We recently compiled a list of the 10 AI News You Can’t Miss. In this article, we are going to take a look at where Apple Inc. (NASDAQ:AAPL) stands against the other AI stocks you can’t miss.
According to a Department of Energy-backed study, U.S. data center power demand could nearly triple in the next three years. With the industry going through an artificial intelligence transformation, data centers could account for as much as 12% of total US electricity consumption. The Lawrence Berkeley National Laboratory report revealed that by 2028, data centers’ annual energy use could reach between 74 and 132 gigawatts. The report was produced in an attempt to understand how Big Tech’s data center demand will impact electrical grids, power bills, and the climate.
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“This really signals to us where the frontier is in terms of growing energy demand in the U.S…”What this report is highlighting is what’s actually growing the fastest, and the leading edge of demand growth in the U.S. is the very new growth in artificial-intelligence data centers”.
– Avi Shultz, director of the DOE’s Industrial Efficiency and Decarbonization Office.
A McKinsey analysis reveals how the United States is expected to be the fastest-growing market for data centers, fueled by the continued increase in data, compute, connectivity from digitalization, cloud migration, as well as the scaling of new technologies, particularly AI.
A similar study by Bain & Company reveals that the global electricity demand has jumped an estimated 72% from 2019 to 2023 due to the surge in AI. The study further revealed that by 2027, demand could double 2023 levels and is expected to continue rising after 2027. The rate, however, is highly uncertain, depending on factors such as generative AI adoption, regulations, the data center supply chain’s ability to handle growth, and the commercialization of emerging energy technologies.
With the need for energy growing rapidly, the power ecosystem is grappling with many challenges at the same time. From reliable power sources, sustainability of power, and upstream infrastructure for power access, to power equipment within data centers, many issues must be addressed before it can have its power needs satisfied. According to a McKinsey study, the time to get new power connections for data center sites in major data center hubs such as Northern Virginia; Santa Clara, California; and Phoenix has been increasing. So much so that locations outside of the United States have placed moratoriums on many new data center builds primarily because they lack the power infrastructure to support them. As such, meeting these needs is highly important to fully realize the potential of artificial intelligence.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A wide view of an Apple store, showing the range of products the company offers.
Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 158
Apple Inc. (NASDAQ:AAPL) is a technology company that makes personal computers, mobile devices, and software. Its recent innovation is Apple Intelligence, Apple’s AI-driven personal system. Apple Intelligence uses AI to summarize and group notifications. Recently, the company’s AI feature came under fire when it generated a false headline under BBC News about a high-profile murder in the United States. The news claimed that Luigi Mangionse, the man who was arrested following the murder of healthcare insurance CEO Brian Thompson in New York, had shot himself, even though he had not. In response, BBC has complained to the company “to raise this concern and fix the problem”.
“BBC News is the most trusted news media in the world. It is essential to us that our audiences can trust any information or journalism published in our name and that includes notifications”.
-BBC spokesperson.
Overall AAPL ranks 2nd on our list of the AI stocks you can’t miss. While we acknowledge the potential of AAPL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than AAPL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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