In this article, we are going to list the 7 unstoppable AI stocks to buy now and also talk about the top trends in the AI space right now.
The Bull Case for AI
On April 20, Matt Bryson, Wedbush Enterprise Hardware Analyst, appeared in an interview on Yahoo Finance where he discussed the major players in the AI industry and how interest rate cuts may have little to no impact on the tech wave. Shares of tech stocks including Advanced Micro Devices, Inc. (NASDAQ:AMD) and Intel Corporation (NASDAQ:INTC) have been down by 15% over the past 30 days, followed by the Philadelphia Semiconductor Index dropping by 10% despite recent highs previously. Despite the pullback in industry activity, Bryson holds a bullish view on artificial intelligence. Bryson highlights the fuel in AI is backed by chip stocks and cloud services providers, lifting NVIDIA Corporation (NASDAQ:NVDA), Advanced Micro Devices, Inc. (NASDAQ:AMD), and Amazon.com Inc (NASDAQ:AMZN). He added that despite the pullback, large tech stocks, especially chip makers, will continue investing in AI in 2025 and post strong growth results. Bryson suggests that high interest rates will certainly weigh on consumer spending in the long run, impacting high multiple stocks such as large chipmakers. He then said that interest rates may have little to no impact on the fundamental landscape of technology and AI. According to Bryson, data center operators like Microsoft Corporation (NASDAQ:MSFT) and Amazon.com Inc (NASDAQ:AMZN) will continue to bet on developing AI applications.
Bryson thinks that NVIDIA Corporation’s (NASDAQ:NVDA) Blackwell, a next-gen semiconductor product, will impact the industry positively. While he is certain that AI hardware and software companies will define parameters of success for the industry, he claims it is uncertain to predict the technological developments in AI at the moment. Bryson also holds a bullish view on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) after NVIDIA Corporation (NASDAQ:NVDA) and talked about the possibility of companies like Microsoft Corporation (NASDAQ:MSFT) and Amazon.com Inc (NASDAQ:AMZN) developing their own semiconductor products, altering Taiwan Semiconductor Manufacturing Company Limited’s (NYSE:TSM) position in the market. Bryson said while he expects the industry to grow, it is difficult to predict what sectors AI might penetrate.
Some Developments in the AI Space
In a groundbreaking update, On May 13, OpenAI launched GPT-4o, a platform capable of working across audio, vision, and text in real-time. The new application takes interactions between humans and computers to the next level. The application can provide outputs in response to audio inputs in 232 milliseconds, with an average of 320 milliseconds. While the new product complements GPT-4 Turbo’s performance on text in English and code, it is also 50% cheaper and much faster. The tool is also equipped to understand vision and audio inputs easily.
On May 20, Microsoft Corporation (NASDAQ:MSFT) launched CoPilot + PCs, designed for artificial intelligence. The new PCs are one of the most intelligent and fastest PCs to be ever built. Its new silicon can perform 40-plus trillion operations per second, has a long battery life, and comes with built-in advanced AI models. Individuals in the custody of the new devices will be able to generate and refine images in real-time using Cocreation and function in over 40 languages using the Live Captions tool. The PCs will be made available starting June 18.
Wall Street is Bullish on Microsoft Corporation (NASDAQ:MSFT). On May 22, analyst firm, Wedbush reiterated an Outperform rating on Microsoft Corporation (NASDAQ:MSFT) and maintained a price target of $500. Based on analyst estimates over the past 3 months, 32 Wall Street analysts held a buy rating on the stock, with an average price target of $491.23 and a high forecast of $600. The stock’s average price target has an upside of 11.88% from its current price of $427.25.
Now that we have discussed the latest developments in the AI space, let’s take a look at the 7 unstoppable artificial intelligence (AI) stocks to buy. You can also read our piece on the best AI stock picks of billionaire Steve Cohen and billionaire Stanley Druckenmiller’s best AI stocks to buy now.
A software engineer coding while surrounded by the latest industry tools and technology.
Our Methodology
To come up with the 7 unstoppable artificial intelligence (AI) stocks to buy we went over four ETFs including iShares U.S. Technology ETF, Fidelity MSCI Information Technology Index ETF, iShares Global Tech ETF, and iShares Expanded Tech Sector ETF, and our rankings of AI companies and AI stocks. We compiled a list of 30 stocks and screened for them on Finviz. We narrowed down our sample to stocks that have gained at least 35% on a year-to-date basis, as of May 23, and selected the 7 with the highest share price gains. Our stocks are listed in ascending order of their YTD gains.
We also added the hedge fund sentiment around each stock. The hedge fund data was taken from Insider Monkey’s database of 933 elite hedge funds as of the first quarter of 2024. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
7 Unstoppable Artificial Intelligence (AI) Stocks To Buy
7. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
YTD Gains as of April 23: 35.29%
Number of Hedge Fund Holders: 76
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) ranks seventh on our list of unstoppable AI stocks to buy. The company’s CrowdStrike Falcon is an AI-native protection platform trained on trillions of security events. Charlotte AI, a product of CrowdStrike Holdings, Inc. (NASDAQ:CRWD), is a generative AI security analyst. It helps companies and individuals speed up the investigation process.
On May 8, CrowdStrike Holdings, Inc. (NASDAQ:CRWD) and Amazon Web Services (AWS) announced a partnership to fuel the development of AI and cloud security applications. The partnership will bring together CrowdStrike’s Falcon Platform and AWS’s endpoint detection and response protection applications. The company will also leverage AI Bedrock and AWS SageMaker to enhance its AI offerings and functionality across all its platforms.
