12 Best Artificial Intelligence Stocks To Invest In Right Now

Published on August 10, 2021 at 10:12 am by Ma’k Almario in Hedge Funds, News

In this article, we will be looking at 12 best artificial intelligence stocks to invest in right now. To skip our detailed analysis of these stocks and the artificial intelligence industry, you can go directly to see the 5 Best Artificial Intelligence Stocks To Invest In Right Now.

The COVID-19 pandemic hastened the advent of AI technologies in our lives. According to a PwC AI survey, 33% of businesses had begun integrating limited AI use cases in 2021. On the other hand, 25% of surveyed businesses have fully AI-enabled business processes, up 18% year-over-year. These companies have obtained the rewards of AI adoption, as the technology helped them increase efficiency.

The AI industry has the potential to generate high revenue growth over time. According to a Deloitte study, AI-based revenues are expected to reach $100 billion by 2025 driven by the ongoing demand for machine learning, deep learning, and conversational AI applications. As a result, many tech startups are developing their own AI products and services to thrive in the rapidly growing field of artificial intelligence.

Snorkel AI, a California-based AI application developer recently raised $85 million in Series C funding at a $1 billion valuation. The AI startup is backed by investment giant BlackRock, Inc. (NYSE:BLK) and Alphabet Inc.’s (NASDAQ:GOOGL) venture capital arm, GV. Among the biggest companies that use Snorkel AI’s machine learning data labeling is Alphabet Inc. (NASDAQ:GOOGL), Apple Inc. (NASDAQ:AAPL), and Intel Corporation (NASDAQ:INTC).

Likewise, Amazon.com, Inc. (NASDAQ:AMZN) is one of the biggest tech companies that offers automatic data labeling through its cloud service platform, Amazon Web Services (AWS). In June 2021, Amazon.com, Inc. (NASDAQ:AMZN) teamed up with global CRM leader salesforce.com, inc. (NYSE:CRM) to integrate AWS’ artificial intelligence and machine learning applications with CRM’s tools. Shares of Amazon.com, Inc. (NASDAQ:AMZN) jumped 5% in the last three months.

Some of the notable artificial intelligence stocks that are gaining the street’s attention include Facebook, Inc. (NASDAQ:FB), Microsoft Corporation (NASDAQ:MSFT), Nvidia Corporation (NASDAQ:NVDA), and Tesla, Inc. (NASDAQ:TSLA), among others. In March 2021, Facebook, Inc. (NASDAQ:FB) launched its new AI initiative “Learning from Videos,” which is aimed to improve the company’s core algorithms and generate entirely new services by learning from audio, visual, and textual input. Shares of Facebook, Inc. (NASDAQ:FB) gained 18% in the last three months.

Photo by Andy Kelly on Unsplash

Investing is becoming difficult by the day, even for smart money. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.

Our Methodology

Insider Monkey tracks data of about 866 hedge funds, which we have used to pick the artificial intelligence stocks popular among hedge funds. We also chose stocks with a positive analyst rating, solid fundamentals, and growth catalysts. With this context in mind, here is our list of the 12 best artificial intelligence stocks to invest in right now.

Best Artificial Intelligence Stocks To Invest In Right Now

12. Palantir Technologies, Inc. (NYSE:PLTR)

Number of Hedge Fund Holders: 32

We start our list of the 12 best artificial intelligence stocks to invest in right now with Palantir Technologies, Inc. (NYSE:PLTR). The Colorado-based software company was founded in 2003 and went public in 2020. Palantir Technologies, Inc. (NYSE:PLTR) has over 149 customers in the commercial and government sectors including, the Central Intelligence Agency, the Defense Department, and the Internal Revenue Service. Palantir’s platform Gotham and Foundry provides a company with the end-to-end infrastructure required to support artificial intelligence by providing data needed to train AI algorithms.

Palantir Technologies, Inc. (NYSE:PLTR) saw its stock gain 10.13% on February 8th after the company announced its partnership with multinational technology company International Business Machines (NYSE:IBM). Tech giants IBM and PLTR entered a partnership to create AI-infused applications.

