In this article, we discuss the 10 best stocks to invest in according to AI.
The rise of artificial intelligence in finance has led many investors to question whether AI-powered tools like ChatGPT can effectively pick stocks. While ChatGPT and similar large language models (LLMs) can process vast amounts of financial data, market news, and historical trends, their ability to consistently outperform human experts or quantitative models remains debatable. Instead, investors should look towards AI-driven hedge funds, such as Renaissance Technologies and Two Sigma, that have historically outperformed the market using machine learning models. For example, the Medallion Fund of the former achieved an annualized return of 66% before fees from 1988 to 2018. These funds rely on proprietary algorithms, high-frequency trading, and massive datasets.
Read more about these developments by accessing 10 Best AI Data Center Stocks and 10 Buzzing AI Stocks According to Goldman Sachs.
One indicator of hedge funds being ahead of the curve when it comes to stocks and the broader market in general is a recent Goldman Sachs note to investors which details that top hedge funds navigated the recent tech selloff without significant losses, even managing to post nominal gains since the turn of the year despite a big dropoff in the market amid concerns over trade tariffs and an AI bubble. Per a report by news agency Reuters, US President Trump has delayed tariffs on Canada and Mexico by one month, fueling wild swings in currency, bond and share markets. Despite the turmoil, stock-picking hedge funds that take bets based on company fundamentals recorded an average 2.6% return, their best month since February 2024, given a broader market rally, the report claimed.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.
The stocks listed below were mentioned in articles by prominent finance publications as some of the best ChatGPT stock picks over the past six months. The return of each stock since the publication of these articles is mentioned as well. 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).
10 Best Stocks to Invest in According to AI
Best Stocks to Invest in According to AI
10. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 56
Stock Return Over Past Six Months: 36%
International Business Machines Corporation (NYSE:IBM) provides integrated solutions and services worldwide. The firm recently posted earnings for the fourth quarter of 2024, beating market expectations on earnings per share and posting in-line revenue. Analysts on Wall Street reiterated bullish views on the stock following the quarterly report. RBC Capital Markets kept an Outperform rating on the shares and raised the price target to $276 from $250. Analysts led by Matthew Swanson said that IBM delivered a solid quarter overall, but results were highlighted by strong outperformance in three focal metrics — free cash flow, or FCF, Generative AI, or GenAI bookings and subsidiary Red Hat’s growth. All three came in above expectations, building momentum into 2025 highlighted by guidance for $13.5 billion FCF, the analysts added.