Wall Street is Bullish on CrowdStrike Holdings, Inc. (NASDAQ:CRWD). On 14 May, Trevor Walsh from JMP Securities reiterated a Market Outperform rating on CrowdStrike Holdings, Inc. (NASDAQ:CRWD) and maintained his price target of $400. The stock has buy-equivalent ratings as per 36 out of 37 Wall Street analysts who have covered it over the past three months. As of May 20, the company has an average price target of $398 and a high forecast of $435.
TimesSquare Capital Management LLC stated the following regarding CrowdStrike Holdings, Inc. (NASDAQ:CRWD) in its Q4 2023 investor letter:
“Across the Information Technology universe, we seek companies possessing differentiated capabilities, products, and services. CrowdStrike Holdings, Inc. (NASDAQ:CRWD) provides cloud-delivered protection across endpoints and cloud workloads. Their stock rallied 53% on the heels of solid fiscal third quarter results, with net new annualized recurring revenues accelerating sequentially.”
6. QUALCOMM Incorporated (NASDAQ:QCOM)
YTD Gains as of April 23: 40.31%
Number of Hedge Fund Holders: 78
QUALCOMM Incorporated (NASDAQ:QCOM) is one of the unstoppable AI stocks to buy. The semiconductor company produces hybrid AI architecture applicable to most generative AI applications and devices including phones, laptops, XR headsets, cars, and IoT. QUALCOMM Incorporated (NASDAQ:QCOM) engages in the production of AI hardware, AI software, and AI algorithms.
On May 7, Argus Research maintained a Buy rating on QUALCOMM Incorporated (NASDAQ:QCOM) and increased its price target to $205 from $180. The stock has Buy-equivalent ratings as per the 19 out of 28 Wall Street analysts that have covered it over the past three months. As of May 20, the stock has an average price target of $187.91 and a high forecast of $220.
On May 5, QUALCOMM Incorporated (NASDAQ:QCOM) reported earnings for the fiscal second quarter of 2024. The company reported earnings per share of $2.44, beating estimates by $0.12. It also reported revenue worth $9.39 billion, ahead of market consensus by $39.41 million, with a year-over-year revenue growth rate of 1.27%.
Madison Investment Holdings Inc’s Madison Sustainable Equity Fund stated the following regarding QUALCOMM Incorporated (NASDAQ:QCOM) in its Q4 2023 investor letter:
“QUALCOMM Incorporated (NASDAQ:QCOM) also reported a solid fourth fiscal quarter with better than expected results. The company guided the first quarter ahead of expectations despite headwinds from Samsung as the inventory headwinds dissipate. Qualcomm remains well positioned in the mobile handset market and should benefit as Artificial Intelligence moves to edge devices which could drive an upgrade cycle.”
5. Micron Technology, Inc. (NASDAQ:MU)
YTD Gains as of April 23: 47.97%
Number of Hedge Fund Holders: 115
Micron Technology, Inc. (NASDAQ:MU) is a prominent artificial intelligence stock ranking fifth on our list. The company is home to intelligent infrastructure enabling the development of AI and generative AI applications. Some of its leading AI memory cards include the HBM3E, DDR5, and LPDDR. Its AI storage SSDs include the 9,000, 7,000, and the 6,000 series. On May 1, Micron Technology, Inc. (NASDAQ:MU) announced that it is set to deliver 128GB DDR5 32GB memory to meet the capacity and speed demand of generative AI applications. These memory modules are capable of managing crucial AI and Machine Learning (ML) applications in data centers, support high-performance computing, and have in-memory databases.
Micron Technology, Inc. (NASDAQ:MU) was spotted on 115 investors’ portfolios at the end of Q1 2024. These funds disclosed collective stakes worth $6.14 billion in the company. As of March 31, Citadel Investment Group is the most prominent shareholder in the company and has disclosed a position worth $764.5 million.
Wall Street is Bullish on Micron Technology, Inc. (NASDAQ:MU). On May 20, Morgan Stanley analyst Joseph Moore upgraded the stock to equal weight from underweight and raised his price target from $98 to $130. Over the past 3 months, 24 Wall Street Analysts have held a buy rating on Micron Technology, Inc. (NASDAQ:MU). As of May 20, the stock has an average price target of $137.6 and a high forecast of $225.
4. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
YTD Gains as of April 23: 50.14%
Number of Hedge Fund Holders: 135
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is a semiconductor manufacturing company in Taiwan. The leading AI chipmaker produces a range of discrete semiconductors including small signal transistors, high-voltage rectifiers, switching diodes, and MOSFETs. The company provides support to major AI chip makers including NVIDIA Corporation (NASDAQ:NVDA).
At the close of the first quarter of 2024, 135 hedge funds were long Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) and held stakes worth $16.58 billion in the company. As of March 31, Fisher Asset Management was the top investor in the company and held a stake worth $3.95 billion.
On April 18, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) reported earnings for the fiscal first quarter of 2024. The company reported earnings per share of $1.38, beating estimates by $0.06. It also reported revenue worth $18.23 billion, ahead of market consensus by $224.73 million, with a year-over-year revenue growth rate of 9.69%.
Third Point Management stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q1 2024 investor letter:
“During the quarter, we added to our Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) investment, which we initiated in May of last year. TSMC is coming off its worst year since the Global Financial Crisis, and in the years to come we see a combination of cyclical recovery plus structural growth in AI demand fueling substantial earnings growth for the company.
We view TSMC as the “toll road” of the semiconductor industry, particularly for AI compute. TSMC holds more than 90% market share for leading edge semiconductor manufacturing, where all AI silicon is being processed. Beyond their reliable execution producing some of the most complex products on earth in volume, TSMC has spent decades optimizing for and building ecosystems around their 500+ customers, an advantage that cannot be replicated overnight…” (Click here to read the full text)”
