5 Best Artificial Intelligence (AI) Stocks To Buy According to Analysts

In this article, we discuss 5 best artificial intelligence stocks to buy according to analysts. If you want to see more stocks in this selection, check out 15 Best Artificial Intelligence (AI) Stocks To Buy According to Analysts. 

5. iRobot Corporation (NASDAQ:IRBT)

Number of Hedge Fund Holders: 22

Average Upside Potential Based on Analyst Ratings: 38.86%

iRobot Corporation (NASDAQ:IRBT) is a Massachusetts-based company that designs, builds, and sells robots and home innovation products in the United States, Europe, the Middle East, Africa, Japan, and internationally. In August 2020, iRobot Corporation (NASDAQ:IRBT) equipped its vacuum cleaners with a new brain powered by artificial intelligence. It is one of the best AI stocks to invest in. 

On February 13, iRobot Corporation (NASDAQ:IRBT) launched a new restructuring program aimed at achieving net annualized savings of around $14 million. The program involves reducing the company’s workforce by about 7%, which equates to approximately 85 employees. The job cuts will mainly affect certain functions across the company, as iRobot seeks to streamline its operations.

According to Insider Monkey’s fourth quarter database, 22 hedge funds were bullish on iRobot Corporation (NASDAQ:IRBT), compared to 23 funds in the prior quarter. Robert Emil Zoellner’s Alpine Associates is the biggest stakeholder of the company, with 1.50 million shares worth $72.2 million. 

4. Snowflake Inc. (NYSE:SNOW)

Number of Hedge Fund Holders: 75

Average Upside Potential Based on Analyst Ratings: 39.38% 

Snowflake Inc. (NYSE:SNOW) was incorporated in 2012 and is based in Bozeman, Montana. The company provides a cloud-based data platform in the United States and internationally. Snowflake has developed a platform that was specifically created to facilitate machine learning and data science applications that utilize artificial intelligence. The platform enables businesses to prepare data and construct ML models in a straightforward manner, without the need for complicated integrations or associated costs. Snowflake Inc. (NYSE:SNOW) is one of the best AI stocks to invest in. 

On March 3, Rosenblatt analyst Blair Abernethy maintained a Buy rating on Snowflake Inc. (NYSE:SNOW) but lowered the firm’s price target on the shares to $188 from $200 following the Q4 results. The company has reported more restrained spending trends in its international segment, and the younger customer cohorts are experiencing slower-than-anticipated ramp-ups, which is different from previous experiences, the analyst wrote in a research note to investors.

According to Insider Monkey’s Q4 data, 75 hedge funds were bullish on Snowflake Inc. (NYSE:SNOW), compared to 73 funds in the last quarter. Warren Buffett’s Berkshire Hathaway is the largest stakeholder of the company, with 6.12 million shares worth $879.2 million. 

ClearBridge Multi Cap Growth Strategy made the following comment about Snowflake Inc. (NYSE:SNOW) in its Q4 2022 investor letter:

“Names like Airbnb (ABNB) and data warehouse software provider Snowflake Inc. (NYSE:SNOW), which we added to during the quarter, offer better than average growth exposure with strong margins and cash generation that should allow the Strategy to capture better upside in markets with greater price momentum. We partner these higher-growth names with the stability, predictability and economic insensitivity provided by our large cap health care positions. We are striving to strike a balance in the portfolio across varying growth rates, consumer and enterprise as well as international and domestic equity markets.”

3. EPAM Systems, Inc. (NYSE:EPAM)

Number of Hedge Fund Holders: 35

Average Upside Potential Based on Analyst Ratings: 43.87%

EPAM Systems, Inc. (NYSE:EPAM) is a global provider of software development and digital platform engineering services. Their offerings include AI-enabled platforms for data collection, intelligent automation solutions, and conversational AI, which have the potential to transform the banking industry. EPAM Systems, Inc. (NYSE:EPAM) is considered as a top investment option among artificial intelligence stocks.

On February 17, EPAM Systems, Inc. (NYSE:EPAM) received a Positive rating from Susquehanna, but the firm reduced the price target of the company’s shares from $462 to $410. According to Susquehanna, while EPAM Systems, Inc. (NYSE:EPAM) has a distinct engineering culture that enables it to succeed even in challenging times, it has been impacted by broader economic conditions and faced weaker demand than anticipated from two major clients.

According to Insider Monkey’s fourth quarter database, 35 hedge funds were bullish on EPAM Systems, Inc. (NYSE:EPAM), compared to 34 funds in the last quarter. Stephen Mandel’s Lone Pine Capital is the largest stakeholder of the company. 

Here is what White Falcon Capital Management has to say about EPAM Systems, Inc. (NYSE:EPAM) in its Q3 2022 investor letter:

“Half of the portfolio had positive realized and unrealized gains for the year. Out of these, EPAM Systems and Maxar were the largest positive contributors to performance. In addition, our weight in the commodity sector, including the precious metals hedge, produced substantial positive returns.

