7 Best Under-The-Radar AI Stocks Hedge Funds are Buying

2. TD Synnex Corp (NYSE:SNX)

Number of Hedge Fund Investors: 53

TD Synnex Corp (NYSE:SNX) is a an IT infrastructure solutions company. The stock is one of the best AI plays since it helps businesses actually deploy and use AI solutions. In August last year, TD Synnex Corp (NYSE:SNX)  launched “Destination AI,” an aggregation of many AI software and services solutions by TD Synnex Corp (NYSE:SNX). TD Synnex Corp (NYSE:SNX) has over 40 AI vendors for their catalog of pre-validated, ready-to-deploy solutions.

In April, UBS upgraded the stock to Buy and increased its price target to $145 from $115. Based on this price target the stock has an upside potential of about 11% from its current levels.

Of the 919 hedge funds tracked by Insider Monkey, 53 hedge funds reported owning stakes in TD Synnex Corp (NYSE:SNX), significantly up from 28 hedge funds in the previous quarter. This shows a massive rise in hedge fund sentiment as smart money investors are clearly flocking to the stock thanks to its AI-related catalysts.

Ave Maria Value Fund made the following comment about TD SYNNEX Corporation (NYSE:SNX) in its Q3 2023 investor letter:

“A new position was established in TD SYNNEX Corporation (NYSE:SNX), a distributor of information technology (IT) products. Although IT spending has stable secular growth, it is going through a soft patch which allowed us to acquire shares at an attractive price. The distribution of IT products is a low margin, but highly free cash flow generative business that requires significant scale to compete. TD Synnex is the largest distributor with the most scale benefits and has a business model that produces excess free cash flow during softer IT spending periods due to lower inventory investments. This allows TD to return cash to shareholders through buybacks.”