12 Best AI Stocks To Buy Now

Published on September 6, 2022 at 3:18 pm by Hamna Asim in Hedge Funds, News

In this article, we discuss 12 best AI stocks to buy now. If you want to see more stocks in this selection, go directly to 5 Best AI Stocks To Buy Now.

In 2021, the global artificial intelligence market was valued at $328.34 billion. The market is expected to grow from $387.45 billion in 2022 to $1,394.30 billion by 2029, at a CAGR of 20.1% during the forecast period. Amid the COVID-19 pandemic, Fortune Business Insights predicted that demand for AI skyrocketed about 150% in 2020 compared to 2019.

Josh Pokrzywinski, the industrial research director at Morgan Stanley, released a report this summer called “The Deflation Enablers”, which highlights how corporations allocate capital expenditure amid a high interest rate period. The Morgan Stanley report suggests that big enterprises will invest in artificial intelligence, clean energy, robotics, software innovation, and clean commercial heating and air conditioning advancements that can rapidly lead to efficiency savings. The prices for these technologies are dropping swiftly, which implies that goods and services using these technologies will be notably cheaper over the next multiple years.

The use of artificial intelligence has not penetrated the market completely yet, and it is advancing the fields of biotechnology and pharmaceutical development, according to Morgan Stanley analyst Vikram Purahit. AI enables companies to eliminate unpromising processes quickly, slashing time for preclinical drug development as much as 75%, and lowering early-stage development costs by up to 50%. As AI becomes increasingly important in multiple applications, some of the best AI stocks to buy now include Coupa Software Incorporated (NASDAQ:COUP), Autodesk, Inc. (NASDAQ:ADSK), and DocuSign, Inc. (NASDAQ:DOCU).

Photo by lucas law on Unsplash

Our Methodology

To make this list of best AI stocks to buy, we selected artificial intelligence stocks with market capitalization of under $50 billion as of September 5. These securities have potential to grow exponentially as the demand for AI becomes mainstream. These stocks display positive growth catalysts, healthy full-year guidance, optimistic analyst ratings, and strong hedge fund sentiment as of Q2 2022.

We have arranged the list according to the hedge fund sentiment around the securities, which was assessed from Insider Monkey’s Q2 2022 database of about 900 elite hedge funds.

Now, let’s start our list of 10 best artificial intelligence stocks to buy.

Best AI Stocks To Buy Now

12. CCC Intelligent Solutions Holdings Inc. (NYSE:CCCS)

Market Capitalization as of September 5: $5.746 billion

Number of Hedge Fund Holders: 10

CCC Intelligent Solutions Holdings Inc. (NYSE:CCCS) was founded in 1980 and is headquartered in Chicago, Illinois. The company offers a SaaS platform with cloud, mobile, AI, telematics, hyperscale technologies, and applications for the property and casualty insurance industry. CCC Intelligent Solutions Holdings Inc. (NYSE:CCCS) specializes in the digitization and simplification of mission-critical AI-enabled workflows.

The company expects Q3 revenue to come in at between $194 million to $196 million. CCC Intelligent Solutions Holdings Inc. (NYSE:CCCS) sees FY 2022 revenue of $773 million to $777 million, versus the previous forecast of $763 million to $771 million. The consensus revenue estimate is $768.29 million.

Piper Sandler analyst Arvind Ramnani on August 8 initiated coverage of CCC Intelligent Solutions Holdings Inc. (NYSE:CCCS) with a Neutral rating and an $11 price target. The analyst likes the business and CCC Intelligent Solutions Holdings Inc. (NYSE:CCCS)’s value proposition, but is waiting for a more attractive entry point into the shares.

According to Insider Monkey’s data, CCC Intelligent Solutions Holdings Inc. (NYSE:CCCS) was part of 10 hedge fund portfolios at the end of Q2 2022, compared to 12 funds in the last quarter. David Zorub’s Parsifal Capital Management is the leading stakeholder of CCC Intelligent Solutions Holdings Inc. (NYSE:CCCS), with 3.18 million shares worth $29.3 million.

In addition to Coupa Software Incorporated (NASDAQ:COUP), Autodesk, Inc. (NASDAQ:ADSK), and DocuSign, Inc. (NASDAQ:DOCU), CCC Intelligent Solutions Holdings Inc. (NYSE:CCCS) is one of the best artificial intelligence stocks to buy now.