On May 12, Citi raised the price target of Palantir Technologies, Inc. (NYSE:PLTR) to $17 per share from $15 per share.

The company has a market cap of $42.26 billion. In the first quarter of 2021, Palantir Technologies, Inc. (NYSE:PLTR) reported an EPS of $0.4, meeting consensus estimates. In the first quarter, the company’s revenue grew 49% year-over-year to $341.23 million, beating revenue estimates by $9 million. The stock has gained 24% in the last three months.

At the end of the first quarter of 2021, 32 hedge funds in the database of Insider Monkey held stakes worth $1.14 billion in Palantir Technologies, Inc. (NYSE:PLTR), down from 38 in the previous quarter worth $1.90 billion.

Guardian Fund mentioned Palantir Technologies, Inc. (NYSE:PLTR) in its Q2 2020 investor letter:

“The success of the private sector to innovate in order to help people through the lockdowns and to produce vaccines atrecord speed at scale has been impressive. The fact that almost every public institution was struggling to be effective no matter how hard some of the people worked, shows the fundamental need of the public sector to become data-driven and invest in data infrastructure.

Government institutions have to partner with enterprises such as Palantir to become digitalnative. The public sector will always struggle to attract the most talented engineers as compensations cannot be justified with tax money and therefore this must be a partnership with specialized private enterprises. This is a great opportunity for Palantir especially as it has already

shown to be capable of working with demanding and complex public institutions entrusting it to work on the most critical and sensitive matters.

The news section of Palantir’s website gives insight in where new business is coming from. The main opportunity is in enterprise software and the faster onboarding time and increased self-service of clients is a positive sign. We believe Palantir is becoming one of the more important global software companies.

In addition, Palantir has quietly become a significant investor, investing well over USD 200 million in eight companies. Thereby, it is following the lead of companies like Tencent, Alphabet, and Shopify of establishing valuable investment portfolios.”

11. International Business Machines (NYSE:IBM)

Number of Hedge Fund Holders: 41

International Business Machines (NYSE:IBM) is ranked eleventh on the list of 12 best artificial intelligence stocks to invest in right now. The New York-based multinational technology giant’s AI for business platform IBM Watson was established in 2010 and has over 100 million users worldwide including Mitsubishi Corporation (OTCMKTS:MSBHF) and Lumen Technologies, Inc. (NYSE:LUMN).

In April 2021, International Business Machines (NYSE:IBM) launched new IBM Watson features after receiving an IBM-commissioned survey showing that 84% of AI professionals prefer companies that are transparent with the framework of its AI models. Shares of IBM rose 11% in the last twelve months.

On July 20, Morgan Stanley analyst Katy Huberty raised the price target of International Business Machines (NYSE:IBM) and kept an Equal Weight rating on the stock noting that the company’s second-quarter results illustrate a more robust demand and improved performance.

The company has a market cap of $127.97 billion. In the second quarter of 2021, International Business Machines (NYSE:IBM) reported an EPS of $0.4, meeting consensus estimates. In the first quarter, the company’s revenue grew 49% year-over-year to $341.23 million, beating revenue estimates by $9 million. The stock has gained 12% year-to-date.

Just like BlackRock, Inc. (NYSE:BLK), Alphabet Inc. (NASDAQ:GOOGL), Apple Inc. (NASDAQ:AAPL), Intel Corporation (NASDAQ:INTC), Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), Facebook, Inc. (NASDAQ:FB), Nvidia Corporation (NASDAQ:NVDA), and Tesla, Inc. (NASDAQ:TSLA), International Business Machines (NYSE:IBM) is one of the best artificial intelligence stocks to invest in right now.

At the end of the first quarter of 2021, 41 hedge funds in the database of Insider Monkey held stakes worth $1.35 billion in International Business Machines (NYSE:IBM).

Distillate Capital mentioned International Business Machines (NYSE:IBM) in its Q2 2020 investor letter:

“AT&T and IBM exited the portfolio as they no longer met the quality criteria for inclusion with AT&T exceeding the debt limit and IBM falling out due to deteriorating long-term fundamental stability.”

