In this article, we present 35 non-tech stocks with long-term investment potential.
Investors have been desperately searching for a safer way to play the AI boom that has swept the US stock market over the past few months. Prominent investment bank Goldman Sachs recently released an investor note detailing which sectors of the economy would benefit from the AI craze, replacing obvious bull cases in the technology domain by thoughtful insights on the long-term impact of AI on utilities, industrials, retail, and healthcare. According to analysts at Goldman, AI tools looked set to help companies outside of the technology sector improve productivity and reduce labor costs. The investment titan detailed the insatiable appetite for AI, evidenced by NVIDIA becoming one of the valuable firms in the world over the past year, and noted that the market was yet to reward companies that have downstream AI exposure.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and AI News You Should Not Have Missed.
David Kostin, the chief US equity strategist at Goldman, wrote in the investor note that the AI boom was likely to play out in four key phases. The first phase, per the analyst, had been focused on NVIDIA, the chipmaker that is at the forefront of AI data center build. Kostin detailed that the second phase was likely to be about companies building AI infrastructure. Some examples of this include semiconductor, data center, networking, cloud, and security industries, as well as utilities. So far this year, the returns of stocks working in these industries have dwarfed the returns of the benchmark indexes. The third phase, continued the analyst, would be about companies able to put AI in their products and boost sales in the process. Kostin cautioned that these firms had lost ground against AI stocks in recent months.
The analyst claimed that firms falling in the fourth phase of the AI boom, ones who would enjoy productivity gains after adopting AI, had been ignored by the majority of the market so far. Kostin maintained that it was unclear when these downstream AI stocks, some of which are discussed in detail below, would rally and expand their earnings multiples, but stressed that this would happen eventually. The industrial sector highlights the Goldman theory in action. Since the start of 2023, industrial stocks have jumped close to 30% in value. Of these, the firms that are directly exposed to AI verticals have more than doubled in value. In the fourth quarter of 2023, over 30% of industrial firms mentioned AI in their earnings reports, up from just 10% in the same period the preceding year.
Read more about these developments by accessing 33 Most Important AI Companies You Should Pay Attention To and 20 Industrial Stocks Already Riding the AI Wave.
Our Methodology
For this article, we selected non-tech AI stocks by consulting an investor note from prominent investment firm Goldman Sachs. These stocks are also popular among hedge funds. 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).
A scientist at a computer station, surrounded by a neural network of artificial intelligence code.
Non-Tech AI Stocks For Long Term
35. Hawaiian Electric Industries, Inc. (NYSE:HE)
Number of Hedge Fund Holders: 21
Hawaiian Electric Industries, Inc. (NYSE:HE) engages in the electric utility businesses in the United States. The company is likely to benefit from the projected increase in power prices as AI data center demand leads to shortage of supplies. The renewable energy portfolio of the firm will attract lots of investor interest in the coming months as tech firms look for sustainable power for their AI data centers. Hawaiian Electric generates electricity through wind, solar, photovoltaic, geothermal, wave, hydroelectric, municipal waste, and other biofuels. The company serves suburban communities, resorts, the United States Armed Forces installations, and agricultural operations.
Hawaiian Electric Industries, Inc. (NYSE:HE) is attracting the attention of Wall Street analysts already. Wells Fargo recently upgraded the stock to Equal Weight from Underweight with an unchanged price target of $14. In an investor note, the advisory noted that there was a high probability that a wildfire settlement moves forward for the company, but added that Hawaiian Electric may need to contribute more for that to happen.
34. Jones Lang LaSalle Incorporated (NYSE:JLL)
Number of Hedge Fund Holders: 21
Jones Lang LaSalle Incorporated (NYSE:JLL) operates as a commercial real estate and investment management company. Christian Ulbrich, the CEO of the firm, outlined during the second quarter earnings call how the AI data center prospects were a tailwind for the stock in the long-term. The CEO underlined that the communications and technology sector had performed better than expected in the second quarter, largely because average lease prices had more than doubled as large tech companies took place to support data center operations. The CEO noted that despite a slower start to 2024 across many markets, demand for high-quality space with sustainable solutions and automated technology was expected to drive long-term growth.
Market experts are bullish about the long-term prospects for Jones Lang LaSalle Incorporated (NYSE:JLL). Raymond James analyst Patrick O’Shaughnessy recently raised the price target on the stock to $268 from $246 and kept a Strong Buy rating, underlining that US capital markets activity was up modestly in Q2, growing 2% year over year, according to MSCI Real Capital Analytics, a meaningful improvement from a 12% decline last quarter and snapped a streak of seven consecutive quarters of y/y declines in capital markets activity.