11. UiPath Inc. (NYSE:PATH)

Market Capitalization as of September 5: $8.77 billion

Number of Hedge Fund Holders: 24

UiPath Inc. (NYSE:PATH) is a New York-based company offering an end-to-end automation platform specializing in robotic process automation solutions. The platform uses artificial intelligence, combined with desktop recording, back-end mining of human activity and system logs, and intuitive visualization tools. For FY 2023, UiPath Inc. (NYSE:PATH) expects a revenue of about $1.085 billion-$1.09 billion, while ARR will range between $1.22 billion to $1.225 billion. Wall Street consensus estimates for FY23 revenue stand at $1.09 billion.

UiPath Inc. (NYSE:PATH) made it our list of the best AI stocks to buy as it recently announced a strategic acquisition which will improve its market position. On August 1, UiPath Inc. (NYSE:PATH) disclosed the acquisition of the UK-based natural language processing company, Re:infer. The firm’s no-code interface enables corporate users to train their own AI models for higher specificity and flexibility. This will help UiPath Inc. (NYSE:PATH)’s software robots to understand email context and semantics, online chats, and voice sessions to enhance customer service.

On July 7, Canaccord analyst Kingsley Crane initiated coverage of UiPath Inc. (NYSE:PATH) with a Buy rating and a $25 price target. The analyst is bullish on UiPath Inc. (NYSE:PATH)’s ability to employ automation in a wide set of use cases and expects partners, like EY and PwC, to allow it “critical sales leverage”.

According to the second quarter database of Insider Monkey, 24 hedge funds were bullish on UiPath Inc. (NYSE:PATH) with stakes worth $1.27 billion, compared to 33 funds the prior quarter worth $1.30 billion. Cathie Wood’s ARK Investment Management is the leading position holder in the company, with 37.6 million shares worth $641.75 million.

Here is what ClearBridge Investments has to say about UiPath Inc. (NASDAQ:PATH) in its Q2 2021 investor letter:

“We participated in the IPO of UiPath, a developer of software for robotic process automation that uses AI, natural language processing and design to streamline complex processes across a variety of technology environments. The company is an industry leader with a superior solution for leveraging software to optimize workloads. Organizations around the world are beginning to understand the power of automation, with momentum picking up toward fully automating business processes, a $60 billion market today that could grow to $200 billion or more by 2030. UiPath has a unique pricing model, broad partner ecosystem and thoughtful management team supporting one of the strongest growth profiles in technology. Risks we are watching include a partial cloud transition ahead and increased competition from larger software platforms over time.”

10. Palantir Technologies Inc. (NYSE:PLTR)

Market Capitalization as of September 5: $15.275 billion

Number of Hedge Fund Holders: 26

Palantir Technologies Inc. (NYSE:PLTR) is a Colorado-based company that builds AI-enabled software platforms for the intelligence community in the United States for terrorism investigations. While government demand in the near term remains muted, Palantir Technologies Inc. (NYSE:PLTR) is a significant long-term artificial intelligence play as US-China tensions mount. It’s one of the most popular AI stocks and ranks 10th in our list of the best AI stocks to buy.

The Q2 2022 catalysts include the customer count increasing to 304 from 169 year over year, new products such as Edge AI, HyperAuto, OPIs, Cosmos, and Pipeline Builder, and a broader developer community. The 3-year revenue CAGR is 41% and Palantir Technologies Inc. (NYSE:PLTR) has a very large total addressable market, making it one of the best artificial intelligence stocks to buy.

Jefferies analyst Brent Thill on August 8 maintained a Buy rating on Palantir Technologies Inc. (NYSE:PLTR) but lowered the price target on the shares to $12 from $13. While the company lowered the full-year guidance due to slow government spending, the analyst believes Palantir’s Commercial unit “continues to deliver” and that its profitability is improving.

Among the hedge funds tracked by Insider Monkey, Jim Simons’ Renaissance Technologies is the leading stakeholder of Palantir Technologies Inc. (NYSE:PLTR) as of Q2 2022, with 28.20 million shares worth $255.8 million. Overall, 26 hedge funds were long Palantir Technologies Inc. (NYSE:PLTR) at the end of June, compared to 36 funds in the prior quarter.

Here is what Tao Value has to say about Palantir Technologies Inc. (NYSE:PLTR) in its Q4 2021 investor letter:

“We have no new position this quarter and have made below changes to our portfolio. We also sold Palantir (PLTR) as I identified it subject to high retail bubble risk (using above method) and are not part of our core “Mindful Compounder” holdings.”

