In this article, we will discuss 8 Best Wide Moat Stocks to Buy According to Analysts
Undoubtedly, global and domestic investors have mastered the art of riding out the highs and lows of the US stock market. They tend to believe that fluctuations in the stock market are short-term, and should be dealt with accordingly.
McKinsey & Company highlighted that, in 2001, the market cap of the companies making up the S&P 500 stood at ~$10 trillion. As of mid-June 2022 (despite the bearish opening), S&P 500 market capitalization touched ~$32 trillion. Also, the mean total yearly returns (including dividends) of the S&P 500 between 1996 to mid-June 2022 was ~9% in nominal terms, or ~6.8% in real terms.
The investors have seen significant fluctuations. S&P 500 saw a strong decline in 2000, 2001, and 2002, with a ~37% decline in 2008 and a ~22% fall in 1H 2022. That being said, between 1996 and mid-June 2022, S&P 500 returns only declined 5 times annually. While there can be significant fluctuations in the US markets, the macroeconomic indicators can help provide a broader overview of the expected performance of equities.
US Fed Rate Cut – It Finally Happened
The decision on the rate cut by the US Federal Reserve was indeed a closely watched one. The apex bank decided to go for a larger 50-bps reduction in interest rates, instead of a more traditional 25-bps rate cut. This decision was more consequential than normal for 2 reasons. Firstly, this rate cut marked the initiation of a long-awaited easing cycle. Therefore, the US Federal Reserve shifted its focus away from the risks related to inflation and towards protecting the labor market and economic expansion.
Secondly, the rate cut decision itself was much more critical and engaging than normal. History suggests that the US Fed provides greater transparency when it comes to decision-making. This means the financial markets are not surprised by the decision as people know what the US Fed is going to do. However, the recent one was not like this, with markets pricing the 25-bps rate cut decision. The move to cut the key rates by 50 basis points should help the US Fed normalize rates more quickly and be ahead of the emergent slowness in the broader labor market. That being said, the US Fed’s forecasts (the dots) don’t reflect this pace continuing beyond September.
The recent report by Russell Investments highlighted that the company expects the US Fed to cut rates by 25 basis points at each of the remaining meetings in 2024. Furthermore, this pace should be sustained into 2025. If the trajectory continues, the US Fed will be down to the company’s expectations of the normal or equilibrium rate of interest of between 3%-3.25% by this time of the next year.
Equity Market Outlook Post Rate Cut
The implications for the rate cut onto equities hang mainly on the fundamental backdrop—i.e., corporate earnings and whether the US economy is heading for a soft or hard landing. In case of a soft landing, Russell Investments believes that the combination of lower rates and resilient fundamentals should benefit select areas of the market such as real estate and small caps. Regarding small caps, in particular, the investment firm expects a ripe environment for skilled active managers to pick quality businesses at more attractive valuations.
In the remainder of 2024 and 2025, the US Fed cuts are expected to have a positive effect on the economy and markets. Analysts at Wells Fargo believe that the global economy should also benefit, as major central banks around the world have already announced the cut rates or will be announcing soon.
Market experts believe that the Fed rate cut expectations have led to the investors rejigging their portfolios and pivoting towards public companies that are interest-rate sensitive. These include dividend companies, telecommunication giants, utilities, and REITs, among others.
Wall Street also believes that the rate cuts should help well-established and financially stable companies to increase their spending and investments, which are likely to reflect in their stock prices in the remainder of 2024 and early 2025.
With this in mind, let us explore the 8 Best Wide Moat Stocks to Buy According to Analysts.
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Our methodology
To list the 8 Best Wide Moat Stocks to Buy According to Analysts, we conducted an extensive online search and sifted through online rankings and VanEck Morningstar Wide Moat ETF. Next, we considered average analysts’ price targets of the selected stocks. Finally, we ranked the stocks according to their potential upside, as of September 21. We also included the hedge fund sentiment around these stocks, as of Q2 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
8 Best Wide Moat Stocks to Buy According to Analysts
8) International Flavors & Fragrances Inc. (NYSE:IFF)
Number of Hedge Fund Holders: 46
Analysts’ Average Price Target: 7.60%
International Flavors & Fragrances Inc. (NYSE:IFF) is the largest specialty ingredients producer globally. It is engaged in selling ingredients for the food, beverage, health, household goods, personal care, and pharmaceutical industries.