33. Science Applications International Corporation (NASDAQ:SAIC)
Number of Hedge Fund Holders: 24
Science Applications International Corporation (NASDAQ:SAIC) provides technical, engineering, and enterprise information technology (IT) services primarily in the United States. The company recently posted earnings for the second quarter of 2024, reporting earnings per share of $2.05, beating market expectations by $0.20. The revenue over the period was $1.8 billion, up more than 2% compared to the revenue over the same period last year and beating analyst expectations by $30 million. The IT firm increased adjusted diluted EPS fiscal year 2025 guidance to $8.10 – $8.30, and reaffirmed all other financial guidance for the 2025 fiscal year.
Science Applications International Corporation (NASDAQ:SAIC) regularly does business with the US Army, specially in the IT domain. Recent news coming out from defense circles indicates that the US Army is planning to ask contractors to assist with the integration of artificial intelligence technology into its operations. As one of the biggest business partners of the US army, SAIC is in pole position to take advantage of such AI-related business contracts.
32. Kemper Corporation (NYSE:KMPR)
Number of Hedge Fund Holders: 25
Kemper Corporation (NYSE:KMPR) is a diversified insurance holding company that engages in the provision of insurance products to individuals and businesses in the United States. The company has embedded AI tools into the business in a bid to enhance underwriting efficiency, improve claims processing, and bolster fraud detection efforts. One key area where Kemper is using AI is in predictive analytics, which allows the firm to assess risks more accurately by analyzing both historical and real-time data. This helps the company proactively manage potential risks, reducing the likelihood of large claims. AI is also used to personalize customer engagement, enabling Kemper to tailor insurance products and services based on individual customer preferences and behaviors.
Kemper Corporation (NYSE:KMPR) has invited bull calls from Wall Street in recent weeks. Raymond James analyst Gregory Peters has a Strong Buy rating on the stock with a price target of $75. In a recent investor note, the analyst highlighted that Kemper was poised to report strong EPS growth through 2026 due in part to the firm’s outlook for increasing policies in force and the company achieving management’s 96% combined ratio target.
31. First American Financial Corporation (NASDAQ:FAF)
Number of Hedge Fund Holders: 26
First American Financial Corporation (NASDAQ:FAF) provides financial services. The company makes use of AI to enhance title production and real estate transaction services. It is one of the first fintech firms to be awarded multiple patents for AI-driven systems that automate the analysis of property description data, allowing for faster and more accurate title production. The AI tech used by the firm includes natural language processing (NLP) and machine learning techniques to extract and classify data from a variety of sources, significantly streamlining their processes in title insurance and risk management. Their patented AI systems also employ optical character recognition (OCR) to unlock data from millions of public records.
Wall Street analysts view First American Financial Corporation (NASDAQ:FAF) stock with bullish sentiments. Keefe Bruyette recently raised the price target on the shares to $72 from $66 and kept an Outperform rating, noting that the increased estimates for the title insurers were due to expectations that lower interest and mortgage rates will lead to higher volumes in 2025 and 2026. The advisory noted that First American was the best way to play the recovery in volumes within the title industry.
30. Brown & Brown, Inc. (NYSE:BRO)
Number of Hedge Fund Holders: 26
Brown & Brown, Inc. (NYSE:BRO) markets and sells insurance products and services in the United States, Canada, Ireland, the United Kingdom, and internationally. The company is primarily using AI tools to enhance customer and operational outcomes. As part of this plan, it has integrated AI-driven solutions through partnerships with platforms like Gryphon AI to improve their sales performance and compliance management. One example of this is that the insurance firm uses conversation intelligence and real-time coaching tools of Gryphon to help sales teams meet revenue targets more effectively. This system uses AI to analyze and guide sales conversations, improving overall engagement and outcomes.
Brown & Brown, Inc. (NYSE:BRO) is the typical under the radar AI stock. Wells Fargo recently upgraded the shares to Overweight from Equal Weight with a price target of $112, up from $94. In an investor note, the advisory noted that dealing with a potential recession, combined with potential lower interest rates, and the prospects for an extremely active wind season, the best sectors within insurance included personal lines plus insurance brokers, and Brown & Brown provided exposure to the middle-market, where pricing was holding up better than large account space.
