British semiconductor company ARM later this year. Analysts believe the move could give Softbank a huge AI-related boost.
Jefferies analyst Atul Goyal upgraded SoftBank Group Corp. (OTC:SFTBY) shares to Buy and said:
“We expressed a view that SBG stock will rally ahead of the ARM IPO later in the year… But given (the) market’s fascination for semi-stocks, we think it makes sense to move early.”
9. Palantir Technologies Inc. (NYSE:PLTR)
Number of Hedge Fund Holders: 31
Palantir Technologies Inc. (NYSE:PLTR) is going ballistic over AI and made headlines earlier this year by launching AIP, its AI platform for defense and military. Palantir Technologies Inc. (NYSE:PLTR) could become the go-to solutions provider for all things AI for defense and military applications. Palantir Technologies Inc. (NYSE:PLTR) has gained about 140% year to date through July 7.
Dan Ives counted Palantir Technologies Inc. (NYSE:PLTR) among the top companies he believes could gain from the AI market which he thinks could reach $800 billion over the next 10 years.
As of the end of the first quarter of 2023, 31 hedge funds tracked by Insider Monkey had stakes in Palantir Technologies Inc. (NYSE:PLTR).
8. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
Number of Hedge Fund Holders: 72
Some analysts believe Texas-based CrowdStrike Holdings, Inc. (NASDAQ:CRWD) could make investors rich in 2023 and beyond as the software company’s products are seeing huge demand. Recently, BTIG Research added CrowdStrike Holdings, Inc. (NASDAQ:CRWD) in its list of top picks for the rest of 2023. BTIG is bullish on CrowdStrike Holdings, Inc. (NASDAQ:CRWD) amid its dominance in the endpoint security/EDR market, high win rates against rivals like Microsoft, strong customer recognition, and successful performance in emerging product categories.
Morgan Stanley analysts recently said that AI has created a new opportunity in the cybersecurity domain. They believe AI-led automation in the industry could create $30 billion in productivity gains and much of those could go to a few companies including CrowdStrike Holdings, Inc. (NASDAQ:CRWD), Palo Alto Networks Inc. (NYSE:PANW) and Microsoft Corporation (NASDAQ:MSFT).
Artisan Developing World Fund made the following comment about CrowdStrike Holdings, Inc. (NASDAQ:CRWD) in its Q1 2023 investor letter:
“Top contributors to performance for the quarter included graphics semiconductor company Nvidia, Southeast Asian e-commerce platform Sea, Latin American marketplace MercadoLibre, online travel marketplace Airbnb, and endpoint security company CrowdStrike Holdings, Inc. (NASDAQ:CRWD). CrowdStrike rebounded as its financial results eased demand-related concerns in its core endpoint business, while adoption in platform adjacencies continued to rise.”
7. Tesla Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 82
Being a leader and first mover in the lucrative EV industry gives Tesla Inc. (NASDAQ:TSLA) an advantage that it keeps enjoying, thanks to Elon Musk’s relentless innovation and proactive approach. Tesla Inc. (NASDAQ:TSLA) has already gained about 155% year to date through July 7. Tesla Inc. (NASDAQ:TSLA) is gaining after the company posted Q2 delivery numbers. Tesla Inc. (NASDAQ:TSLA) delivered 466,140 electric vehicles in the second quarter of 2023, surpassing estimates of 445,000 units. This was an 83% year-over-year growth.
Wedbush Securities analyst Dan Ives said Tesla Inc. (NASDAQ:TSLA)’s price cuts earlier this year gave the company an advantage as demand of EVs remain strong.
Ives thinks Tesla Inc. (NASDAQ:TSLA) is on track to hit 1.8 million unit delivery milestone for 2023.
“With this delivery beat, we believe the sum-of-the-parts story for Tesla is another step towards coming into play with its newly released supercharger network OEM deals, energy business, AI driven autonomous path, unmatched battery ecosystem, and increased production scale/scope globally adding to the Tesla golden EV success story,” Ives said.
Ives has a $300 price target on Tesla Inc. (NASDAQ:TSLA). Cathie Wood of ARK, which has a $1.13 billion stake in Tesla Inc. (NASDAQ:TSLA), thinks Tesla shares could reach $3000 by 2025.
6. Palo Alto Networks Inc. (NYSE:PANW)
Number of Hedge Fund Holders: 87
Palo Alto Networks Inc. (NYSE:PANW) is another stock that analysts believe can ride the AI bandwagon. Goldman Sachs recently released its “Rule of 10” screen picks which include companies that have showed strong sales growth over the past couple of years and are expected to continue posting solid revenue growth. Palo Alto Networks Inc. (NYSE:PANW) made it to the list.