10. DocuSign, Inc. (NASDAQ:DOCU)

Number of Hedge Fund Holders: 41

Electronic agreement management provider DocuSign, Inc. (NASDAQ:DOCU) is ranked tenth on the list of 12 best artificial intelligence stocks to invest in right now. The San Francisco-based artificial intelligence company provides its users a platform for e-signature technology and agreement management. DocuSign, Inc. (NASDAQ:DOCU) has over 1 million customers in over 180 countries including Microsoft Corporation’s (NASDAQ:MSFT) Microsoft Office 365.

In 2020, DocuSign, Inc. (NASDAQ:DOCU) grew its AI-powered platform with its analytics solution DocuSign Analyzer which creates a streamlined process from preparing to managing agreements. Shares on DOCU grew 52% over the last twelve months.

On July 9, Piper Sandler analyst Rob Owens raised the firm’s price target from $300 per share to $330 per share and kept his Overweight rating on DocuSign, Inc. (NASDAQ:DOCU).

In the first quarter of 2021, DocuSign, Inc. (NASDAQ:DOCU) reported an adjusted EPS of $0.44, beating consensus by $0.16. The company’s revenue in the first quarter of 2021 came in at $469.1 million, a 58% increase year-over-year, beating consensus estimates of $437.81 million. In the second quarter of 2020, the company targets revenue of $479-$485 million. The stock has gained 37% year to date.

At the end of the first quarter of 2021, 60 hedge funds in the database of Insider Monkey held stakes worth $3.23 billion in DocuSign, Inc. (NASDAQ:DOCU).

ClearBridge Investments mentioned DocuSign, Inc. (NASDAQ:DOCU) in its Q2 2021 investor letter:

“We expect rapidly growing disruptors will comprise roughly a quarter of portfolio assets over time and repositioning over the next several quarters will focus on increasing our allocation to these stocks. Our objective with disruptors is to purchase companies early in the development of their market opportunity. DocuSign, a new purchase in the first quarter that we added to significantly over the last three months, is a company we have been following since it was private. Although the growth of its esignature business accelerated during COVID-19 lockdowns, DocuSign is targeting additional markets in today’s anywhere economy and its strong recent results eased fears that the company was simply a pandemic beneficiary.”

9. Tesla, Inc. (NASDAQ:TSLA)

Number of Hedge Fund Holders: 62

California-based electric vehicle firm Tesla, Inc. (NASDAQ:TSLA) operates its battery-powered cars through the use of artificial intelligence specifically for its Autopilot system and Full Self-Driving Beta technology (FSD). Tesla, Inc. (NASDAQ:TSLA) is ranked ninth on the list of 12 best artificial intelligence stocks to invest in right now.

Shares of Tesla, Inc. (NASDAQ: TSLA) rose 5.3% in the last week of July after Elon Musk announced that the business is moving to lithium-iron-phosphate (LFP) cells on a long-term basis.

On August 6, Piper Sandler analyst Alexander Potter reiterated an Overweight rating on Tesla, Inc. (NASDAQ: TSLA) with a $1,200 price target, highlighting the strong demand for battery electric vehicles.

The company has a market cap of $680 billion. In the second quarter of 2021, Tesla, Inc. (NASDAQ: TSLA) reported an EPS of $1.45, beating estimates by $0.47. The company’s second-quarter revenue came in at $11.96 billion, a 98% growth year-over-year, beating estimates by $559.3 million. Shares of Tesla, Inc. (NASDAQ: TSLA) jumped 151% over the last twelve months.

At the end of the first quarter of 2021, 62 hedge funds in the database of Insider Monkey held stakes worth $10.0 billion in Tesla, Inc. (NASDAQ: TSLA).

Baillie Gifford mentioned Tesla, Inc. (NASDAQ:TSLA) in its Q2 2021 investor letter:

“As many countries enjoy a relaxation of Covid restrictions, Mr Market is focussed on short-term beneficiaries of ‘the pleasure after the plague’. There are

interesting parallels with the Roaring 20s here, but to our minds, they extend beyond post-pandemic hedonism. Much of the new wealth created in the 1920s was patchily distributed and accompanied by a pervasive sense that the older generation had let down younger people. In 1920, John F. Carter, an irate 23-year-old wrote “the older generation had certainly pretty well ruined this world before passing it on to us. We have been forced to live in an atmosphere of ‘tomorrow we die,’ and so, naturally, we drank and were merry.”

