In this article, we discuss the 10 best AI stocks for 2022. If you want to skip our detailed analysis of these stocks, go directly to the 5 Best AI Stocks for 2022.
Artificial intelligence is the backbone of a myriad of innovations in today’s world such as self-driving cars, high-tech computing, enterprise solutions, and robotics to name a few. AI is also set to play a key role in blockchain technology which forms the basis of the cryptocurrency industry. In addition, AI also played a key role in fighting the spread of COVID-19 from contact tracing to robots and drone deployment to responding to urgent needs in hospitals as well as performing deliveries of food, medications, and equipment.
According to a report published in October by the nonprofit public policy organization Brookings Institution, 44 countries have joined the AI bandwagon by drafting their own national AI strategic plans, including India, China, Uganda, Latvia, and the United States. A new defense bill, the National Defense Authorization Act for Fiscal Year 2021, allocated $6.4 billion in government funds for AI programs in 2021.
Some of the biggest artificial intelligence companies in the world are NVIDIA Corporation (NASDAQ:NVDA), Amazon.com, Inc. (NASDAQ:AMZN), and Meta Platforms, Inc. (NASDAQ:FB). Other companies profit from the AI market by selling hardware and AI-related services. According to a recent market report published by Fortune Business Insights, the artificial intelligence market is set to grow at a CAGR of 33.6% to reach $360.36 billion by 2028.
Our Methodology
These companies are operating in the artificial intelligence market. We carefully selected AI stocks that, based on their solid fundamentals and growth catalysts, could be a good investment option in 2022. These AI companies offer hardware, software, and AI-focused services.
The hedge fund sentiment around each stock was calculated using the data of 867 hedge funds tracked by Insider Monkey.
Best AI Stocks for 2022
10. C3.ai, Inc. (NYSE:AI)
Number of Hedge Fund Holders: 24
C3.ai, Inc. (NYSE:AI) is an enterprise AI software provider. The California-based tech company offers AI platforms and CRM solutions to businesses and governments internationally. C3.ai, Inc.’s (NYSE:AI) AI software-as-a-service is used in a variety of industries, including defense, utilities, aerospace, and oil and gas.
One of the recent contracts granted to C3.ai, Inc. (NYSE:AI) is the new $500 million Department of Defense agreement to use the company’s products for military operations modeling and simulation for the next five years.
The company’s revenue in the second quarter of fiscal 2022 came in at $58.3 million, up 41% year over year, and beat revenue estimates by $1.3 1 million. Moreover, C3.ai, Inc. (NYSE:AI) expanded its industry diversification and is now serving 14 industries in Q2 2022, up from 7 industries a year ago, including healthcare, agriculture, life sciences, financial services, and manufacturing.
At the end of the third quarter of 2021, 24 hedge funds in the database of Insider Monkey held stakes worth $199 million in C3.ai, Inc. (NYSE:AI), compared to 29 in the preceding quarter worth $258 million. Needham analyst Jack Andrews maintained a Buy rating on C3.ai, Inc. (NYSE:AI) with a price target of $103 on the shares on December 10.
Among the hedge funds being tracked by Insider Monkey, New York-based firm Tiger Global Management LLC is a leading shareholder in C3.ai, Inc. (NYSE:AI) with 1 million shares worth more than $46 million.
One of the most popular AI picks for hedge funds and investors include C3.ai, Inc. (NYSE:AI) along with Microsoft Corporation (NASDAQ:MSFT), NVIDIA Corporation (NASDAQ:NVDA), Amazon.com, Inc. (NASDAQ:AMZN), and Meta Platforms, Inc. (NASDAQ:FB).
9. SentinelOne, Inc. (NYSE:S)
Number of Hedge Fund Holders: 35
SentinelOne, Inc. (NYSE:S) offers an enterprise AI cybersecurity platform to a variety of enterprises in the fields of finance, healthcare, automotive, services, and transportation. Among the company’s biggest clients are Electronic Arts Inc. (EA), Sysco Corporation (SYY), and Autodesk, Inc. (ADSK).
SentinelOne, Inc. (NYSE:S) had increased its customer base by 75% year on year to over 6,000 as of the third quarter of fiscal 2022. Moreover, the artificial intelligence cybersecurity firm based in California has delivered its services in Europe and is currently expanding its R&D center in the Czech Republic.
After the company reported solid third earnings on December 9, Deutsche Bank analyst Patrick Colville maintained his Buy rating on SentinelOne, Inc. (NYSE:S), adding that the quarter suggests “capturing investment in the buoyant endpoint market.”
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Third Point is a leading shareholder in SentinelOne, Inc. (NYSE:S) with 26.7 million shares worth more than $1.4 billion.
