In this article, we will discuss the 5 best machine learning stocks to invest in. If you want to explore similar stocks, you can go to 10 Best Machine Learning Stocks To Invest In.
5. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 87
Advanced Micro Devices, Inc. (NASDAQ:AMD) offers EPYC CPUs and Radeon Instinct GPUs, two of the world’s top-tier hardware products that facilitate the deployment of the most demanding machine learning applications and makes Advanced Micro Devices, Inc. (NASDAQ:AMD) rank high among the best machine learning stocks to buy now. On September 27, Advanced Micro Devices, Inc. (NASDAQ:AMD) launched the next-generation Ryzen Embedded V3000 Series processors that offer superior CPU performance, DRAM memory transfer rate, CPU core count, and I/O connectivity compared to the company’s V1000 series.
This September, Stifel analyst Ruben Roy initiated coverage of Advanced Micro Devices, Inc. (NASDAQ:AMD) with a $122 price target and Buy rating. The analyst noted that the company has a “strong product roadmap”. On September 23, Morgan Stanley analyst Joseph Moore revised his price target on Advanced Micro Devices, Inc. (NASDAQ:AMD) to $95 from $102 and maintained a buy-side Overweight rating on the shares.
At the end of Q2 2022, 87 hedge funds were bullish on Advanced Micro Devices, Inc. (NASDAQ:AMD) and held stakes worth $4.84 billion in the company. Of those, Fisher Asset Management was the leading shareholder and owned over 25 million shares of the company, which amounts to a stake of $1.92 billion.
Here is what Baron Funds had to say about Advanced Micro Devices, Inc. (NASDAQ:AMD) in its second-quarter 2022 investor letter:
“Advanced Micro Devices, Inc. (NASDAQ:AMD) is a global fabless semiconductor company focusing on high-performance computing technology, software, and products. AMD designs leading high-performance central and graphics processing units (known as CPUs and GPUs) and integrates them with hardware and software to build differentiated solutions for customers.
AMD has been gaining meaningful share in personal computing and server end markets over the past several years driven by the performance of its processors and technology and strong execution against its technology roadmap, and we believe share gains will continue over the coming years from a combination of AMD’s continued advancements and Intel’s stumbles in developing its leading-edge technology.
Additionally, the recently closed acquisitions of Xilinx and Pensando enhance AMD’s positioning within the data center, a key growth engine for the semiconductor industry, and Xilinx specifically opens up several new growth opportunities in new end markets like industrial, automotive, and communications. The company also generates significant cash flow, giving it capital allocation optionality for further M&A and returning capital to shareholders.”
4. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 128
Apple Inc. (NASDAQ:AAPL) makes some of the world’s top-tier computing products and the company’s MacBook is specifically built for machine learning. The company’s M1 and M1 Max processors are specifically designed for machine learning and outperform benchmarks by 11x. The company’s latest M2 chip is 1.4x faster than the M1. Apple Inc. (NASDAQ:AAPL) is expected to lead the machine learning industry in the coming years and is therefore one of the best machine learning stocks to buy now.
Wall Street is bullish on Apple Inc. (NASDAQ:AAPL). On September 29, UBS analyst David Vogt maintained his Buy rating and $185 price target on Apple Inc. (NASDAQ:AAPL). On September 30, Evercore ISI analyst Amit Daryanani reiterated his $190 price target and buy-side Outperform rating on Apple Inc. (NASDAQ:AAPL).
At the close of the second quarter of 2022, 128 hedge funds were long Apple Inc. (NASDAQ:AAPL) and held stakes worth $143 billion in the company. As of June 30, Berkshire Hathaway is the top shareholder in Apple Inc. (NASDAQ:AAPL) and has stakes worth $122 billion in the company. The investment covers 40% of Warren Buffett’s 13F portfolio.