Palo Alto Networks Inc. (NYSE:PANW) is uniquely positioned to benefit from the AI boom. The company launched its platform XSIAM that uses automation and AI for information and cybersecurity. Palo Alto Networks Inc. (NYSE:PANW)’s CEO has a special focus on AI and the company is expected to see more growth based on its AI products. He said during fiscal Q3 earnings call in May:
“I think there is no doubt we will continue to deploy our proprietary AI models for XSIAM or for our network security use case as I highlighted. We believe in our preliminary analysis over the last three months and driving a lot of these work streams internally that there is a dare there with generative AI. So we believe that we will be deploying generative AI over the course of the next few months, and we’ll talk more about it At a later event. But we think that has an opportunity both to significantly improve our customer efficiency and the efficacy of our products, at the same time, also to drive efficiencies within the way we run Palo Alto Networks. I think last but not the least, which is something you didn’t ask, but I’ll say, separately, Lee and his team have been working hard to see and look at the adverse impact that generative AI could have in terms of adversaries using Generative AI to build new malware, to try and attack our customers.”
TimesSquare U.S. Mid Cap Growth Strategy made the following comment about Palo Alto Networks, Inc. (NASDAQ:PANW) in its Q4 2022 investor letter:
“Within Information Technology, Palo Alto Networks, Inc. (NASDAQ:PANW) offers network security solutions to enterprises, services providers, and government entities. The company delivered another strong quarter with revenues, billings, and earnings all above the consensus. Management recognizes a challenging macro environment that is altering customer behavior such as increased deal scrutiny and elongating sales cycles. Their shares pulled back by -15% during the quarter.”
5. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 131
Apple Inc. (NASDAQ:AAPL) is one of the evergreen stock picks that keeps on giving. Analysts believe Apple Inc. (NASDAQ:AAPL)’s soon-to-be-released iPhone 15 could see huge demand as there are over 250 million iPhones in the world that haven’t been replaced over the past four years. Apple Inc. (NASDAQ:AAPL) is also in the news due to its launch of Vision Pro mixed-reality headset. Wedbush’s Dan Ives recently said that the device is the first step in “generative AI-driven app ecosystem” for its installed base of more than 2 billion active devices of Apple Inc. (NASDAQ:AAPL). Ives thinks that Apple Inc. (NASDAQ:AAPL)’s fair valuation could be in the $3.5 trillion to $4 trillion range.
Ives estimates that Apple Inc. (NASDAQ:AAPL) could generate a whopping $100 billion in annual services revenue on double-digit growth this year. As of the end of the first quarter of 2023, 131 hedge funds tracked by Insider Monkey had stakes in Apple Inc. (NASDAQ:AAPL).
Manole Capital Management made the following comment about Apple Inc. (NASDAQ:AAPL) in its second quarter 2023 investor letter:
“Despite this, the S&P 500 is up 7% this year and the Nasdaq is up +11%. Technology rebounded from a challenging 2022 and many large tech companies are performing quite well this year. Through mid-May 2023, year-to-date performance of some of the most popular and largest names tech names is impressive. For tech companies with market capitalizations over $1 trillion, Apple Inc. (NASDAQ:AAPL) is up +35%, Microsoft +33%, Amazon +39%, and Google is +40%. In terms of contribution to the S&P 500’s year-to-date return, Apple and Microsoft represent roughly half of its 2023 performance. Apple, and Microsoft now account for 13.9% of the entire S&P 500 or 80% more concentrated than 2008. For additional perspective, Apple’s market cap is at $2.8 trillion and that is larger than the market cap of the entire Russell 2000. To conclude, it’s distinctly getting more concentrated at the top.
For our purposes, we are just going to focus on software digital wallets, as they are much more common and accessible. If you own an iPhone, then you have an Apple Pay pre-loaded digital wallet. If you have a Samsung phone, you have Samsung Pay available for use. Those two, along with Google Pay and PayPal, are the four most popular digital wallets today. According to the Payments Journal, PayPal has been used (over the last 12 months) by 62% of American consumers, followed by Apple Pay at 41% and Google Pay at 32%.
Digital wallets have tons of advantages, that we are embracing. When we attend Tampa Bay Lightning games, we love having our season tickets easily accessible on our phones (via the Apple Pay wallet), as well as our timed parking pass. When we travel, loading the airline ticket into our Apple Pay wallet is much more convenient than printing out a paper boarding pass. Others are using digital wallets to track their expenses, budget properly, and even help them easily pay their bills. Digital wallets are still in their infancy and have decades of future growth; we believe the smartphone is simply the best interface and platform for digital wallets…” (Click here to read the full text)
4. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 132
NVIDIA Corporation (NASDAQ:NVDA) shares have already gained about 194% year to date through July 7 but analysts believe the stock is poised to grow amid the AI boom. For now, NVIDIA Corporation (NASDAQ:NVDA) dominates the AI market when it comes to hardware and chips. Whenever a company decides to use or deploy generative AI apps like ChatGPT, chances are that they are giving money to NVIDIA Corporation (NASDAQ:NVDA) directly or indirectly since Nvidia’s chips are powering most of the mainstream AI systems.