Considering the company’s size, it holds an enviable portfolio of market-leading products across multiple industries. Wall Street analysts believe that International Flavors & Fragrances Inc. (NYSE:IFF) enjoys a wide economic moat, stemming from its unique product portfolio and its market position as a dominant producer of indispensable scents, cultures, tastes, proteins, and probiotics. This means that significant breadth in its product portfolio enables the company to cater to a significant number of different markets and producers. This helps International Flavors & Fragrances Inc. (NYSE:IFF) to increase the robustness of its revenue streams.
International Flavors & Fragrances Inc. (NYSE:IFF)’s strategic decision to divest some of the business units, like the Savory Solutions and Flavor Specialty Ingredients businesses, demonstrates the focused approach to streamlining its business and generating revenues by focusing on core growth areas.
The leadership changes might result in further restructuring initiatives, which might help the company’s stock price. This, along with positive near-term trends and ongoing transformation as per consumer demand for health and environmentally friendly products, should aid the company’s revenue growth for the upcoming quarters.
International Flavors & Fragrances Inc. (NYSE:IFF) increased its expectations for FY 2024 and now anticipates FY 2024 sales of $11.1 billion to $11.3 billion as compared to $10.8 billion to $11.1 billion. It expects adjusted operating EBITDA of $2.1 billion to $2.17 billion compared to $1.9 billion to $2.1 billion. It anticipates volume to be 3% to 5% against 0% to 3%, with improvements in the majority of the portfolio.
Mizuho upgraded shares of International Flavors & Fragrances Inc. (NYSE:IFF) from a “Neutral” rating to an “Outperform” rating, increasing the price target from $109.00 to $120.00 on 3rd September 2024. Insider Monkey’s 2Q 2024 database revealed that the company was held by 46 hedge funds.
7) Pfizer Inc. (NYSE:PFE)
Number of Hedge Fund Holders: 84
Analysts’ Average Price Target: 8.77%
Pfizer Inc. (NYSE:PFE) operates as a pharmaceutical company. It provides medicines, vaccines, medical devices, and consumer healthcare products for oncology, inflammation, cardiovascular, and other therapeutic areas.
Pfizer Inc. (NYSE:PFE)’s large size, diverse portfolio of drugs, pipeline advancements, and broad portfolio of patent-protected drugs continue to make up its wide economic moat. It reached more than 192 million patients with its medicines and vaccines in 1H 2024. The company has been tracking well to meet its goal of $4 billion in cost cuts by 2024 end, which should aid in operating margins. Following overinvestment during COVID-19, Pfizer Inc. (NYSE:PFE) continues to reduce costs to adapt to the subdued demand for its COVID-related products. Following cost-cutting initiatives, the company’s operating margin should be able to return to the more typical range of more than 30% before the pandemic.
Pfizer Inc. (NYSE:PFE)’s successful integration of Seagen’s products along with the advancement of its pipeline candidates continue to provide strong competitive advantages. Its cost-realignment and manufacturing optimization programs should help the company save more than $1.5 billion by 2027. Despite the challenges as a result of IRA and generic competition, Wall Street remains optimistic about its commercial strategies and the strength of its core business.
The company raised its full-year 2024 revenue guidance by $1 billion at the midpoint to between $59.5 billion – $62.5 billion and raised adjusted diluted EPS guidance by $0.30 at the midpoint to $2.45 – $2.65.
Analysts at Cantor Fitzgerald restated an “Overweight” rating and gave a price target of $45.00 on the shares of Pfizer Inc. (NYSE:PFE) on 16th September. As of the end of 2Q 2024, Pfizer Inc. (NYSE:PFE) was in the portfolios of 84 hedge funds. Parnassus Investments, an investment management company, released its first quarter 2024 investor letter. Here is what the fund said:
“During the quarter, we added new positions in Pfizer Inc. (NYSE:PFE), NICE and Charter Communications. We purchased Pfizer to capture the potential upside from any turnaround following the COVID-induced boom-bust cycle of the last few years. Pfizer’s stock price sank by more than 40% in 2023 as COVID-19 vaccine revenues rolled off, providing an attractive entry point for us. The company completed its acquisition of Seagen, which should strengthen Pfizer’s pipeline in antibody-drug conjugates (ADC). Pfizer also offers an attractive dividend yield.”
