In this article, we discuss 5 best AI stocks to buy now. If you want to see more stocks in this selection, go directly to 12 Best AI Stocks To Buy Now.
5. Coupa Software Incorporated (NASDAQ:COUP)
Market Capitalization as of September 5: $4.305 billion
Number of Hedge Fund Holders: 40
Coupa Software Incorporated (NASDAQ:COUP) is a California-based company that employs AI Spend Classification, using machine learning and artificial intelligence to standardize and improve spend across ERP systems. On September 1, Citi analyst Steven Enders initiated coverage of Coupa Software Incorporated (NASDAQ:COUP) with a Buy rating and a $77 price target. Coupa Software Incorporated (NASDAQ:COUP) is now a leader in spend management, with a growing portfolio of solutions for the broader expense process, the analyst told investors. He sees Coupa Software Incorporated (NASDAQ:COUP) emerging as a primary candidate to gain market share of wallet within enterprises. It is one of the best AI stocks to buy now.
Among the hedge funds tracked by Insider Monkey, 40 funds were bullish on Coupa Software Incorporated (NASDAQ:COUP) at the end of Q2 2022, compared to 46 funds in the previous quarter. Mick Hellman’s HMI Capital is the largest position holder in the company, with 2.90 million shares worth about $166 million.
Here is what Aristotle Large Cap Growth Fund has to say about Coupa Software Incorporated (NASDAQ:COUP) in its Q1 2022 investor letter:
“We sold our position in Coupa Software following the company’s fourth quarter 2021 earnings results. The company reported earnings that were disappointing relative to the growth trajectory of both pre-COVID and prior quarters over the past fiscal year. We are concerned that the company is seeing slowing traction in the enterprise sector and felt that the weak topline and billings guidance along with margin compression from increased sales and marketing costs creates too many headwinds for us to be comfortable with. The weak fiscal year 2023 billings guidance when combined with management’s qualitative comments about a strong pipeline is concerning to us, and we believe management has done a disappointing job in providing more transparency around the growth drivers for the business.”
4. Fortinet, Inc. (NASDAQ:FTNT)
Market Capitalization as of September 5: $38.322 billion
Number of Hedge Fund Holders: 43
Ranking 4th on our list of best AI stocks to buy now is FTNT. Fortinet, Inc. (NASDAQ:FTNT) is a California-based company that provides AI-driven cybersecurity solutions that can function at machine speed. Fortinet’s GAAP profit margins are considerably higher than those of its peers, making it one of the best artificial intelligence stocks to buy now. The company expects Q3 revenue to be in the range of $1.105 billion to $1.135 billion, and the diluted non-GAAP net income per share ranging between $0.26 to $0.28.
On September 2, Atlantic Equities analyst Peter Sazel initiated coverage of Fortinet, Inc. (NASDAQ:FTNT) with an Overweight rating and a $76 price target. Fortinet, Inc. (NASDAQ:FTNT) is the second largest cybersecurity player with a “strong track record” of GAAP profitability and free cash flow per share growth, the analyst told investors in a research note.
Among the hedge funds tracked by Insider Monkey, Fortinet, Inc. (NASDAQ:FTNT) was part of 43 public stock portfolios at the end of Q2 2022, up from 39 funds in the prior quarter. Arrowstreet Capital is a prominent stakeholder of the company, with 3.80 million shares worth $215.4 million.
Here is what ClearBridge SMID Cap Growth Strategy has to say about Fortinet, Inc. (NASDAQ:FTNT) in its Q3 2021 investor letter:
“Performance among our cohort of IT and Internet companies was mixed, with enterprise software makers thriving while more consumer-oriented stocks faced headwinds. Cyber security software maker Fortinet benefited from a heightened awareness of the need to protect against sophisticated attacks. We are attracted to the recurring revenue nature of these software companies that are increasingly delivering their products on a subscription basis through the cloud. Software business models also tend to avoid many of the inflationary issues facing companies with a physical product or service.”
3. Baidu, Inc. (NASDAQ:BIDU)
Market Capitalization as of September 5: $48.142 billion
Number of Hedge Fund Holders: 45
Baidu, Inc. (NASDAQ:BIDU) offers internet search services in China, operating through Baidu Core and iQIYI segments. What makes BIDU one of the best AI stocks to buy is its diversified portfolio. Baidu AI Cloud focuses on cloud computing, big data, and AI services, providing stable cloud servers, cloud hosts, cloud storage, and CDN. Baidu Research is also working on future-first fundamental research in artificial intelligence. The company presented Q2 2022 results that exceeded analyst consensus expectations on both top-line and earnings.
On August 31, Citi analyst Alicia Yap maintained a Buy rating on Baidu, Inc. (NASDAQ:BIDU) but lowered the price target on the stock to $204 from $223. The company posted a “solid” Q2, and the analyst believes Baidu, Inc. (NASDAQ:BIDU) remains well positioned to “ride on digitalization of the industrial internet, city urbanization initiatives and carbon neutral target”.
According to Insider Monkey’s data, 45 hedge funds were long Baidu, Inc. (NASDAQ:BIDU) at the end of June 2022, compared to 47 funds in the last quarter. John W. Rogers’ Ariel Investments is the biggest stakeholder of the company, with 2.6 million shares worth $392.7 million.