In the field of energy meanwhile, Tesla has begun a pioneering shift away from using cobalt within its batteries. Its lithium iron phosphate (LFP) technology (already used in flagship energy storage products) could underpin not just the automotive ambitions but also the ramp up of Tesla’s grid-scale energy storage offering which will be key to accelerating the demise of dirty peaker plants.”

8. Nvidia Corporation (NASDAQ:NVDA)

Number of Hedge Fund Holders: 80

Nvidia Corporation (NASDAQ:NVDA) is ranked eighth on the list of 12 best artificial intelligence stocks to invest in right now. The California-based multinational technology company operates as one of the leading AI computing firms worldwide. One of the platforms Nvidia Corporation (NASDAQ:NVDA) operates is NVIDIA DGX Station, the world’s first personal supercomputer for developing cutting-edge AI.

In 2020, NVIDIA Corporation (NASDAQ:NVDA) announced its $40 billion acquisition of UK-based semiconductor producer Arm Holdings. However, the acquisition is still under regulatory approval. Shares of NVDA rose 81% over the last twelve months.

On August 6, Hans Mosesmann of Rosenblatt raised the price target of NVIDIA Corporation (NASDAQ:NVDA) to $250 per share from $200 per share and kept his Buy rating on the stock. The analyst believes Nvidia will have an earnings power of over $6 per share for the full year 2024. Shares of NVIDIA Corporation (NASDAQ:NVDA) climbed 42% in the last three months.

Just like BlackRock, Inc. (NYSE:BLK), Alphabet Inc. (NASDAQ:GOOGL), Apple Inc. (NASDAQ:AAPL), Intel Corporation (NASDAQ:INTC), Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), Facebook, Inc. (NASDAQ:FB), and Tesla, Inc. (NASDAQ:TSLA), Nvidia Corporation (NASDAQ:NVDA) is one of the best artificial intelligence stocks to invest in right now.

In the first quarter of 2021, NVIDIA Corporation (NASDAQ:NVDA) recorded an EPS of $3.66, beating estimates by $0.38. The company’s first-quarter revenue was $5.66 billion, an 84% increase year-over-year, beating revenue estimates by $25 million. The company expects second-quarter revenue to come in at $6.3 billion.

At the end of the first quarter of 2021, 80 hedge funds out of the 866 tracked by Insider Monkey held stakes in NVIDIA Corporation (NASDAQ:NVDA), worth roughly $6.20 billion.

Baillie Gifford mentioned Nvidia Corporation (NASDAQ:NVDA) in its Q2 2021 investor letter:

“Short-term share price movements are not a good measure of a company’s long-term value. Our focus is, as always, on the business fundamentals of companies over five to ten years and beyond.

Among the top contributors to Fund performance in the second quarter was NVIDIA. NVIDIA continues to deliver robust fundamental performance. Revenues grew 84% year-on-year, driven by growth in Gaming, Data Center and Professional Visualisation areas. Its data center business is expanding as different industries worldwide adopt NVIDIA AI to help with computer vision, conversational AI and natural language understanding. NVIDIA continues to innovate in many areas, from gaming, cloud computing, AI, robotics, self-driving cars, to genomics and computational biology. It is also progressing with its planned acquisition of semiconductor design company Arm, which if successful could unlock further growth potential.”

7. Intel Corporation (NASDAQ:INTC)

Number of Hedge Fund Holders: 83

Multinational technology company Intel Corporation (NASDAQ:INTC) is ranked seventh on the list of 12 best artificial intelligence stocks to invest in right now. The California-based microprocessor provider also offers unparalleled AI ecosystems that provide end-to-end software resources.

In 2020, Intel Corporation (NASDAQ:INTC) grew its AI operations and acquired Israel’s machine learning startup Cnvrg.io. The purchase strengthened INTC’s AI and machine learning platform. Shares of Intel Corporation (NASDAQ:INTC) jumped 12% over the last twelve months.