29. Clarivate Plc (NYSE:CLVT)
Number of Hedge Fund Holders: 27
Clarivate Plc (NYSE:CLVT) operates as an information services provider in the Americas, the Middle East, Africa, Europe, and the Asia Pacific. The company has beefed up research offerings in recent months with the launch of AI-powered Web of Science Research Intelligence. The firm has also launched two new software solutions, Collecto and Specto. The former enables librarians to more effectively and efficiently manage collections with improved analytics, unified platform and AI. The latter showcases all library digital collections through generative AI, improved workflows and guaranteed long-term access.
Analysts continue to view Clarivate Plc (NYSE:CLVT) with caution. Barclays recently lowered the price target on the stock to $5 from $6 and kept an Underweight rating, noting the company’s Q2 results and lowered fiscal year organic guide once again disappointed investors, and the results and CEO change were a negative read near-term for the shares.
28. Voya Financial, Inc. (NYSE:VOYA)
Number of Hedge Fund Holders: 30
Voya Financial, Inc. (NYSE:VOYA) engages in the provision of workplace benefits and savings products in the United States and internationally. The firm makes use of AI through the Voya Machine Intelligence (VMI) team, a part of the investment group of the firm that uses AI for stock selection and asset management processes. The VMI team employs machine learning to develop investment strategies that combine human insights with data-driven capabilities of AI tools. For instance, the VMI team has been focusing on AI-driven portfolios, such as the Machine Intelligence Dynamic Global Equity strategy, which aims to achieve outperformance through AI-powered insights combined with traditional financial analysis.
Voya Financial, Inc. (NYSE:VOYA) is closely followed on Wall Street. Evercore ISI recently raised the price target on the stock to $82 from $79 and kept an Outperform rating, underlining that the financial firm had announced a definitive agreement to acquire OneAmerica Financial’s full-service retirement plan business. Per the advisory, the initial view was that the deal for OneAmerica’s retirement plan business was more similar to the Voya acquisition of AGI, which has been positive, than Benefitfocus, which had been more challenging.
27. Kohl’s Corporation (NYSE:KSS)
Number of Hedge Fund Holders: 31
Kohl’s Corporation (NYSE:KSS) operates as an omnichannel retailer in the United States. The firm is using AI tools to improve customer and operational experiences. For example, it has incorporated data-based personalization and hyperlocalization efforts in the ecommerce space, offering customers tailored products based on insights derived from their shopping behaviors. AI also supports online search enhancements and optimizes supply chain and logistics. The firm aims to use these AI tools to improve mobile traffic and boost the functionality of the Kohl’s app, which is a key driver of online sales.
Kohl’s Corporation (NYSE:KSS) is viewed with caution on Wall Street. Evercore ISI recently lowered the price target on the stock to $20 from $22 and kept an In Line rating, noting that while Kohl’s was tactically very nimble with solid cost control to beat consensus EPS in Q2, the bigger picture perspective was that since the start of the year the company had lowered FY24 net sales guidance by about 5%, yet only lowered operating margin guidance by 20 basis points. The advisory called this an unsustainable trend.
26. Robert Half Inc. (NYSE:RHI)
Number of Hedge Fund Holders: 33
Robert Half Inc. (NYSE:RHI) provides talent solutions and business consulting services in North America, South America, Europe, Asia, and Australia. The company has won acclaim for incorporating AI into operations. It was recently given the 2024 CIO 100 Award for leveraging AI for business transformation. The company has developed proprietary AI technology to improve the candidate-job matching process, leveraging data from millions of profiles. This AI-based system enhances efficiency by matching skills and experiences of candidates with relevant job opportunities. The firm also offers an ARC (AI Recommended Client) system to help prioritize customer outreach by using machine learning to refine and personalize interactions.
Robert Half Inc. (NYSE:RHI) is viewed with guarded optimism on Wall Street. Truist recently lowered the price target on the stock to $62 from $72 and kept a Hold rating, highlighting the Q2 earnings miss and downside guidance for Q3. In an investor note, the advisory noted that small business clients continued to hold off adding talent amid the challenging operating environment and elevated levels of political uncertainty, though the company was well-positioned for improving economic conditions, with the elections seen as a potential catalyst.
