In this article, we will take a look at the 5 best chatbot stocks to buy as ChatGPT gains market share. To see more such companies, go directly to 10 Best Chatbot Stocks to Buy As ChatGPT Gains Market Share.
5. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 117
CRM company Salesforce, Inc. (NYSE:CRM) is known for its Einstein AI technology which is primarily used by companies for improving their customer experience. At its core, Salesforce Einstein Bot is a natural language processing (NLP) and natural language understanding (NLU) chatbot.
At the end of the last quarter of 2022, 117 hedge funds reported owning stakes in Salesforce, Inc. (NYSE:CRM). The biggest hedge fund stakeholder of Salesforce, Inc. (NYSE:CRM) was Natixis Global Asset Management’s Harris Associates which had a stake worth about $1.1 billion.
Aristotle Atlantic made the following comment about Salesforce, Inc. (NYSE:CRM) in its Q3 2022 investor letter:
“We sold Salesforce, Inc. (NYSE:CRM) to reduce our weighting in the Information Technology sector. Salesforce held their investor day, and the company reiterated their organic Fiscal Year 2026 revenue target of $50 billion. This target remains more back-end loaded based on current slowing macroeconomic conditions and requires new annual contract growth well ahead of what the company has been averaging for the past few years. We are skeptical that the company will be able to achieve this revenue target organically and see Merger & Acquisitions (M&A) being key to achieving the growth. While we believe Salesforce has shown good success in growing its non-CRM clouds, we do see more competitive pressures emerging for the Marketing and Customer Service Clouds, specifically on the pricing side during a global economic slowdown.”
4. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 194
In the AI race where giants like Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc. (NASDAQ:GOOG), and Amazon.com, Inc. (NASDAQ:AMZN) are running, how can Meta Platforms, Inc. (NASDAQ:META) stay behind? Mark Zuckerberg made headlines recently when he announced that Meta Platforms, Inc. (NASDAQ:META) is releasing its own AI-based language model, called LLaMA, which stands for Large Language Model Meta AI. Like other AI language models, LLaMA takes a sequences of words as an input and predicts a next word to recursively generate text. Meta Platforms, Inc. (NASDAQ:META) said that its language model was trained from 20 different languages.
As of the end of the fourth quarter of 2022, 194 hedge funds had stakes in Meta Platforms, Inc. (NASDAQ:META).
ClearBridge Large Cap Value Strategy made the following comment about Meta Platforms, Inc. (NASDAQ:META) in its Q4 2022 investor letter:
“We also initiated and subsequently added to a position in Meta Platforms, Inc. (NASDAQ:META) following a 70% year-to-date decline in its shares. Meta shares derated materially in 2022 as revenue growth slowed due to tough comps versus a strong e-commerce environment during COVID-19, privacy changes put in place by Apple, and the meteoric rise of rival social media platform TikTok. The company’s valuation declined to a compelling 10x consensus 2023 earnings, which in our view materially undervalued its long-term earnings and free cash flow generation potential. Despite current revenue headwinds, we believe Meta’s massive platform reach should allow it to continue to attract engagement, a metric that appears to be accelerating with the launch of its short-form video product “Reels”. The company’s ability to target potential customers is also set to improve, driven by large investments in artificial intelligence and improved analytical tools to navigate Apple’s privacy policies. We also welcome the company’s increasing financial discipline, including reining in both capex and opex, which should sustain the company’s high underlying profitability and gain back investor confidence. Meta has also done a good amount of work to improve its social media platforms Facebook and Instagram and has best-in-class practices designed to reduced hate speech and improve privacy.”
3. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 209
Alphabet Inc. (NASDAQ:GOOG) was clearly rattled after Microsoft Corporation (NASDAQ:MSFT)’s partnership with OpenAI. For years Alphabet Inc. (NASDAQ:GOOG) was known to have world-class AI technologies but it couldn’t take a lead in shipping a viable AI product for the masses due to several reasons. After ChatGPT, Alphabet Inc. (NASDAQ:GOOG) was quick to launch its own AI-based chatbot, called Bard, which went through some initial hiccups, causing huge losses for the company amid public embarrassment. However, Alphabet Inc. (NASDAQ:GOOG)’s AI is extremely advanced and developed due to its years-long experience in the industry and its DeepMind technologies. BofA recently said that Alphabet Inc. (NASDAQ:GOOG) stands to benefit from the AI space due to its DeepMind Sparrow LLM and its recent Bard chatbot.
Insider Monkey’s database of 943 hedge funds shows 209 hedge funds had stakes in Alphabet Inc. (NASDAQ:GOOG) at the end of 2022.
Baron Opportunity Fund made the following comment about Alphabet Inc. (NASDAQ:GOOG) in its Q4 2022 investor letter:
“Alphabet Inc. (NASDAQ:GOOG) remains the second largest position in the portfolio, and we continue to be positive on its growth opportunities with search, YouTube, and cloud computing, but we decided to slightly reduce the position size to fund other investments in software, semiconductors, and digital media, and because ChatGPT and/or similar AI-based services present a hard to measure risk to Google’s virtual search monopoly.”
2. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 240
Amazon.com, Inc. (NASDAQ:AMZN) is no stranger to AI. From AWS to its smart home systems and warehouses, Amazon.com, Inc. (NASDAQ:AMZN) uses AI everywhere. Amazon.com, Inc. (NASDAQ:AMZN)’s Alexa is one of the smartest AI-based assistants used by millions of people around the world. Being a giant in the Cloud computing and e-commerce space Amazon.com, Inc. (NASDAQ:AMZN) could leverage its dominance and join the AI wars to rival companies like Microsoft Corporation (NASDAQ:MSFT) and Alphabet Inc. (NASDAQ:GOOG).
At the end of the fourth quarter of last year, 240 hedge funds tracked by Insider Monkey had stakes in Amazon.com, Inc. (NASDAQ:AMZN). The total value of these stakes was over $27 billion. The biggest hedge fund stakeholder of Amazon.com, Inc. (NASDAQ:AMZN) was Natixis Global Asset Management’s Harris Associates which had a $1.6 billion stake in the company.
Baron Opportunity Fund made the following comment about Amazon.com, Inc. (NASDAQ:AMZN) in its Q4 2022 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN) is the world’s largest retailer and cloud services provider. Shares of Amazon were down in the quarter, as the company guided to relative weakness in margins and its cloud business, due to the same macro headwinds and optimization trends impacting Microsoft Azure. We believe that Amazon is well positioned to improve profitability back to historical levels, particularly in its core North American retail division. We have already seen some of this play out with reports of Amazon’s increased cost discipline and broad-based layoffs. Particularly within the internet and software sectors, we believe Amazon can sustain premium growth compared to the rest of the market, given its competitive strengths and scale. Longer term, Amazon has substantially more room to grow in e-commerce, where it has less than 15% penetration in its TAM, and cloud, where it is a clear leader in the vast and growing cloud infrastructure market.”
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 259
Microsoft Corporation (NASDAQ:MSFT) is of course one of the most notable AI and chatbot stocks to buy now since the company has huge plans to tap into the AI sector and disrupt several industries. Microsoft Corporation (NASDAQ:MSFT)’s CEO Satya Nadella has been relentless when it comes to AI. Microsoft Corporation (NASDAQ:MSFT) is brining ChatGPT-based language learning models to power Bing search. It is rolling out updates to make it easy for Windows 11 users to access the Bing chatbot from task bar. Microsoft Corporation (NASDAQ:MSFT) is bringing a new AI-based Cloud platform for telecom companies, called Azure Operator Nexus.
Recently, BofA analysts listed 15 companies that stand to benefit from the AI wave. As expected, Microsoft Corporation (NASDAQ:MSFT) made it to the list, as the firm believes the Redmond software company is well positioned in the space due to its OpenAI integration.
At the end of the fourth quarter of 2022, 259 hedge funds had stakes in Microsoft Corporation (NASDAQ:MSFT).
Baron Opportunity Fund made the following comment about Microsoft Corporation (NASDAQ:MSFT) in its Q4 2022 investor letter:
“Shares of mega-cap software company Microsoft Corporation (NASDAQ:MSFT) outperformed despite a mixed fiscal first quarter due to macro challenges that negatively impacted results and guidance, including foreign exchange headwinds, weakening PC demand, and a cyclical slowdown in advertising spending. Total revenue beat Street expectations at 16% constant-currency growth (vs. estimates of 14%), but its Azure cloud computing business missed analyst projections by 1% for the second straight quarter, though it still grew a robust 42% year-over-year, as Microsoft helped its customers optimize existing workloads due to the macro backdrop. While the optimization of workloads is a short-term headwind, we believe it is the right thing to do and should help drive more consumption with customers over time. Our research continues to indicate that the longer-term secular trend of cloud computing remains healthy and intact. For example, in its fourth quarter CIO survey report, Morgan Stanley showed, among other things, that cloud computing was the second highest CIO spending priority (behind only security software), that cloud application workloads were expected to increase from 27% of total workloads today to 46% by the end of 2025, and that Azure was listed as the preferred cloud vendor and likely to take share over the short and long term.9 Additionally, Microsoft is positioned to be a prime beneficiary of ChatGPT. Microsoft invested $1 billion in OpenAI in 2020 and is rumored to be considering investing an additional $10 billion for a 49% stake in the company. Moreover, ChatGPT runs on Microsoft’s Azure platform, and Microsoft recently announced the general availability of its Azure OpenAI Service enabling Azure customers to access advanced AI models, including ChatGPT itself soon. We remain bullish on Microsoft’s long-term opportunity in the cloud, and believe AI has the potential to be additive to growth for years to come.”
You can also take a peek at 15 Best Short-Term Stocks to Buy and 10 Best Stocks to Buy for High Returns.