6) U.S. Bancorp (NYSE:USB)
Number of Hedge Fund Holders: 43
Analysts’ Average Price Target: 8.93%
U.S. Bancorp (NYSE:USB) is a diversified financial services company, providing lending and depository services, cash management, foreign exchange, and trust and investment management services.
U.S. Bancorp (NYSE:USB) has a wide economic moat, given the cost advantages and switching costs. The acquisition of Union Bank is expected to offer additional revenue growth, expense synergies, and value for shareholders. U.S. Bancorp (NYSE:USB) has a national scale and a unique mix of fee-generating businesses, which includes payments, corporate trust, wealth management, and mortgage banking. Having a complete product portfolio does equate to certain competitive advantages for the bank as a whole.
U.S. Bancorp (NYSE:USB)’s revenue and earnings are likely to be supported by a range of initiatives. It has been focusing on its payments ecosystem, expanding its branch presence, and pursuing new acquisitions and partnerships. Over the past few years, it expanded its footprint in numerous new population centers and has partnered with State Farm. U.S. Bancorp (NYSE:USB) has been making investments in its payments ecosystem, with a focus on winning more software-centric merchant acquiring business. Also, the banking company continues to cross-sell more payments-related services to corporate banking clients and vice versa.
While the credit outlook has stabilized, U.S. Bancorp (NYSE:USB) anticipates fee revenue growth to be driven by payments, trust investment management fees, and capital markets. Moreover, market experts believe that the banking giant should see positive operating leverage in 2H 2024. Looking forward, U.S. Bancorp (NYSE:USB) anticipates steady net interest income and mid-single-digit growth in non-interest income for FY 2024. Also, the bank expects net interest income in the range of $16.1 billion – $16.4 billion.
In 2Q 2024, the company generated $6.9 billion in net revenue as a result of improved linked quarter net interest income, aided by strong deposit growth, and strong momentum in leveraging its diversified fee income platform to improve the relationships.
Morgan Stanley upped their target price on the shares of U.S. Bancorp (NYSE:USB) from $47.00 to $54.00, giving an “Equal-weight” rating on 30th July. As per Insider Monkey’s 2Q 2024 data, the company was part of 43 hedge funds.
Artisan Partners, an investment management company, released its fourth quarter 2023 investor letter. Here is what the fund said:
“Banks were well represented among our top Q4 performers as the Treasury market rally drove big gains in the bank stocks. U.S. Bancorp (NYSE:USB), PNC Financial Services (PNC) and Bank of America—the three banks we hold in the portfolio—were each among our top five contributors to return. When bank stocks sold off in Q1 due to fears of contagion following Silicon Valley Bank’s failure, we took advantage of the market dislocation by purchasing top-10 US banks USB and PNC at what were, in our view, cheap prices. USB and PNC are banks we have known for years. They are well managed and well capitalized. As large banks, they were less impacted by the turmoil that affected smaller institutions as depositors sought the safest places to store their money. The recent rebound is an example of how our approach of investing in out-of-favor businesses can lead to alpha. USB and PNC are not immune from industry-wide headwinds from higher deposit costs, pressured net interest margins and fleeing deposits. However, we did not see these banks having a similar level of risk, with respect to uninsured deposits and unrealized losses, which contributed in varying degrees to the collapses of other banks in March 2023. As investors, we cannot avoid risk. However, we are willing to take risk if we are being compensated appropriately.”
5) Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 163
Analysts’ Average Price Target: 11.32%
Visa Inc. (NYSE:V) operates as a payment technology company in the US and internationally.
While the company continues to be a leader in the payments industry, market experts believe that its strong network effect and pricing power form a wide economic moat. If customers who are using Visa continue to increase, it will look attractive to the merchants because of a potentially big market. Therefore, when merchants accepting Visa cards increase, the number of customers who plan to use them will also increase. As a result, Visa Inc. (NYSE:V)’s growth for the next decade continues to stem from its large scale.