25. Fidelity National Financial, Inc. (NYSE:FNF)
Number of Hedge Fund Holders: 33
Fidelity National Financial, Inc. (NYSE:FNF) provides various insurance products in the United States. The company is slowly waking up to the potential of AI tools in the insurance business. In May this year, the company appointed Jason Nadeau as Chief Artificial Intelligence Officer, a role created to enhance AI-driven initiatives. Nadeau, previously Chief Digital Officer, has been tasked with maximizing the potential of AI to streamline business processes and improve customer experiences. AI plays a key role in automating tasks such as document classification, data extraction, and tracking customer preferences, which enhances operational efficiency.
Fidelity National Financial, Inc. (NYSE:FNF) is keenly followed on Wall Street. Keefe Bruyette recently raised the price target on the stock to $63 from $58 and kept a Market Perform rating, noting that lower insurance rates would likely spur an increase in refinance activity but the real opportunity for the title insurers would be in the event purchase volumes improve year-over-year, as the fee-per-file on residential purchase transactions were roughly 3-times that of refinance transactions.
24. DaVita Inc. (NYSE:DVA)
Number of Hedge Fund Holders: 34
DaVita Inc. (NYSE:DVA) provides kidney dialysis services for patients suffering from chronic kidney failure in the United States. It also offers outpatient, hospital inpatient, and home-based hemodialysis services, and operates clinical laboratories that provide routine laboratory tests for dialysis. The firm uses AI tools primarily to enhance patient care and operational efficiency in dialysis treatments. These AI tools help DaVita monitor patient health, predict treatment outcomes, and optimize care plans. The company has also integrated AI-driven tools to streamline administrative tasks, such as managing patient data and improving the accuracy of diagnoses.
DaVita Inc. (NYSE:DVA) is turning heads on Wall Street. Truist recently raised the price target on the stock to $165 from $150 and kept a Hold rating, noting that the price target raise reflected DaVita’s Q2 results and raised FY24 guidance. In an investor note, the advisory added that it continued to like the core dialysis business of the firm and acknowledged the potential opportunity tied to integrated care longer term.
23. Walgreens Boots Alliance, Inc. (NASDAQ:WBA)
Number of Hedge Fund Holders: 35
Walgreens Boots Alliance, Inc. (NASDAQ:WBA) operates as a healthcare, pharmacy, and retail company in the United States, the United Kingdom, Germany, and internationally. The retail and pharma giant leverages AI in various aspects of business, particularly in healthcare and customer engagement. For example, the company uses AI to manage vast data sets, integrating them into a data platform hosted by Microsoft Azure to drive personalized patient care. It also applies AI for predictive analytics in clinical trials programs, helping identify patients eligible for trials and providing real-world evidence for pharmaceutical research.
Walgreens Boots Alliance, Inc. (NASDAQ:WBA) does not have many admirers on Wall Street. Bank of America analyst Allen Lutz recently lowered the price target on the stock to $7.5 from $11 and kept an Underperform rating, noting that the advisory was reducing its FY25 EPS estimate to $1.75 from $2.23, due in large part to lower US Retail Pharmacy EBIT, and reducing its FY26 EPS forecast to $1.7 from $2.47 for the same reason as well as incrementally higher interest expense.
22. CarMax, Inc. (NYSE:KMX)
Number of Hedge Fund Holders: 35
CarMax, Inc. (NYSE:KMX) operates as a retailer of used vehicles and related products in the United States. The firm has been utilizing AI tools to improve operations, particularly in the area of vehicle inspections for wholesale operations. In collaboration with the AI technology company UVeye, CarMax has integrated AI-powered vehicle assessment tools. These systems use AI and computer vision to automatically inspect vehicles, analyzing elements like the body, tires, and undercarriage for issues such as frame damage, leaks, or missing parts. This helps CarMax provide more detailed and accurate condition reports for vehicles sold at auction, improving transparency for buyers.
CarMax, Inc. (NYSE:KMX) has earned bullish calls from Wall Street. Wedbush analyst Seth Basham recently raised the price target on the stock to $95 from $85 and kept an Outperform rating, noting that in the data the advisory reviewed, there were mixed but positively biased trends. Per the advisory, on the one hand, full portfolio year-over-year loss rates declines sequentially accelerated and year-over-year delinquency rate increases decelerated in Q1, but on the other hand, securitized portfolio trends continued to deteriorate by more than historical seasonal averages in June.