Here is what Distillate Capital Partners LLC had to say about Apple Inc. (NASDAQ:AAPL) in its second-quarter 2022 investor letter:
“Apple was largest new purchase in the quarter, at a 2% weight. Apple underperformed the overall market last quarter, and given very minimal debt, this price weakness translated into a commensurate fall in its enterprise value. For stocks with higher debt levels, it takes a disproportionately bigger market cap drop to achieve the same valuation improvement and this is a key reason we avoid highly leveraged names where significant price weakness can be experienced during a revaluation process. Alongside this decline in EV for Apple, its estimated free cash flows have risen steadily throughout the year. This contrast between a falling enterprise value and rising free cash flow, which is highlighted in Figure 12, made the stock sufficiently better valued such that it entered the portfolio. While Apple’s valuation is now attractive enough to warrant inclusion in the portfolio, it still ranks in the bottom quartile of the portfolio’s holdings and so the stock’s initiating weight is capped at a 2%. This contrasts significantly with Apple’s near-7% position in the S&P 500 benchmark, and reflects both our preference to avoid too much concentration risk as well our goal of ensuring that the overall portfolio valuation is as attractive as possible while balancing characteristics of stability and low indebtedness.”
3. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 153
Alphabet Inc. (NASDAQ:GOOG) is the owner and operator of one of the three biggest cloud platforms in the world, the Google Cloud Platform, and is one of the best machine learning stocks to buy now. Alphabet Inc.’s (NASDAQ:GOOG) cloud platform provides machine learning developers with various services including pre-trained models, datasets, and machine learning libraries, through which developers can build, test, and deploy their custom models.
Wall Street sees upside to Alphabet Inc. (NASDAQ:GOOG). This August, Tigress Financial analyst Ivan Feinseth raised his price target on Alphabet Inc. (NASDAQ:GOOG) to $186 from $183 and maintained a Strong Buy rating on the shares. Over the past three months, Alphabet Inc. (NASDAQ:GOOG) has received 10 Buy ratings from Wall Street analysts and has a consensus Strong Buy rating. The stock’s median price target of $145 represents an upside of 51% from current levels.
At the end of Q2 2022, 153 hedge funds disclosed ownership of stakes in Alphabet Inc. (NASDAQ:GOOG). The total value of these stakes amounted to $22.29 billion. As of June 30, TCI Fund Management owns more than 2.4 million shares of Alphabet Inc. (NASDAQ:GOOG) and is the largest shareholder in the company.
Here is what Lakehouse Capital had to say about Alphabet Inc. (NASDAQ:GOOG) in its second-quarter 2022 investor letter:
“Alphabet Inc. (NASDAQ:GOOG) reported another strong quarterly result despite the tough macroeconomic conditions. Revenue increased by 13% as Search proved resilient, primarily led by strength in the travel and retail verticals. YouTube advertising growth was lighter and moderated due to a tough comparison period and a general softening in brand advertising spend. That said, YouTube’s user engagement and time spent still continues to grow which bodes well for future monetisation opportunities. Google Cloud outpaced the company’s overall growth with revenue increasing by 36% and while it has yet to show any signs of profitability, we remain supportive of Alphabet continuing to reinvest in its cloud business given the size of the market opportunity ahead. On the cost front, the company added another 10,000 employees during the quarter, but notably, the CFO mentioned that hiring will likely slow down over the next twelve months as the company focuses on greater operating efficiency. Overall, we’re pleased with how the company has performed and are confident that management will be able to control costs, if or when the economic environment becomes more challenging.”
2. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 252
Up next among the best machine learning stocks to buy now, we have Amazon.com, Inc. (NASDAQ:AWS), the owner and operator of Amazon Web Services. Amazon Web Services is one of the most widely used cloud platforms for machine learning and deep learning. On September 29, Amazon.com, Inc. (NASDAQ:AMZN) announced that its cloud division, Amazon Web Services, has entered into a strategic agreement with SK Telecom by which the two will jointly develop a new set of computer vision services.
