We recently compiled a list of the 11 Trending AI Stocks on Latest News and Ratings. In this article, we are going to take a look at where Accenture plc (NYSE:ACN) stands against the other AI stocks.
The rise of artificial intelligence (AI) is driving significant growth in the data center market. Analysts predict that the demand for data center capacity to support AI workloads will increase significantly due to factors like growing computing power requirements. The need to process large amounts of data and the growing adoption of AI applications across various industries should accelerate the growth.
Likewise, Fortune Business Insights expects the data center market to grow at a Compound Annual Growth Rate (CAGR) of 25.7% between 2024 and 2032. The growth comes as companies and nations prepare a massive capital deployment of $1.8 trillion from 2024 to 2030 to meet the growing demand for computing power worldwide.
The US is one of the countries spearheading the data center investment spree. As part of the Stargate project, the US is poised to play host to a $500 billion investment into data centers, which is expected to bolster the country’s computing capacity to boost AI development. The first $100 billion investment is expected to come up this year.
The Stargate project is expected to give the US a strategic advantage and create thousands of jobs.
“As for the 100,000 jobs the project is supposed to create? Some construction jobs will be created as the data centers are built, but many more (millions more) will be created as the data centers come online. We’ve never had a compute cloud like this—there’s literally no way to calculate the economic impact of this amount of AI compute. It will be massive,” said Shelly Palmer, a tech pundit and consultant,
Amid the investment spree, there are growing concerns over a potential oversupply of data center capacity despite the ever-growing needs as part of the AI boom. Reports that Microsoft is canceling leases for US data center capacity are raising concerns about whether tech giants have secured more AI computing capacity than they needed. The software giant has already canceled data center leases totaling hundreds of megawatts, signaling it could have more capacity in its pipeline than it needs.
According to the Kyndryl AI Readiness Report, 86% of leaders are confident in their AI implementation, but 36% cite ROI as a barrier to adoption. Data centers, the core of the digital economy, support various demanding workloads, emphasizing the need for low-latency, high-bandwidth environments for AI applications. The time to invest is now.
Our Methodology
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds in Q4 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A team of data experts gathered around a computer monitor analyzing customer data.
Accenture plc (NYSE:ACN)
Number of Hedge Fund Holders: 79
Accenture plc (NYSE:ACN) is an information technology services company that provides strategy, consulting, and technology and operation services. It also provides AI consulting services, helping companies design, implement, and manage responsible AI solutions across various business functions. On February 27, the company confirmed a strategic investment through Accenture Ventures in Workhelix.
Workhelix is a tech-enabled services company that helps organizations reap the rewards of their AI investments. As part of the deal, Workhelix solutions are to be integrated into Accenture LearnVantage as the company looks to enhance its AI workforce transformation capabilities. The acquisition aligns with Accenture plc’s (NYSE:ACN) overarching plan to develop specialized AI capabilities through focused investments instead of solely organic expansion. The timing is especially favourable since generative AI implementation is proving difficult for many organizations, which is driving demand for comprehensive transformation services that consider both technological and human factors.
Overall ACN ranks 2nd on our list of the trending AI stocks. While we acknowledge the potential of ACN as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ACN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.