21. Tetra Tech, Inc. (NASDAQ:TTEK)
Number of Hedge Fund Holders: 37
Tetra Tech, Inc. (NASDAQ:TTEK) provides consulting and engineering services in the United States and internationally. Joseph Fong, a high level executive at the firm, underlined the importance of Tetra Tech in the AI revolution during the second quarter earnings call. Fond noted how the US government had approved $200 billion to set up fabrication manufacturing across the country. These facilities, per Fond, needed the production of ultrapure water that was essential for the ultrathin processing with silicon wafers used to create computer chips. He also said his firm was developing a liquid cooling solution for AI data centers.
Tetra Tech, Inc. (NASDAQ:TTEK) has received bullish calls on Wall Street. RBC Capital recently raised the price target on the stock to $259 from $233 and kept an Outperform rating, noting the firm posted better-than-expected Q3 results and the 3rd straight upward revision to FY24 guidance, and remains well positioned to drive organic growth and further margin improvement, while the balance sheet provides optionality on capital allocation.
20. The Williams Companies, Inc. (NYSE:WMB)
Number of Hedge Fund Holders: 37
The Williams Companies, Inc. (NYSE:WMB) operates as an energy infrastructure company primarily in the United States. As AI data center build leads to a major increase in demand for electricity, energy companies are scrambling to keep up with the supply. Alan Armstrong, the CEO of Williams, recently said at an energy conference that his firm was on track to add 12 natural gas projects representing 4.2B cf/day of capacity during 2024-27. The new projects will help meet growing demand from customers in several US Mid-Atlantic and Southeast states, including fast-growing demand for electricity from data centers, per the CEO.
The Williams Companies, Inc. (NYSE:WMB) is viewed positively on Wall Street. RBC Capital analyst Elvira Scotto recently raised the price target on the stock to $47 from $44 and kept an Outperform rating, backing Williams to achieve the top half of its 2024 adjusted EBITDA guidance despite weak natural gas prices, and underlining that the existing backlog of projects will drive growth across the business, with meaningful longer-term growth opportunities driven by power demand.
19. The New York Times Company (NYSE:NYT)
Number of Hedge Fund Holders: 38
The New York Times Company (NYSE:NYT) creates, collects, and distributes news and information worldwide. The company is using AI tools in several domains, including content recommendation, automation in journalism, content moderation, data analysis, ad targeting, and archival and tagging purposes. Media firms are increasingly looking towards AI to complete their digital transformations. The New York Times has partnered with AI startups in this regard to provide content for their large language models. These models will use NYT information to answer queries made by users.
The New York Times Company (NYSE:NYT) continues to be viewed in a bullish manner on Wall Street. Citi recently raised the price target on the stock to $63 from $57 and kept a Buy rating, noting that the advisory was updating its model prior to Q3 results. The advisory added that as the company had recently deployed more of its free cash towards dividends and buybacks, investors had shifted towards free cash flow as a better barometer for valuation.
18. Encompass Health Corporation (NYSE:EHC)
Number of Hedge Fund Holders: 39
Encompass Health Corporation (NYSE:EHC) provides post-acute healthcare services in the United States and Puerto Rico. The healthcare firm uses AI to enhance patient care, particularly in inpatient rehabilitation hospitals. It has developed AI models to predict patient outcomes and support clinical decision-making. These models help identify patients at risk for hospital readmission, acute care transfers, and falls during their rehabilitation stays. For example, the Readmission Prevention Program of the company uses AI to analyze clinical data and alert clinicians when a patient is at high risk of readmission, allowing for timely interventions. The company also plans to expand AI applications in areas like clinical documentation and HR processes to improve efficiency and reduce administrative burdens.
Encompass Health Corporation (NYSE:EHC) has grabbed the attention of Wall Street analysts. Truist recently raised the price target on the stock to $104 from $100 and kept a Buy rating. In an investor note, the advisory cited upbeat management meetings that highlighted solid core trends and the sizable untapped market opportunity, backing the firm for continued strong demand and attractive long-term volume tailwinds.
17. Lear Corporation (NYSE:LEA)
Number of Hedge Fund Holders: 40
Lear Corporation (NYSE:LEA) designs, develops, engineers, manufactures, assembles, and supplies automotive seating, and electrical distribution systems and related components for automotive original equipment manufacturers in North America, Europe, Africa, Asia, and South America. The company has been slowly expanding AI capabilities, primarily in the realm of manufacturing automation. Earlier this year, it announced the acquisition of WIP Industrial Automation, a company specializing in advanced robotics and AI-based solutions, particularly for computer vision and automation in industrial settings. This move is part of a broader strategy to enhance the efficiency, safety, and quality of production processes by integrating AI technologies.