Strategic partnerships, together with a strong focus on technology, like artificial intelligence (AI), should continue to stem its growth trajectory. Investments in AI should further improve its payment ecosystem and improve sales. Visa Inc. (NYSE:V) aims to capitalize on the $20 trillion global consumer payments opportunity, with a strong focus on acceptance expansion, e-commerce, and product innovation. Visa Inc. (NYSE:V) remains optimistic about sustaining growth in new flows, primarily in Visa Direct and the commercial business.
In 3Q 2024, the company saw its net revenue coming at $8.9 billion, up 10%. This growth was seen on the back of YoY improvement in payments volume, cross-border volume, and processed transactions. Compass Point initiated coverage on the shares of Visa Inc. (NYSE:V) on 4th September. They gave a “Buy” rating, with a price target of $319.00.
Aoris Investment Management, a specialist international equity manager, released its 2Q 2024 investor letter. Here is what the fund said:
“Visa Inc. (NYSE:V) operates the world’s largest payments network, which facilitates the movement of money between merchants, financial institutions, consumers, businesses, and governments.
The company is best known for enabling consumers to make debit and credit card payments. In the year to September 2023, 4.3 billion Visa cardholders made 213 billion transactions on its network, to a total value of US$12.1 trillion.
Compared to cash and cheques, which are still widely used around the world, Visa’s network is a more convenient, secure, and ubiquitous way for consumers to pay. Visa has invested to reduce friction and fraud in the payments experience, to the benefit of both merchants and consumers…” (Click here to read the full text)
4) Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Analysts’ Average Price Target: 14.30%
Microsoft Corporation (NASDAQ:MSFT) is engaged in developing and supporting software, services, devices, and solutions worldwide.
Microsoft Corporation (NASDAQ:MSFT) has a wide economic moat, backed by 2 segments specifically: productivity and business processes and intelligent cloud. Experts believe that customers value the company’s products as stand-alone solutions and its immense product breadth. Moreover, Microsoft Corporation (NASDAQ:MSFT)’s applications are tightly integrated, making the products even more sticky and appealing.
Microsoft Corporation (NASDAQ:MSFT) has adopted a subscription model for its Microsoft 365 software. Therefore, anyone who wants to use the company’s wildly popular suite of apps – such as Word, PowerPoint, and Excel – will be tied into its ecosystem for several years. Experts opine that the company’s revenues should continue to be supported by repeated customer engagement. This engagement helps generate revenue from the initial sale of services, which then allows Microsoft Corporation (NASDAQ:MSFT) to upsell and cross-sell other ones too.
Microsoft Corporation (NASDAQ:MSFT) has plans to raise its capital expenditures, with a majority of this going to the company’s cloud business and towards building its AI infrastructure. The company spent $55.7 billion in FY 2024, which includes ~$19 billion in 4Q 2024.
For FY 2025, the company expects continued double-digit growth in revenue and operating income. Regarding gaming, the Activision acquisition continues to support the company’s strategy of delivering content throughout all of its platforms and building a subscription business.
Analysts at Tigress Financial upped their price target on the shares of Microsoft Corporation (NASDAQ:MSFT) from $475.00 to $550.00, giving it a “Buy” rating on 13th June. Fred Alger Management, an investment management company, released a second-quarter 2024 investor letter. Here is what the fund said:
“Microsoft Corporation (NASDAQ:MSFT) is a beneficiary of corporate America’s transformative digitization. The company operates through three segments: Productivity and Business Processes (Office, LinkedIn, and Dynamics), Intelligent Cloud (Server Products and Cloud Services, Azure, and Enterprise Services), and More Personal Computing (Windows, Devices, Gaming, and Search). During the quarter, shares contributed to performance after the company reported strong fiscal third quarter results, underscoring its leadership position in the cloud and highlighted its role as a primary facilitator and beneficiary of AI adoption. Company revenue growth, operating margin, and earnings growth surpassed consensus expectations. The utility scale Azure cloud business grew 31% in constant currency of which 7% was AI related versus 3% two quarters ago. Further, management noted most of the AI revenue continues to stem from inference rather than training indicating high quality AI applications by Microsoft’s clients. Management also indicated that the significant cost-cutting programs in corporate America are done, suggesting that the cost optimization headwinds previously impacting Azure’s growth are over. Separately, management provided color on their new AI-productivity tool, Copilot, noting that approximately 60% of Fortune 500 companies are already using Copilot, and that the quarter witnessed a 50% increase in Copilot assistance integration within Teams. We continue to believe that Microsoft has the potential to hold a leading position in AI, given its innovative approach and demonstrated high unit volume growth opportunity.”
