We recently compiled a list of the 15 AI News That Should Not Be Ignored. In this article, we are going to take a look at where NetApp, Inc. (NASDAQ:NTAP) stands against the other AI stocks that should not be ignored.

Artificial Intelligence is driving an unprecedented expansion in the potential market size for hardware and software products. According to Bain & Company, the market for AI-related hardware and software will witness annual growth rates of 40% to 55% over the next three years, potentially reaching a valuation between $780 billion and $990 billion by 2027. Companies investing in artificial intelligence know exactly how big of an opportunity this is and are determined not to miss it. Keshav Murugesh, Group CEO of WNS, a global business process management company, talked about its significance at the “CNBC Connect” event in Bangkok. According to Murugesh, many companies are underprepared for AI’s impact, particularly in areas such as government regulation. As such, there is clearly an upside to investing early in the technology.

“Three years from now, if you are investing significantly in generative AI, you might be disappointed, right? As we have seen in many technologies, sometimes the hype is much bigger than the reality. But, three years from now if you are not investing in generative AI, you are going to be terrified. Because those companies that made the investments now, will be far ahead of you”.

– Keshav Murugesh.

READ ALSO: 10 Trending AI Stocks on Latest Analyst Ratings and News and 8 Best Information Technology Services Stocks to Invest in Now

Latest Developments in AI

Let’s look at the latest developments in artificial intelligence to assess how they are helping businesses, customers, and society to reach the next level of success. In its first, Chinese scientists have developed the first AI-powered robot lifeguard to stand watch over the riverside site in Luohe city. Using artificial intelligence, big data, and navigation and tracking technologies, the robot will operate without any human intervention. While it is not the first robot lifeguard, it is the first to be fully automated and needs no intervention, South China Morning Post reported.

In other news, Japanese Prime Minister Shigeru Ishiba has pledged more than $65 billion of fresh support for the nation’s semiconductor and artificial intelligence sector. The move comes in hopes of narrowing the gap between Tokyo and global powers on chip support. Ishiba notes that he wishes to spread positive examples of regional revitalization like TSMC’s chip plant in Kumamoto across the nation.

Speaking of artificial intelligence, it seems that artificial intelligence companies are no longer scaling at the pace they were initially and that the outcomes from scaling up pre-training—the stage in AI model training where large volumes of unlabeled data are used to learn language patterns and structures—have seemingly reached a plateau. To overcome this plateau, researchers are now exploring “test-time compute,” a technique that enhances existing AI models during the so-called “inference” phase, or when the model is being used. This shift has the potential to reshape the AI landscape and impact the demand for hardware, challenging Nvidia’s dominance in training chips as the focus moves to the inference market.

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).

NetApp, Inc. (NASDAQ:NTAP)

Market Capitalization: $24.97 billion

NetApp, Inc. (NASDAQ:NTAP) is a data infrastructure company offering a range of enterprise software, systems, and services that customers use to transform their data infrastructures. It is a top Goldman Sachs Phase 2 AI stock, catering to the needs of the cloud computing and data center industries.

On November 11, intelligent data infrastructure company NetApp, Inc. (NASDAQ:NTAP) introduced updates to its enterprise storage offerings including new NetApp AFF A-Series and AFF C-Series systems. The innovations will allow customers to expand their intelligent data infrastructure using NetApp’s leading data storage systems at more accessible entry points. The storage solutions offer improved performance, storage density, and efficiency; allowing customers to build or expand their intelligent data infrastructure for high-performance workloads with storage deployments at the scale and price point that suits them best.

“The unrelenting growth of data volumes and increasingly demanding workloads have put increasing pressure on IT teams of any size to provide simplicity at scale for all their workloads. Customers facing those challenges can rely on NetApp to deliver continuous innovation, illustrated by the release of the new more powerful, intelligent, and secure NetApp AFF A-Series systems and the new scalable, efficient, and secure NetApp AFF C-Series systems. Today, we are making our latest developments in intelligent data infrastructure more accessible for an even wider range of customers.”

– Sandeep Singh, Senior Vice President and General Manager of Enterprise Storage at NetApp.

Overall NTAP ranks 12th on our list of the AI stocks that should not be ignored. While we acknowledge the potential of NTAP 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 NTAP 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.