EPAM Systems is an IT services company. We initiated a position in EPAM after it sold off when Russia invaded Ukraine. The concern was that EPAM had a large part of its workforce in Ukraine, Belarus and Russia. Until then, EPAM had been a high quality compounder whose stock price had gone up 10x in the previous 10 years. It was a strong company that had come across some temporary headwinds and our analysis (Q1 2022 letter) confirmed that the risks are manageable. We bought the stock at $210 per share in Q1 and sold about a quarter of our position in the $400-450 range in Q3. EPAM remains a top 10 position and closed the year at $330 per share.”

2. Amazon.com, Inc. (NASDAQ:AMZN)

Number of Hedge Fund Holders: 240

Average Upside Potential Based on Analyst Ratings: 51.05%

Amazon.com, Inc. (NASDAQ:AMZN) is engaged in e-commerce, cloud computing, online advertising, digital streaming, and artificial intelligence. Amazon Web Services (AWS) provides a comprehensive range of machine learning and artificial intelligence services to cater to various business requirements. In the fourth quarter, the company generated $149.2 billion in revenue, representing an 8.6% YoY increase and surpassing Wall Street’s projections by $3.43 billion. As such, Amazon.com, Inc. (NASDAQ:AMZN) is considered to be one of the top AI stocks for 2023.

On February 14, Loop Capital analyst Rob Sanderson kept a Buy rating and a $140 price target on Amazon.com, Inc. (NASDAQ:AMZN) following its Q4 results. The analyst noted that the retail business has made significant progress in improving its unit economics, excluding one-time charges such as employee severance, impairment charges, and increased insurance liabilities. According to Sanderson, the North America operating margin would have been approximately 2.6% if these one-time expenses were excluded, compared to the reported -0.3%. However, the analyst cautioned that the slowdown and margin compression at AWS is more significant than expected, and he is now taking a more cautious approach to this segment.

According to Insider Monkey’s fourth quarter database, 240 hedge funds were long Amazon.com, Inc. (NASDAQ:AMZN), compared to 269 funds in the earlier quarter. Harris Associates is a significant stakeholder of the company, with 19.3 million shares worth $1.6 billion. 

Weitz Partners III Opportunity Fund made the following comment about Amazon.com, Inc. (NASDAQ:AMZN) in its Q4 2022 investor letter:

“Amazon.com, Inc. (NASDAQ:AMZN), perhaps the ultimate “COVID beneficiary,” has seen its shares dip below pre-pandemic levels as investors brace for a potential recession’s impact both on retail spending as well as slowing adoption of Amazon’s cloud infrastructure service, Amazon Web Services.

Meta, Alphabet, Amazon and CarMax were all top detractors for the quarter and calendar year periods (FIS and Liberty Broadband, respectively, complete the quarterly and calendar-year detractor lists.) To varying degrees, each is managing through cyclical challenges during a period of substantial investor pessimism. Drawdowns of this magnitude are painful, and it may be prudent for management to moderate the pace of some investments, but we remain encouraged by their long-term focus. In the short run, cutting spending indiscriminately to “defend earnings” may lessen the pain of a drawdown, but it seldom grows a company’s business value — the ultimate prize.”

1. Veritone, Inc. (NASDAQ:VERI)

Number of Hedge Fund Holders: 7

Average Upside Potential Based on Analyst Ratings: 78.56%

Veritone, Inc. (NASDAQ:VERI) was incorporated in 2014 and is headquartered in Denver, Colorado. The company provides artificial intelligence computing solutions in the United States and the United Kingdom. On January 31, Veritone, Inc. (NASDAQ:VERI) announced that it is anticipating annualized savings of between $12 million and $15 million in the fiscal year 2023. The company plans to reduce some operational costs as part of its efforts to improve its balance sheet, with a focus on boosting profitability. Veritone, Inc. (NASDAQ:VERI) also repurchased $60 million of its debt at a cost of $39 million, which was 65% of the par value. These moves are part of the company’s broader strategy of reducing its cost structure.

On February 15, Roth MKM analyst Darren Aftahi raised the firm’s price target on Veritone, Inc. (NASDAQ:VERI) to $12 from $10 and maintained a Buy rating on the shares ahead of its Q4 results. The analyst noted that Veritone, Inc. (NASDAQ:VERI)’s efforts to control costs and concentrate on commercial AI growth have led to an improvement in share prices. Additionally, Aftahi suggests that Veritone, Inc. (NASDAQ:VERI) has an untapped revenue stream in cross-selling to its customers, and with PandoLogic comps set to ease, the company’s outlook is positive.

According to Insider Monkey’s Q4 data, 7 hedge funds were bullish on Veritone, Inc. (NASDAQ:VERI), compared to 6 funds in the prior quarter. D E Shaw held a prominent stake in the company, comprising 441,409 shares worth $2.3 million. 

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