9. Alteryx, Inc. (NYSE:AYX)

Market Capitalization as of September 5: $4.161 billion

Number of Hedge Fund Holders: 33

Alteryx, Inc. (NYSE:AYX) is a California-based company that provides data analytics and process automation solutions. The Alteryx APA Platform aims to enable organizations to democratize data, automate processes, and enhance analytic capabilities, creating a robust foundation for using artificial intelligence, machine learning, analytics, and related data. Alteryx, Inc. (NYSE:AYX) is part of our best AI stocks to buy since it beat market estimates on revenue and earnings in Q2, and raised its Q3 guidance. The revenue is expected to be in the range of $191 million to $194 million, representing a year-over-year growth of 55% to 57%. The consensus estimate is $173.63 million.

On August 15, Needham analyst Mike Cikos raised the price target on Alteryx, Inc. (NYSE:AYX) to $80 from $68 and reiterated a Buy rating on the shares. The analyst said that the management is focused on the company-specific initiatives for ELAs, Partners, and Cloud. He added that while Alteryx, Inc. (NYSE:AYX) has not been impacted by the macro environment, the company has been cautious in terms of guidance to factor in variables such as pipeline coverage, new business generation, renewal rates, and churn.

Among the hedge funds tracked by Insider Monkey, 33 funds were bullish on Alteryx, Inc. (NYSE:AYX) at the end of Q2 2022, up from 31 funds in the last quarter. Brian Bares’ Bares Capital Management is the leading stakeholder of the company, with 4.3 million shares worth $207.8 million.

In its Q3 2020 investor letter, Alger Small Cap Focus Fund highlighted a few stocks and Alteryx Inc. (NYSE:AYX) was one of them. Here is what the fund said:

“Alteryx is the market leader in analytic process automation, or APA. Through its APA platform, Alteryx unifies analytics, data science and business process automation that democratizes access to data and analytics throughout business organizations. Shares of Alteryx underperformed because the Covid-19 pandemic continued to negatively impact sales cycles for the company, with some customers postponing or downsizing data analytics initiatives. We view these headwinds as transitory and note that Alteryx has quickly adapted its go-to-market strategy to better engage these budget-conscious customers through greater usage of short-term licenses. Longer term, we believe that Covid-19 is a tailwind for Alteryx as companies realize the need for better data and analytic capabilities to adapt to dynamic business environments. In August, Alteryx announced it continued to make progress operationally during the second quarter with partnership with Adobe and UiPath and three new product launches that we believe have increased the company’s potential for generating revenue growth.”

8. EPAM Systems, Inc. (NYSE:EPAM)

Market Capitalization as of September 5: $23.643 billion

Number of Hedge Fund Holders: 36

EPAM Systems, Inc. (NYSE:EPAM) is a Pennsylvania-based company that provides digital platform engineering and software development services, in addition to specializing in artificial intelligence, smart automation, robotics, and virtual reality. EPAM Systems, Inc. (NYSE:EPAM) is one of the best artificial intelligence stocks to buy now as it has a global footprint, serving customers in more than 50 countries. The company, which ranks 8th in our list of the best artificial intelligence stocks to buy, has the ability to scale and sustain robust profitability with 3- and 5-Year non-GAAP EPS CAGR of 27% and 26%, respectively. The company is prioritizing global acquisitions to improve and advance capabilities and geographic expansion.

Barclays analyst Ramsey El-Assal on August 8 raised the price target on EPAM Systems, Inc. (NYSE:EPAM) to $485 from $410 and reaffirmed an Overweight rating on the shares after the Q2 results.

According to Insider Monkey’s data, 36 funds were bullish on EPAM Systems, Inc. (NYSE:EPAM) at the end of June 2022, compared to 38 funds in the last quarter. Stephen Mandel’s Lone Pine Capital is the largest stakeholder of the company, with 1.26 million shares worth $373.4 million.

Here is what Carillon Clarivest Capital Appreciation Fund has to say about EPAM Systems, Inc. (NYSE:EPAM) in its Q1 2022 investor letter:

“Stock selection contributed the most while sector allocation was also positive. An underweight to communication services and an overweight to energy helped performance, while an underweight to consumer staples and an overweight to materials detracted. Stock selection was strong within healthcare and materials but was weak within information technology and industrials. EPAM Systems (NYSE:EPAM) offers information technology services. The company struggled amid geopolitical instability given its 14,000 employees in Ukraine and associated operational, relocation, and travel costs. The Fund sold the stock.”