On July 29th, Argus analyst Jim Kelleher raised the price target of Intel Corporation (NASDAQ:INTC) to $120 per share from $106 per share and kept his Buy rating on the stock.

The company has a market cap of $218.75 billion and offers a dividend yield of 2.58% In the second quarter of 2021, the company reported an adjusted EPS of $1.28 beating consensus estimates by $0.22. In the second quarter of 2021, the non-GAAP revenue of Intel Corporation (NASDAQ:INTC) came in at $18.5 billion, up 2% year-over-year and beating estimates of $17.84 billion. Intel Corporation (NASDAQ:INTC) is positive about the progress of the semiconductor industry given the growth in digitalization.

At the end of the first quarter of 2021, 83 hedge funds in the database of Insider Monkey held stakes worth $7.61 billion in Intel Corporation (NASDAQ:INTC).

6. Micron Technology, Inc. (NASDAQ:MU)

Number of Hedge Fund Holders: 100

Micron Technology, Inc. (NASDAQ:MU) ranks 6th on the list of 12 best artificial intelligence stocks to invest in right now. The Idaho-based semiconductor company markets memory and storage solutions. Micron Technology, Inc. (NASDAQ:MU) uses its multi-chip packages to power AI infrastructure.

Micron Technology, Inc. (NASDAQ:MU) first introduced its artificial intelligence development platform in 2019 with the purchase of artificial intelligence (AI) hardware and software technology startup FWDNXT. Early this year, Micron Technology, Inc. (NASDAQ:MU) invested in an in-house artificial intelligence platform that invested funds to earn superior returns.

On July 1st, KeyBanc analyst John Vinh upgraded the price target of Micron Technology, Inc. (NASDAQ:MU) from $115 per share to $120 per share and kept his Overweight rating on the stock. The analyst mentioned that the company’s strong quarterly results are expected to continue throughout 2022.

The company has a market cap of $92.31 billion and offers a dividend yield of 0.49%. In the fiscal third quarter of 2021, Micron Technology, Inc. (NASDAQ:MU) reported an adjusted EPS of $1.88, beating estimates by $0.17. The company’s fiscal third-quarter revenue came in at $7.42 billion, an increase from $5.44 billion in the same quarter of 2020 and beating revenue estimates of $7.23 billion.

Just like Alphabet Inc. (NASDAQ:GOOGL), Apple Inc. (NASDAQ:AAPL), Intel Corporation (NASDAQ:INTC), Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), Facebook, Inc. (NASDAQ:FB), Nvidia Corporation (NASDAQ:NVDA), and Tesla, Inc. (NASDAQ:TSLA), Micron Technology, Inc. (NASDAQ:MU) is one of the best artificial intelligence stocks to invest in right now.

There were 100 hedge funds that reported owning stakes in Micron Technology, Inc. (NASDAQ:MU) at the end of the first quarter. The total value of these stakes at the end of Q1 is $7.62 billion.

Bonsai Partners mentioned Micron Technology, Inc. (NASDAQ:MU) in its Q1 2021 investor letter:

“Micron is a manufacturer of memory semiconductor chips. Micron appreciated 17.3% during the quarter.

With the semiconductor cycle in full swing, sentiment continued to improve for major DRAM and NAND suppliers. Spot pricing for DRAM continues its upward march due to supply shocks across the industry and sustained demand levels that continue to outstrip supply.

As a result, Micron showed improving results for the fiscal first quarter, raised guidance intra-quarter for the fiscal second quarter, and offered strong guidance for the fiscal third quarter in both growth and margins.

While the cyclical nature of DRAM hasn’t changed, the cycles themselves continue to become more benign, leading to long-term economic improvement across these businesses. Micron is now continuously profitable, with industry players in a dramatically stronger position than even just five years ago.

The biggest negative surprise in the quarter came from Micron’s exit from its 3D XPoint hybrid memory business. The company also announced its decision to sell its accompanying Utah fab. Fortunately, this development does not alter the investment thesis much since 3D XPoint was an option ticket for future growth. While it’s unfortunate this product didn’t pan out, now is an excellent time to sell a fab, so perhaps it is a blessing in disguise?”

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