We recently compiled a list of the Top 10 AI News Updates Analysts are Monitoring. In this article, we are going to take a look at where Confluent, Inc. (NASDAQ:CFLT) stands against the other AI stocks.

Are we in an artificial intelligence hype cycle, and will the cycle ever turn into meaningful value for enterprises?

That’s the big question as investors question whether revolutionary technology has been hyped out of proportion. Amid the concerns, Silicon Valley investors and tech giants remain optimistic that the technology at the heart of the fourth industrial revolution will one day deliver trillions of dollars in business value.

“We are definitely in a hype cycle, especially for generative AI,” said Konstantine Buhler, a partner at Sequoia Capital, speaking on a panel at The Wall Street Journal’s CIO Network Summit on Monday.

Some corporate technology leaders claim they cannot wait for AI to improve or demonstrate its long-term worth despite the technology’s return on investment taking longer. Customer service and code writing are currently the first fields where AI is promising, but the revolutionary developments that will yield those trillions may still be some time off.

If there is something history has shown is that generating returns from new technology investments is a high-pressure game that takes some time. According to Buhler, it took many years to generate significant returns from AI’s first and second eras despite trillions of dollars in market capitalization being created in the 2000s.

Despite the growing concerns about how long it will take to generate returns from AI investments, companies and businesses are increasingly integrating the revolutionary technology to enhance operations and efficiency. While American banks have been using AI for years to spot frauds, it’s only now that most are betting big on the technology.

In the past year, banks led by JPMorgan have rolled out large language models for more employees. Additionally, the banks use generative artificial intelligence in call centers for agents. At JPMorgan, over 200,000 people have an AI tool at their desks.

According to Teresa Heitsenrether, JPMorgan’s chief data and analytics officer, it is still early to start seeing productivity gains across the bank in integrating AI.

“It’s very early innings. First we want to put the tool in people’s hands, and let them be able to ask questions and get answers. That already starts to spawn ideas, innovation, some productivity,” Heitsenrether said.

While the focus has been on AI’s monetary value, the International Monetary Fund notes that AI will affect 40% of jobs worldwide. While technology is expected to complement most jobs, it will replace some.

“In advanced economies, about 60 percent of jobs may be impacted by AI. Roughly half the exposed jobs may benefit from AI integration, enhancing productivity. For the other half, AI applications may execute key tasks currently performed by humans, which could lower labor demand, leading to lower wages and reduced hiring,” IMF said in a blog post.

AI stands out for its capacity to influence highly skilled occupations. As a result, compared to emerging markets and developing economies, advanced economies face more risks from AI but also have more opportunities to take advantage of its advantages.

For this article, we selected AI news updates by going through news articles, stock analyses, and press releases. These stocks are also popular among hedge funds as of Q4 2024.

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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Confluent, Inc. (NASDAQ:CFLT)

Number of Hedge Fund Holders: 48

Confluent, Inc. (NASDAQ:CFLT) is a technology company that provides a cloud-native data streaming platform, that allows organizations to continuously stream, connect, process, and manage data in real-time across various systems. Additionally, the company provides data streaming infrastructure that powers real-time AI applications. It also offers a platform for building next-generation data-intensive AI applications. Citi analyst Tyler Radke reiterated a Neutral rating on the stock on February 24 and increased the price target to $37 from $33.

The price hike comes on Confluent, Inc. (NASDAQ:CFLT) delivering solid fourth-quarter results for fiscal 2024, demonstrating solid cloud revenue performance. Similarly, acquiring Databricks should strengthen the company’s position in the streaming markets. The analyst also awaits the company’s update on the progress of AI within its DSP offerings at its forthcoming investor day.

Overall CFLT ranks 1st on our list of the AI stocks analysts are monitoring. While we acknowledge the potential of CFLT 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 time frame. If you are looking for an AI stock that is more promising than CFLT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.

Disclosure: None. This article is originally published at Insider Monkey.