Lear Corporation (NYSE:LEA) is viewed with caution on Wall Street. Deutsche Bank analyst Edison Yu recently resumed coverage of the stock with a Hold rating and $132 price target. The advisory noted that macro headwinds such as weaker global light vehicle production and lower penetration of electric vehicles were likely to keep a lid on the company’s growth in the near-term. Longer term, the timeline to achieving Lear’s 8% margin targets for both E-systems and Seating segments remains unclear, the advisory detailed in a research note
16. News Corporation (NASDAQ:NWSA)
Number of Hedge Fund Holders: 41
News Corporation (NASDAQ:NWSA) is a media and information services company that creates and distributes authoritative and engaging content, and other products and services for consumers and businesses worldwide. The company beat market expectations on earnings per share and revenue in the fourth fiscal quarter. During the earnings call, Robert Thomson, the CEO, said that a landmark agreement with OpenAI was not only expected to be lucrative, but would enable the firm to work closely with a trusted, pre-eminent partner to fashion a future for professional journalism and for provenance. He also said his firm was taking legal steps against AI aggressors who were predatory in the confiscation of content.
Earlier this year, News Corporation (NASDAQ:NWSA) had signed an agreement with OpenAI, the California-based AI startup that launched ChatGPT back in late 2022. Under the terms of the deal, OpenAI would have permission to display content from News Corp in response to user queries. The startup would have access to new and archived content. Some prominent publications that are part of News Corp include The Wall Street Journal, New York Post; The Times, The Sunday Times and The Sun, among others.
15. R1 RCM Inc. (NASDAQ:RCM)
Number of Hedge Fund Holders: 42
R1 RCM Inc. (NASDAQ:RCM) provides technology-driven solutions that transform the patient experience and financial performance of hospitals, health systems, and medical groups. The firm purchased Cloudmed in 2022 and is likely to leverage the technological focus and access to data of the latter to advance an AI program that aims to automate processes to drive further efficiency of economics to be shared with customers. Recent news in this regard is positive. The company has partnered with tech giant Microsoft to improve billing coding productivity. 95 out of 100 top hospitals in the US are customers of Cloudmed,
R1 RCM Inc. (NASDAQ:RCM) purchased Cloudmed in a deal worth $4 billion. With the integration of Cloudmed, R1 can use artificial intelligence and automation to analyze large volumes of medical records, payment data and complex medical insurance models to identify opportunities to deliver additional revenue for healthcare providers. Cloudmed partners with more than 3,100 healthcare providers and helped recover more than $1.5 billion of underpaid or unidentified revenue for clients annually.
14. ZoomInfo Technologies Inc. (NASDAQ:ZI)
Number of Hedge Fund Holders: 43
ZoomInfo Technologies Inc. (NASDAQ:ZI) owns and runs a market intelligence platform. After missing market estimates on earnings for the second quarter, the firm is hoping that new AI features would help it recapture the growth trajectory that has slowed down in recent months. These new features, named ZoomInfo Copilot, are aimed at resuscitating the sales momentum. Some important generative AI features that come bundled in the Copilot include AI-driven recommendations and ratings for prospective customers, as well as the ability to draft emails to clients.
ZoomInfo Technologies Inc. (NASDAQ:ZI) has a lot of admirers on Wall Street. Canaccord analyst David Hynes has a Buy rating on the stock with a price target of $14. In a recent investor note, the advisory noted that there was a mix of good and bad in ZoomInfo’s Q2 results but after sifting through all the noise that accompanied this quarter, execution at the upper end of the market actually sounded a bit better than it has in recent periods.
13. International Paper Company (NYSE:IP)
Number of Hedge Fund Holders: 44
International Paper Company (NYSE:IP) produces and sells renewable fiber-based packaging and pulp products in North America, Latin America, Europe, and North Africa. The firm employs AI tools across various aspects of operations to enhance efficiency, sustainability, and innovation. These include smart manufacturing, where AI-driven technologies are integrated into manufacturing facilities, optimizing production processes and predicting equipment maintenance needs, as well as quality control, where the company uses AI-powered computer vision for defect detection in paper and packaging products. It also uses AI-driven data analytics for the development of customized packaging solutions based on customer needs.
International Paper Company (NYSE:IP) has attracted the attention of analysts on Wall Street. Argus recently upgraded the stock to Buy from Hold with a $52 price target. In an investor note, the advisory detailed that the company’s earnings have been hurt by higher input costs and lower demand, but underlined that demand and pricing will recover heading into 2025. Per analysts at Argus, the firm also has a solid balance sheet and an attractive dividend with a yield of about 4.3%, with the stock also seen as attractively valued at current prices.