3) Etsy, Inc. (NASDAQ:ETSY)
Number of Hedge Fund Holders: 36
Analysts’ Average Price Target: 18.72%
Etsy, Inc. (NASDAQ:ETSY) offers e-commerce services. It provides handmade and vintage items, art, and supplies, and regular items like clothing, housewares, paper goods, candles, and other items.
Etsy, Inc. (NASDAQ:ETSY) managed to build a marketplace spanning non-traditional, unique, customizable, and artisanal inventory, deriving a wide moat as a result of the network that grows more valuable as additional buyers and sellers join it. The company’s moat gets further strengthened by its strong position in the niche market, aided by a loyal customer and seller base. Etsy, Inc. (NASDAQ:ETSY)’s focus on improving customer experience, leveraging AI, and continuing to maintain a unique marketplace having high-quality listings should continue to support its growth trajectory.
Market experts opine that there remains a significant opportunity for Etsy, Inc. (NASDAQ:ETSY) to accelerate growth and improve margins. This momentum is expected to be supported by greater economic rents from its two-sided marketplace for artisanal goods because of healthy market share and lack of direct competition.
In 2Q 2024, Etsy, Inc. (NASDAQ:ETSY) saw its consolidated revenue coming at $647.8 million, up by 3.0% YoY, with a take rate of 22.0%. Its positive revenue increase was primarily due to growth in Marketplace revenue, mainly aided by payments revenue and transaction fee revenue from Offsite Ads. For 3Q 2024, the company expects an adjusted EBITDA margin of ~27%.
Piper Sandler reaffirmed a “Neutral” rating on the shares of Etsy, Inc. (NASDAQ:ETSY), giving a price objective of $56.00 on 23rd August.
Oakmark Funds, advised by Harris Associates, released its second quarter 2024 investor letter. Here is what the fund said:
“Etsy, Inc. (NASDAQ:ETSY) is a global marketplace for unique and creative goods that connects millions of buyers and sellers across the world. We first became interested in Etsy in 2017 when Josh Silverman took over as CEO and began transforming the company from a borderline nonprofit into a higher margin, faster-growing enterprise. The Covid-19 pandemic accelerated the company’s already strong fundamental results as millions of new customers flocked to the platform, but like many other Covid-19 beneficiaries, Etsy has since fallen deeply out of favor. In our view, investors today are too focused on the timing of Etsy’s return to growth and are ignoring the company’s positive long-term outlook. We believe the macro environment for Etsy’s product categories will eventually improve and Etsy is poised to benefit. At the same time, we believe Etsy’s continued push into international markets can provide a solid source of revenue growth for the long-term. After the recent sell-off, we were able to purchase shares at a discount to our estimate of intrinsic value.”
2) Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 107
Analysts’ Average Price Target: 22.06%
Adobe Inc. (NASDAQ:ADBE) is engaged in developing, marketing, and supporting computer software products and technologies. Its products enable users to express and use information throughout all print and electronic media.
Adobe Inc. (NASDAQ:ADBE) continues to enjoy wide economic moat, primarily because of its high switching costs. This allows the company to generate returns exceeding its cost of capital. The company’s dominance in content creation software with well-established Photoshop and Illustrator solutions continues to strengthen its economic moat. It was able to add new products and features to the suite with the help of organic development and bolt-on acquisitions to drive its comprehensive portfolio of tools utilized in print, digital, and video content creation. Therefore, Wall Street remains optimistic about the company’s unique value proposition and growth potential.
Adobe Inc. (NASDAQ:ADBE)’s AI-driven products, including Firefly AI models, exceeded 12 billion generations, demonstrating strong adoption. Moving forward, the company’s revenue growth should come from its competitive advantage, which is being strengthened by its key customer wins with well-renowned companies like Amazon, Disney, and the US Treasury. As a result, despite the competition, Adobe Inc. (NASDAQ:ADBE) expects continued growth and record net new ARR in FY 2024.