Analysts are bullish on Amazon.com, Inc. (NASDAQ:AMZN). This September, Truist analyst Youssef Squali revised his price target on Amazon.com, Inc. (NASDAQ:AMZN) to $170 from $180 and maintained a Buy rating on the shares. On September 29, Citi analyst Ronald Josey maintained his Buy rating and $185 price target on Amazon.com, Inc. (NASDAQ:AMZN).
At the end of Q2 2022, 252 hedge funds were eager on Amazon.com, Inc. (NASDAQ:AMZN) and held stakes worth $30 billion in the company. As of June 30, Fisher Asset Management owns more than 46 million shares of Amazon.com, Inc. (NASDAQ:AMZN) and is the most prominent investor in the company.
Here is what Lakehouse Capital had to say about Amazon.com, Inc. (NASDAQ:AMZN) in its second-quarter 2022 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN) proved resilient in the face of ongoing macro pressures and delivered a strong quarterly result along with “better-than-feared” guidance for the third quarter. Net sales increased 7% year-on-year (10% constant currency) to $121.2 billion, while operating profit declined 57% to $3.3 billion. The drop in operating profit was attributable not only to external macro factors, such as elevated shipping and fuel costs, but also lower productivity and efficiency costs as a result of some overcapacity on the back of its recent investment cycle. It was pleasing to see that the company has begun to make progress on the more controllable costs, particularly productivity and staffing, with headcount, for example, down almost 100,000 over the quarter. We continue to believe Amazon is well positioned to manage these short-term issues and remains on track to deliver significant profit improvements over the next twelve months.
Management also confirmed that they have not seen any deterioration in Prime membership growth or retention following the 17% increase in Prime fees put through earlier in the year. This is not surprising to us, as in our view, the price increase was more than justified given the tremendous amount of customer value that has been added since the last price increase was implemented back in 2018, which includes the doubling of its fulfilment network and workforce, significant expansion of free same-day delivery and considerable investments in video and music content. Ultimately, we remain positive about Amazon’s future and believe that the company’s scale and market leadership will continue to drive growth for many years to come.”
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 258
Microsoft Corporation (NASDAQ:MSFT) is an industry leader in artificial intelligence software. The company offers Microsoft Azure, a cloud-computing platform that is heavily used by machine learning developers and data scientists across the world. Microsoft Corporation (NASDAQ:MSFT) has the pricing power and brand recognition to maintain Azure’s dominant position in the machine learning industry and as the industry booms, Microsoft Corporation (NASDAQ:MSFT) is expected to be among the key beneficiaries and is, therefore, one of the best machine learning stocks to buy now.
Wall Street is bullish on Microsoft Corporation (NASDAQ:MSFT) and the stock has a consensus Strong Buy rating. On September 29, Raymond James analyst Andrew Marok resumed coverage of Microsoft Corporation (NASDAQ:MSFT) with a buy-side Outperform rating and a $300 price target. Over the past three months, Microsoft Corporation (NASDAQ:MSFT) has received 27 Buy ratings and 3 Hold ratings and has an average price target of $325, which implies an upside of 39% from current levels.
At the end of Q2 2022, 258 hedge funds were bullish on Microsoft Corporation (NASDAQ:MSFT) and held stakes worth $56 billion in the company. Of those, Fisher Asset Management was the most prominent investor in the company and held stakes worth $7.36 billion. The investment covers 5.21% of Ken Fisher’s 13F portfolio.
Here is what Baron Funds had to say about Microsoft Corporation (NASDAQ:MSFT) in its second-quarter 2022 investor letter:
“Shares of Microsoft Corporation, a leading global provider of software solutions, declined 16.6% in the quarter along with the broader software group as well as due to growing concerns of a potential macro-driven slowdown. This is despite the company posting strong quarterly financial results and successfully absorbing headwinds from the war in Ukraine. The company had 21% revenue growth, 23% operating income growth, and 35% growth in Microsoft Cloud (all year-over-year in constant currency), which now represents 47% of total revenues.
As discussed above, we continue to believe Microsoft remains a durable and growing business as companies across all industries look to digitally transform, taking advantage of the continuously expanding solution set Microsoft has to offer.”
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