12. Universal Health Services, Inc. (NYSE:UHS)
Number of Hedge Fund Holders: 46
Universal Health Services, Inc. (NYSE:UHS) owns and operates acute care hospitals, and outpatient and behavioral health care facilities. The firm is integrating AI technologies in several areas to enhance patient care and operational efficiency. One significant partnership involves working with Hippocratic AI, which develops large language models (LLMs) specifically for healthcare. These models aim to address healthcare challenges, such as improving accessibility and addressing staffing shortages. Additionally, UHS uses Vital Software, an AI-powered platform that helps streamline patient communication and engagement in hospitals. This system assists patients by providing real-time information about their healthcare journey, reducing staff workload, and improving patient satisfaction.
Universal Health Services, Inc. (NYSE:UHS) is one of the most followed health stocks on Wall Street. Baird analyst Michael Ha recently raised the price target on the stock to $274 from $236 and kept an Outperform rating, reiterating the shares as the top hospital pick as 2Q performance confirmed a margin recovery thesis with nearly 15% 2Q adj. EBITDA margins, the highest since 2021. In an investor note, the advisory added that this was only the beginning of a powerful multi-year margin improvement story.
11. Willis Towers Watson Public Limited Company (NASDAQ:WTW)
Number of Hedge Fund Holders: 47
Willis Towers Watson Public Limited Company (NASDAQ:WTW) operates as an advisory, broking, and solutions company worldwide. The company markets WorkVue, an AI-driven software tool that helps organizations redesign jobs to optimize efficiency. It allows companies to analyze tasks at a granular level and reconfigure work by evaluating how technology and talent can be best used. This AI-driven system assists employers in managing workflows, assigning tasks, and enhancing productivity, particularly in response to changing business environments. The firm also uses AI in partnership with Polecat Intelligence to enhance risk analysis capabilities. This collaboration involves developing advanced solutions for managing risks related to reputation, product recall, and other complex insurance challenges.
Willis Towers Watson Public Limited Company (NASDAQ:WTW) has invited bull calls from Wall Street. Truist analyst Mark Hughes recently raised the price target on the stock to $335 from $310 and kept a Buy rating, noting the company was benefiting from healthy organic growth stemming from investments in new talent, platforms, and specialty businesses as well as market tailwinds from regulatory changes, interest rates, employment market pressures, and P&C trends.
10. Marsh & McLennan Companies, Inc. (NYSE:MMC)
Number of Hedge Fund Holders: 51
Marsh & McLennan Companies, Inc. (NYSE:MMC) is a professional services company that provides advice and solutions to clients in the areas of risk, strategy, and people worldwide. One of their key AI initiatives of the firm is the development of a generative AI tool called LenAI, which was created in collaboration with Oliver Wyman Digital. This tool, designed to enhance productivity, helps employees by streamlining tasks such as document analysis, calculations, and internet searches. It has reportedly saved early users an average of eight hours per week by automating repetitive tasks, allowing more focus on complex, value-added work. The company also uses AI to help clients navigate challenges related to risk management, workforce transformation, and customer experience.
Marsh & McLennan Companies, Inc. (NYSE:MMC) is turning heads on Wall Street. Barclays analyst Alex Scott recently initiated coverage of the stock with an Equal Weight rating and $236 price target. The advisory noted that it initiated 19 property and casualty insurers and brokers with a Neutral industry view. The selective approach was focused on navigating both the opportunities and lagged pressures from litigation-related inflation as well as a property market with peaking profitability.
9. Illumina, Inc. (NASDAQ:ILMN)
Number of Hedge Fund Holders: 56
Illumina, Inc. (NASDAQ:ILMN) offers sequencing and array based solutions for genetic and genomic analysis in the United States, Singapore, the United Kingdom, and internationally. The firm uses AI in several advanced genomic applications, with a focus on improving disease risk prediction and drug discovery. One of their key AI innovations is PrimateAI-3D, a deep learning algorithm designed to analyze genetic variants and predict their potential to cause diseases. This AI tool leverages data from both human and non-human primate genomes to improve the accuracy of identifying disease-causing mutations, which is crucial for advancing precision medicine. It has shown success in predicting genetic risk across various populations, helping to address biases in genetic data analysis.