7. DocuSign, Inc. (NASDAQ:DOCU)

Market Capitalization as of September 5: 10.887 billion

Number of Hedge Fund Holders: 37

DocuSign, Inc. (NASDAQ:DOCU), which ranks 7th in our list of the best artificial intelligence stocks to buy, is a California-based software company that provides AI-driven contract lifecycle management. The software employed by DocuSign, Inc. (NASDAQ:DOCU) uses artificial intelligence to search and analyze agreements in terms of legal concepts and clauses.

On September 2, JMP Securities analyst Patrick Walravens reiterated an Outperform rating on DocuSign, Inc. (NASDAQ:DOCU) but lowered the price target on the stock to $84 from $151. The company’s latest filings revealed that June was its worst month for sales attainment. However, the analyst observed some positives in his checks, which included a huge expansion opportunity in a Fortune 500 financial services company.

According to the second quarter database of Insider Monkey, 37 hedge funds were long DocuSign, Inc. (NASDAQ:DOCU), compared to 45 funds in the prior quarter. Ken Fisher’s Fisher Asset Management featured as the leading position holder in the company, with 5.2 million shares worth approximately $299.4 million.

Here is what Cooper Investors Rowan Street Capital has to say about DocuSign, Inc. (NASDAQ:DOCU) in its Q1 2022 investor letter:

“The beauty of the public markets is that if you can be patient, there is a good chance the volatility of the marketplace will give you the chance to own companies on your watch list. The stock prices of our 3 new positions (please refer to charts below) have fluctuated from 100-350% over the past 12 months (when comparing 52-week high by 52-week low). Certainly, the underlying value of a business doesn’t fluctuate that much on an annual basis, so the public markets are a fantastic arena to buy businesses if you can sit still without growing tired of sitting still.

We have been following Docusign (NASDAQ:DOCU) since its IPO in 2018. Its stratospheric valuations over the past few years have kept us admiring this company from the sidelines. We took advantage of the recent drastic drop in stock price to build a core position for the fund.”

6. Verisk Analytics, Inc. (NASDAQ:VRSK)

Market Capitalization as of September 5: $29 billion

Number of Hedge Fund Holders: 38

Verisk Analytics, Inc. (NASDAQ:VRSK), one of the best artificial intelligence stocks to buy, is a New Jersey-based company that provides data analytics solutions via machine learned and artificially intelligent models. The company repurchased common shares worth $325 million during the second quarter of 2022. Verisk Analytics, Inc. (NASDAQ:VRSK) declared on August 2 a $0.31 per share quarterly dividend, in line with previous. The dividend is payable on September 30, to shareholders of record as of September 15.

Baird analyst Jeffrey Meuler on August 4 raised the price target on Verisk Analytics, Inc. (NASDAQ:VRSK) to $220 from $215 and maintained an Outperform rating on the shares. The analyst said they reported a robust Q2 2022 with better-than-expected margin baseline into the expense management initiative.

According to Insider Monkey’s data, Verisk Analytics, Inc. (NASDAQ:VRSK) was part of 38 hedge fund portfolios at the end of Q2 2022, up from 30 funds in the last quarter. Charles Akre’s Akre Capital Management is the largest stakeholder of the company, with 2.4 million shares worth $423 million. This strong hedge fund interest makes VRSK rank among the best AI stocks to buy.

Like Coupa Software Incorporated (NASDAQ:COUP), Autodesk, Inc. (NASDAQ:ADSK), and DocuSign, Inc. (NASDAQ:DOCU), elite hedge funds are piling into Verisk Analytics, Inc. (NASDAQ:VRSK).

Here is what Baron Asset Fund has to say about Verisk Analytics, Inc. (NASDAQ:VRSK) in its Q1 2022 investor letter:

“Outperformance of the Fund’s investments in Communication Services, Financials, and Industrials and lower exposure to the lagging Consumer Discretionary sector added the most value. Strength in Industrials was driven by data and analytics vendor Verisk Analytics, Inc. (NASDAQ:VRSK) Verisk reported solid quarterly earnings results led by ongoing strength in its core Insurance segment. Management also stated its intention to focus on expanding its products to the insurance industry, leading to a likely divestiture of its Financial Services and Energy segments.”

Click to continue reading and see 5 Best AI Stocks To Buy Now.

AI Fire Sale: Insider Monkey’s #1 AI Stock Pick Is On A Steep Discount

Published on May 1, 2024 at by Inan Dogan, PhD

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A New Dawn is Coming to U.S. Stocks

Published on May 2, 2024 at by Insider Monkey Staff

I work for one of the largest independent financial publishers in the world – representing over 1 million people in 148 countries.

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Should I put my money in Artificial Intelligence?

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Click to continue reading…

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