We recently published a list of the 13 Best Artificial Intelligence Stocks Under $50 to Buy Now. In this article, we are going to take a look at where Snap Inc. (NYSE:SNAP) stands against other AI stocks under $50.
On May 8, Dan Ives of Wedbush Securities joined CNBC’s ‘Squawk on the Street’ to discuss his bullish outlook on the AI sector and tech. Ives used the metaphor of technology speeding down the highway at 100 mph in a Ferrari, while regulation lags in the slow lane at 35 mph. He emphasized that, given this disparity, much of the oversight will be self-regulatory, as the use cases for AI are expanding rapidly. He predicted continued consolidation in the sector and stated that regulatory efforts would not halt this trend. The discussion also touched on international trade, particularly regarding the UK, China, India, and Vietnam. Ives described any progress with the UK as a small but positive step, but stressed that the real focus for tech companies remains on China. He explained that while the UK relationship is notable, it does not have the same impact as China, and tech companies are closely monitoring developments in Asia because of their significance to larger deals. He also predicts that major tech players would acquire smaller or emerging private companies and argued that the ongoing AI revolution, unstoppable even in the face of tariffs, will drive companies to position themselves advantageously for the future, with consolidation playing a key role.
Ives acknowledged the current regulatory uncertainty and unexpected moves from major tech partners but maintained his bullish stance on big tech overall due to accelerating use cases and spending in the sector. Ives also discussed the enterprise adoption of agentic AI, or AI agents, and when their impact on business efficiency and margins would become evident. Ives emphasized that the AI revolution is spreading across software, cybersecurity, and the internet, and that tariffs will not impede this fourth industrial revolution. In fact, Ives thinks that tariffs might even accelerate AI adoption by increasing price pressures and driving companies to seek efficiencies, highlighting that this earnings season was pivotal, with accelerated spending on AI. He observed that AI-related budgets have surged from 1% to 2% a year ago to about 15% now, and argued that neither regulatory hearings nor tariffs can slow this momentum. He likened the current AI revolution to a decisive last-second play in basketball, as it’s delivering unexpected and transformative results for the tech sector.
Our Methodology
We first sifted through ETFs and financial media reports to compile a list of the top AI stocks under $50. We then selected the 13 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, 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).
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Snap Inc. (NYSE:SNAP)
Share Price as of May 12: $8.25
Number of Hedge Fund Holders: 44
Snap Inc. (NYSE:SNAP) offers Snapchat, which enables people to communicate visually through short videos and images. The application offers various AI-powered lenses, chatbots, and personalized content to improve the user experience. It also provides Snapchat+, which is a subscription service that provides subscribers access to exclusive, experimental, and pre-release features.
In Q1 2025, the company’s ad revenue grew by 9% year-over-year to $1.211 billion. Direct response advertising increased by 14% to make up 75% of the total ad revenue. This growth is attributed to advancements in Snap’s ML capabilities, enhanced use of privacy-safe signals, and optimized ad formats. Now the company’s full-year guidance for other costs of revenue remains at 19% to 20% of revenue.
On April 30, Truist kept a Hold rating on Snap while lowering its price target from $14 to $11. The firm noted that growth in Direct Response advertising and Snapchat+ subscriptions was slightly offset by continued weakness in Brand advertising. Truist also added that changes to Snap’s ad products are attracting more advertisers. However, macroeconomic uncertainty due to tariffs is negatively impacting overall advertising demand.
Overall, SNAP ranks 2nd on our list of the best artificial intelligence stocks under $50 to buy now. While we acknowledge the growth potential of SNAP, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than SNAP but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.