Below we listed the 5 best robotics and artificial intelligence stocks to buy according to hedge funds. For a detailed analysis and a more comprehensive list please see Top 10 Robotics and Artificial Intelligence Stocks To Buy.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s take a look at the best robotics and AI stocks to buy:
5. Xilinx (NASDAQ:XLNX)
Unfortunately it is too late to buy XLNX. This morning Advanced Micro Devices (AMD) announced that it will be acquiring XLNX for $35 billion. About three weeks ago WSJ reported rumors that AMD might be buying Xilinx for more than $30 billion. Xilinx shares returned around 25% so far this year.
Xilinx is the fifth most popular artificial intelligence and robotics stock in our list. There were a total of 47 hedge funds with bullish XLNX positions at the end of June. The largest stake in Xilinx, Inc. (NASDAQ:XLNX) was held by Matrix Capital Management, which reported holding $242.5 million worth of stock at the end of June. It was followed by SoMa Equity Partners with a $196.8 million position. Other investors bullish on the company included Polar Capital, Alkeon Capital Management, and Citadel Investment Group. In terms of the portfolio weights assigned to each position SoMa Equity Partners allocated the biggest weight to Xilinx, Inc. (NASDAQ:XLNX), around 7.7% of its 13F portfolio. Bronson Point Partners is also relatively very bullish on the stock, dishing out 5.21 percent of its 13F equity portfolio to XLNX.
4. Tesla (NASDAQ:TSLA)
Tesla is the fourth most popular artificial intelligence stock among the 800+ hedge funds tracked by Insider Monkey. Most investors are under the impression that hedge funds don’t love Tesla because short sellers like David Einhorn and Mark Spiegel are very vocal. The number of bullish hedge fund positions has been reaching a new high for the last 3 quarters. At the end of June there were a total of 63 hedge funds with bullish Tesla bets. This means Tesla is currently a Hedge Fund 100 stock.
Even though Tesla shares increased from $84 at the end of December to $425, the stock is very popular among investors and hedge fund managers. Worm Capital recently released its Q3 2020 Investor Letter, a copy of which you can download here, and said the following about Tesla:
“A good example of riding our winners this year is Tesla, which we have studied down to the cellchemistry level since 2015. In August, for instance, the bid for Tesla increased some 70%. Was this increase in bid itself a reason to sell our ownership, or even to trim? No. Tesla continues to be dramatically undervalued relative to its long-term, multi-year intrinsic value, in our view. As I have discussed in previous letters, I believe Tesla is perhaps the single best investment opportunity in the market today: It is a true disruptor competing in vast end markets (transportation, trucking, energy storage) that are each worth trillions of dollars of potential market cap.
By 2025, I expect Tesla to be trading at multiples of where it’s currently priced today. Of course, month-to-month or even quarter-to-quarter we may see the prices bounce around, but we don’t attempt to time the market. As a rule, industry juggernauts in their early stages tend to be more volatile. That’s why we think in terms of years and not days: It gives us the flexibility of opportunity to make multiples on our invested capital.”