In its Q3 2021 investor letter, Third Point Management mentioned SentinelOne, Inc. (NYSE:S) and discussed its stance on the firm. Here’s what the fund said:
“Our top winners on a percentage basis in Q3 were our two largest positions; (which includes) SentinelOne, up 26%, as public market investors rewarded both companies’ disruptive business models and high-growth trajectories. We expect SentinelOne to grow rapidly and continue to gain market share over the next decade as flexible work patterns, cloud adoption, and IoT create more security vulnerabilities. This market is still dominated by legacy vendors whose solutions pale when compared to SentinelOne’s autonomous, machine-learning based security, which is taking share and helping the company grow annual recurring revenue by more than 100% yearover-year.”
8. Palantir Technologies Inc. (NYSE:PLTR)
Number of Hedge Fund Holders: 35
Data analytics firm Palantir Technologies Inc. (NYSE:PLTR) integrates AI/ML in its enterprise platform. The company’s primary business is to provide secure data analytics software and management to the government and other businesses. On the other hand, Palantir Technologies Inc. (NYSE:PLTR) also lays the groundwork for AI and machine learning in space exploration. Apollo’s Edge-AI technology includes PLTR’s Meta-Constellation software, which enables the production of expanding satellite constellations and the deployment of artificial intelligence into space.
Palantir Technologies Inc. (NYSE:PLTR) also announced a partnership with Dewpoint Therapeutics, a Massachusetts-based biotech company, in December to use Palantir’s Foundry platform for drug discovery.
In Q3 2021, Palantir Technologies Inc. (NYSE:PLTR) grew its revenue by 36% year over year to $392 million. The Colorado-based software company also added 34 net new customers during the period.
More hedge funds expressed their bullish sentiment on Palantir Technologies Inc. (NYSE:PLTR) in Q3 2021. The latest data shows that 35 hedge funds in the Insider Monkey database were long Palantir Technologies Inc. (NYSE:PLTR) at the end of the September quarter with stakes worth $1.63 billion.
In addition to Microsoft Corporation (NASDAQ:MSFT), NVIDIA Corporation (NASDAQ:NVDA), Amazon.com, Inc. (NASDAQ:AMZN), and Meta Platforms, Inc. (NASDAQ:FB), Palantir Technologies Inc. (NYSE:PLTR) is one of the AI stocks analysts are watching for 2022.
7. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 41
Another hot AI stock for 2022 according to analysts is cloud and software firm International Business Machines Corporation (NYSE:IBM). Of the 867 elite funds tracked by Insider Monkey, 56 were long International Business Machines Corporation (NYSE:IBM) at the end of September. Arrowstreet Capital is the leading stakeholder of the company.
The New York-based company provides software applications and analytics data platforms for businesses. International Business Machines Corporation (NYSE:IBM) announced the completion of its four-month project with HSBC Holdings plc (NYSE:HSBC) to test end-to-end transactions involving central bank digital currencies, eBonds, and foreign exchange in mid-December.
Shares of International Business Machines Corporation (NYSE:IBM) increased 8% in November following the spinoff from its managed infrastructure services business Kyndryl. The separation of Kyndryl from IBM, according to IBM CEO Arvind Krishna, is one of the company’s strategies to focus on hybrid cloud and AI.
On December 7, Credit Suisse analyst Sami Badri assumed an Outperform rating on International Business Machines Corporation (NYSE:IBM) and maintained a $164.29 price target on the stock.
6. DocuSign, Inc. (NASDAQ:DOCU)
Number of Hedge Fund Holders: 51
One of the AI stocks investors are watching is e-signature service provider DocuSign, Inc. (NASDAQ:DOCU). The San Francisco-based application developer is the largest e-signature company with more than 1 billion users and over 1.1 million paying customers worldwide.
DocuSign, Inc. (NASDAQ:DOCU) automates workflows across legal clauses and agreements using artificial intelligence. The AI firm also offers AI-powered contract lifecycle management.
The company saw a 42% year-over-year increase in revenue to $545.5 million in the third quarter of fiscal 2022. At the end of the September quarter, 51 hedge funds out of 867 tracked by Insider Monkey had positions in DocuSign, Inc. (NASDAQ:DOCU) valued at $4.24 billion.
In the Q2 2021 investor letter of Carillon Tower Advisers, the fund mentioned DocuSign, Inc. (NASDAQ:DOCU) and discussed its stance on the firm. Here is what the fund said:
“DocuSign provides electronic signature solutions. The firm reported an excellent quarter and investors have appreciated the strong growth combined with the excellent margins the company has posted. DocuSign has a long runway of growth ahead and we believe that it remains in a favorable position to continue gaining market share from traditional manual and paper-based signature solutions.”
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Disclosure. None. 10 Best AI Stocks for 2022 is originally published on Insider Monkey.