Here is what Horos Asset Management has to say about Baidu, Inc. (NASDAQ:BIDU) in its Q1 2022 investor letter:
“Although the initial reaction of the Chinese government was passive, it seems that the blacklist published by the SEC, which already includes companies as important as the technology giant Baidu, has shaken things up. Thus, at the beginning of April the CSRC (China Securities Regulatory Commission) announced possible changes in its regulation that would allow this inspection by foreign auditors, provided that the companies previously communicate to this body the state secrets that would be exposed, as well as the sensitive information that they might have to hand over, and the subsequent audit is carried out in a framework of collaboration with the CSRC. In short, a move in the direction desired by the SEC, although still far from the optimal result, that is, unrestricted access to information.
While these negotiations between the two regulatory bodies are progressing, Chinese companies have to decide how best to preserve their interests. In this regard, some companies are already listed on the Hong Kong stock exchange, as is the case of the three major technology companies (Alibaba Group, Tencent Holdings and Baidu).”
2. Five9, Inc. (NASDAQ:FIVN)
Market Capitalization as of September 5: $6.41 billion
Number of Hedge Fund Holders: 51
Five9, Inc. (NASDAQ:FIVN) was incorporated in 2001 and is headquartered in San Ramon, California. The company provides cloud software for contact centers in the United States and internationally. Five9, Inc. (NASDAQ:FIVN) leverages artificial intelligence to automate common tasks. Five9 Intelligent Virtual Agent and Agent Assist are two conversational AI solutions that lower costs while boosting productivity.
After beating market estimates on Q2 results, the company raised its FY 2022 revenue forecast to a range of $780.5 million to $782.5 million, versus the earlier guidance of $770 million to $773 million. The consensus revenue estimate is $772.17 million. Five9, Inc. (NASDAQ:FIVN) now sees FY 2022 non-GAAP EPS of $1.38 to $1.40, versus a prior EPS range of $1.22 to $1.24. The consensus EPS estimate is $1.23. The upbeat guidance makes Five9, Inc. (NASDAQ:FIVN) one of the best AI stocks to buy.
On August 15, Deutsche Bank analyst Matthew Niknam initiated coverage of Five9, Inc. (NASDAQ:FIVN) with a Hold rating and a $120 price target. While he sees Five9, Inc. (NASDAQ:FIVN) having “robust growth potential” in the “meaningfully under penetrated” total addressable market for cloud-based contact center software, as well as a possibility for significantly rising margins, the analyst contended that the stock is “a premium one, but so is valuation”. Regardless of his Hold rating, the analyst contended that his 2023 and 2024 estimates are above consensus.
According to Insider Monkey’s Q2 data, 51 hedge funds were bullish on Five9, Inc. (NASDAQ:FIVN), compared to 52 funds in the last quarter. Christopher Lyle’s SCGE Management is the biggest stakeholder of the company, with 1.5 million shares worth $140.2 million.
Here is what ClearBridge Investments has to say about Five9, Inc. (NASDAQ:FIVN) in its Q1 2021 investor letter:
“Five9 is a cloud-based contact center as a service software provider that is replacing aging on-premise legacy solutions that dominate the installed base. Companies are being forced to modernize and cloud penetration is still low; Five9 is positioned to benefit and should see further growth driven by its cross-selling add-on modules and an AI product that generates high revenue.”
1. Autodesk, Inc. (NASDAQ:ADSK)
Market Capitalization as of September 5: $43.17 billion
Number of Hedge Fund Holders: 53
Autodesk, Inc. (NASDAQ:ADSK) is a California-based company that specializes in 3D design, engineering, and entertainment software and services. The company is foraying into AI-powered designs to improve customer experience. Natural artificial intelligence will assist with subjective aesthetic preferences, synthesize ideas, and suggest new designs.
On August 25, Barclays analyst Saket Kalia raised the price target on Autodesk, Inc. (NASDAQ:ADSK) to $275 from $263 and kept an Overweight rating on the shares. The company’s Q2 billings and bookings were ahead of estimates as multi-year renewals started to trickle in, enabling the fiscal 2023 free cash flow guide to remain unchanged, the analyst told investors in a bullish thesis.
According to Insider Monkey’s data, Autodesk, Inc. (NASDAQ:ADSK) was part of 53 hedge fund portfolios at the end of the second quarter of 2022, compared to 50 funds in the last quarter. Ian Simm’s Impax Asset Management is the leading stakeholder of the company, with roughly 1.3 million shares worth $221.2 million.
Here is what Polen Global Growth has to say about Autodesk, Inc. (NASDAQ:ADSK) in its Q4 2021 investor letter:
“We added to Autodesk on share price weakness. Near-term concerns have made the valuations of the company quite attractive in our view. Autodesk has consistently reported solid results, but management recently provided lower than expected guidance, noting supply chain issues, inflation squeezing its customer margins, global labor shortages, and complications from rolling and unpredictable COVID lockdowns globally. In aggregate, these issues mean that fewer client projects have been completed, despite high end market demand. Ultimately, many of these productivity pressures will likely drive the need to digitize further.
To be clear, much of the pressure on Autodesk’s share price recently was due to expectations, not a decline in the fundamentals of the business. The company continues to grow revenues at greater than mid-teens rates while simultaneously enjoying record renewal rates. While each of the noted factors present real challenges in the near term, we think the lower share price provides long-term investors an opportunity. Given the secular trend towards digitization and the ever-increasing mission-critical nature of Autodesk’s products, we are confident in the long-term investment case.”
You can also take a look at Best Cheap Tech Stocks and Best Value Stocks to Buy for the Next Decade.