The company has maintained its strong emphasis on AI and subscription services, which should help in expanding its market presence. For 4Q 2024, Adobe Inc. (NASDAQ:ADBE) expects total revenue in the range of $5.50 billion – $5.55 billion and earnings per share (GAAP) of between $3.58 to $3.63.
Analysts at Wells Fargo & Company initiated coverage on the shares of Adobe Inc. (NASDAQ:ADBE), increasing its price objective from $675.00 to $700.00, giving it an “Overweight” rating on 14th June. Notably, 107 hedge funds reported owning stakes in the company at the end of 2Q 2024, as per Insider Monkey.
Polen Capital, an investment management company, released its second-quarter 2024 investor letter and mentioned Adobe Inc. (NASDAQ:ADBE). Here is what the fund said:
“With Adobe Inc. (NASDAQ:ADBE), in some ways, we see it as a microcosm of the market’s “shoot first, ask questions later” approach to categorizing AI winners and losers. In the early part of last year, Adobe came under pressure with a perception that generative AI (GenAI) would represent a material headwind to their suite of creative offerings. In short order, the company introduced its GenAI offering, Firefly, which shifted the narrative to Adobe as a beneficiary with a real opportunity to monetize GenAI in the near term. Earlier this year, that narrative was again challenged as the company reported a slight slowdown in revenue growth. Results in the most recent quarter were robust as the company raised its full-year forecast across a number of key metrics and showcased better-than-expected results.”
1) Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 216
Analysts’ Average Price Target: 25.31%
Alphabet Inc. (NASDAQ:GOOGL) operates as a holding company. The company offers web-based searches, advertisements, maps, software applications, and other related services.
Alphabet Inc. (NASDAQ:GOOGL) continues to enjoy wide economic moat as a result of significant intangible assets associated with the overall technological expertise in search algorithms and AI (ML and deep learning), together with access to and accumulation of valuable data for advertisers. As a result of these competitive advantages, the company’s network effect has been becoming stronger. With an increasing number of online users and usage, digital ad spending is bound to increase, and Alphabet Inc. (NASDAQ:GOOGL) will be the primary beneficiary. In 2Q 2024, the company’s advertising revenue, which is a significant part of its business, came in at $64.62 billion as compared to an estimate of $64.53 billion.
Also, Android’s huge global market share of smartphones places the company well to continue dominating the mobile search. Wall Street experts believe that Alphabet Inc. (NASDAQ:GOOGL) has been validating its position as a leading AI beneficiary, given the encouraging signs on both consumer adoption of AI Search features and enterprise demand for AI agents and other services in the Cloud.
In 2Q 2024, Alphabet Inc. (NASDAQ:GOOGL) saw its revenues coming at $84.74 billion, surpassing the analysts’ expectations of $84.16 billion. The company’s 2Q 2024 results were aided by strong performance in Google’s Search and Cloud services. The management highlighted the importance of investment in high-growth opportunities and its focus on re-engineering the cost base.
As of the end of the second quarter, 216 hedge funds held stakes in Alphabet Inc. (NASDAQ:GOOGL). BMO Capital Markets reaffirmed an “Outperform” rating on the company’s shares, setting a price target of $222.00 on 16th September.
Patient Capital Management, a value investing firm, released its second quarter 2024 investor letter. Here is what the fund said:
“Alphabet Inc. (NASDAQ:GOOGL) was a top contributor in the second quarter, finally catching up to its peers in the Magnificent 7. The company gained 20.8% in the period following strong first quarter earnings, a new $70B repurchase program (3% of shares outstanding) and the initiation of a cash dividend ($0.20 per share; 0.42% yield). We continue to believe the market underappreciates Google’s exposure to AI with its Gemini model being integrated into search results, YouTube advertising and its cloud offering. We continue to think that the cloud players will be the AI winners in the long-term, with Google being well positioned to take advantage. While the company trades at 24x 2024 earnings, if you remove the money-losing and under-earning businesses, you realize that you are paying below a market multiple for the core Google business. We do not believe there are many other AI winners trading at such an attractive multiple.”
While we acknowledge the potential of GOOGL as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than the ones mentioned on our list but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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