Recently, Daiwa Capital’s Louis Miscioscia upgraded the stock to Outperform from Neutral citing his recent checks that show NVIDIA Corporation (NASDAQ:NVDA)’s strength in the AI domain. The analyst also upped his price target for NVIDIA Corporation (NASDAQ:NVDA) to $475 from $408.
The analyst said that NVIDIA Corporation (NASDAQ:NVDA)’s dominance is hard to match for competitors like Intel and AMD.
“Many reports suggest AMD/Intel GPUs are pretty darn powerful, they are, but it is not just about silicon, it is about everything combined,” Miscioscia said in a note.
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 220
Meta Platforms, Inc. (NASDAQ:META) is making headlines after its Threads app crossed 50 million users. Wells Fargo analyst Ken Gawrelski recently said that Meta Platforms, Inc. (NASDAQ:META) could see a long-term boost in revenue from the Threads app.
“Framing imminent launch of Instagram Threads, we see [opportunity] for incremental revenue and EPS contribution at maturity between 1-3% annualized,” Gawrelski said in a note.
The analyst thinks that the app could create an additional 13 to 64 cents per share on an annualized basis for Meta Platforms, Inc. (NASDAQ:META).
ClearBridge Large Cap Value Strategy made the following comment about Meta Platforms, Inc. (NASDAQ:META) in its first quarter 2023 investor letter:
“The standout contributor for the quarter was Meta Platforms, Inc. (NASDAQ:META), which we bought in the fourth quarter of 2022. We still feel good about Meta shares after the rally, with positive drivers that we found attractive in late 2022 — large scale advantages in driving user engagement, the ability to invest in tools to monetize its audience, cost discipline and a strong balance sheet — still in play.”
2. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 243
Amazon.com, Inc. (NASDAQ:AMZN) would benefit from the AI revolution in a variety of ways. Amazon.com, Inc. (NASDAQ:AMZN)’s AWS business offers various technologies that help companies take advantage of the true powers of generative AI. Bank of America recently shared its list of top growth and value picks for July. Amazon.com, Inc. (NASDAQ:AMZN) made it to the growth picks list.
Last month Amazon.com, Inc. (NASDAQ:AMZN) shares gained after Loop Capital analyst Rob Sanderson said he expects the slowdown of AWS to “bottom in the next 2-quarters.” The analyst said that generative AI will accelerate the recovery of AWS.
AWS recently revealed that it will invest $100 million in AWS Generative AI Innovation Center, a new program to help customers build and deploy generative artificial intelligence solutions.
Alphyn Capital Management made the following comment about Amazon.com, Inc. (NASDAQ:AMZN) in its second quarter 2023 investor letter:
“In my 2002 Q4 letter, I outlined quantitative reasoning for why I believe the company’s financials mask its true earnings power. More qualitatively, Amazon.com, Inc. (NASDAQ:AMZN) continues to make strategic strides that enhance its appeal as an investment. Firstly, Amazon’s willingness to streamline costs and shutter underperforming initiatives demonstrates prudent financial management. The company’s overhaul of its fulfillment network, transitioning from a national to a regional model, will improve efficiency and delivery speed, resulting in lower costs and increased customer satisfaction, both critical drivers of revenue growth. Second, Amazon’s unparalleled scale, leading e-commerce platform position, and technology investments attract advertisers eager to engage with its vast customer base and provide consumers with highly targeted ads. This strategy has propelled Amazon’s advertising business to surpass broader market trends. Finally, Amazon remains a long-term growth entity. With retail, 80% of shopping is still offline, and Amazon has been steadily expanding its business sales (currently at $35 billion) and international presence. With AWS, despite near-term conservative enterprise spending, 90% of global IT spending remains on-premise. With other bets, Amazon has ambitious forays into diverse sectors such as grocery, healthcare, and satellite internet connectivity.”
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 289
Microsoft Corporation (NASDAQ:MSFT) is one of the best stocks to ride the AI wave. Microsoft Corporation (NASDAQ:MSFT) has gained about 41% year to date through July 7. Analysts believe Microsoft Corporation (NASDAQ:MSFT) still has a lot of room to run as the company is just getting started with its AI launches. Microsoft Corporation (NASDAQ:MSFT)’s partnership with OpenAI, its integration of AI with Bing search engine and Office products and other ambitious AI ventures are expected to bear fruit in the weeks and months to come.
Morgan Stanley’s Keith Weiss recently said in a note that Microsoft Corporation (NASDAQ:MSFT) enjoys a “pole position” in the AI race and is best positioned in the enterprise software space to benefit from the generative AI opportunity. The analyst upped his 2025 earnings per share estimate for Microsoft Corporation (NASDAQ:MSFT) to $13.84 from $13.59 and also increased his price target for the stock to $415, which implies a $3 trillion market cap for the company.
Microsoft Corporation (NASDAQ:MSFT) is also the most popular stock among the 943 hedge funds tracked by Insider Monkey.
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Disclosure: None. 10 Stocks That Will Make You Rich in 2023 is originally published on Insider Monkey.