Illumina, Inc. (NASDAQ:ILMN) is viewed positively on Wall Street. Argus recently upgraded the stock to Buy from Hold with a $150 price target. In an investor note, the advisory detailed that the stock had fallen significantly over the past several years amid slowing product sales and antitrust litigation related to the company’s GRAIL acquisition, but the firm appeared to have now turned the corner and was delivering multiple quarters of margin growth, launching new products and services, and introducing ambitious earnings guidance for 2024.
8. IQVIA Holdings Inc. (NYSE:IQV)
Number of Hedge Fund Holders: 59
IQVIA Holdings Inc. (NYSE:IQV) engages in the provision of advanced analytics, technology solutions, and clinical research services to the life sciences industry in the Americas, Europe, Africa, and the Asia-Pacific. The uses AI extensively in various areas of healthcare and pharmaceutical services. Their AI technologies are applied to enhance drug discovery, development, and patient care, helping accelerate clinical trials and improve decision-making for treatments. Some key areas where AI plays a role include drug discovery and clinical trials, real-world data analysis, and talent acquisition. In the second quarter, the firm beat market expectations on earnings per share and revenue.
IQVIA Holdings Inc. (NYSE:IQV) is closely followed on Wall Street. RBC Capital recently initiated coverage of the stock with an Outperform rating and $275 price target. In an investor note, the advisory noted that the company is the largest global contract research organization, helping its biopharma clients bring drugs to market more quickly by leveraging its proprietary data, software and globally-scaled services. Analysts at the advisory added that fading headwinds were setting the stage for a meaningful earnings reacceleration, which should also help re-rate Iqvia’s valuation back toward its historical average.
7. Pinterest, Inc. (NYSE:PINS)
Number of Hedge Fund Holders: 61
Pinterest, Inc. (NYSE:PINS) operates as a visual search and discovery platform in the United States and internationally. The firm uses AI Pinterest uses AI in several key ways to enhance user experience and improve the platform. These include content discovery, where AI algorithms help users discover relevant pins and boards based on their interests and previous interactions, as well as visual search, where the search tool allows users to find pins related to an image they upload and AI analyzes the content of the image to identify similar items or ideas. The firm also uses AI for help in categorizing and tagging images automatically, making it easier for users to find specific types of content. It uses AI to optimize ad targeting too, ensuring that ads are shown to the most relevant audiences based on their interests and engagement.
Pinterest, Inc. (NYSE:PINS) has invited bullish calls from Wall Street. Cantor Fitzgerald analyst Deepak Mathivanan recently initiated coverage of the stock with an Overweight rating and $41 price target. In an investor note, the analyst detailed that the shares have been on a rollercoaster in 2024 and currently lag Nasdaq year-to-date despite FY25 revenues and EBITDA being revised higher, and the investment community was skeptical of the growth outlook after the company’s light Q3 guidance. However, the analyst noted that Pinterest had many promising initiatives in early stages that would help sustain growth.
6. Occidental Petroleum Corporation (NYSE:OXY)
Number of Hedge Fund Holders: 62
Occidental Petroleum Corporation (NYSE:OXY) engages in the acquisition, exploration, and development of oil and gas properties in the United States, the Middle East, and North Africa. The firm uses AI for exploration and production, as AI tools help in analyzing geological data to identify potential oil and gas reserves more accurately. Machine learning models can predict the location of new reserves by analyzing seismic data, well logs, and other geological information. The company also uses AI tools for reservoir management and predictive maintenance. In the latter, AI is employed to predict equipment failures before they occur by analyzing data from sensors and historical maintenance records.
Occidental Petroleum Corporation (NYSE:OXY) is one of the most prominent oil and gas stocks on Wall Street. Susquehanna recently lowered the price target on the stock to $78 from $81 and kept a Positive rating, highlighting that the advisory had reduced natural gas price assumptions through 2026 while keeping crude oil prices flat. The 2025 natural gas price was now $3 per mmbtu from $3.50, and 2026 price was lowered to $3.25 from $3.50. The advisory noted that gas pricing had remained weak in recent months and production would grow in 2025, driven from the return of temporary curtailments and additional pipeline capacity coming online.
5. Coupang, Inc. (NYSE:CPNG)
Number of Hedge Fund Holders: 62
Coupang, Inc. (NYSE:CPNG) is a South Korea-based ecommerce firm. It was one of the first retailers to use AI and machine learning to improve the ecommerce side of the business, setting the company apart from the competition. Coupang uses AI and machine learning to increase inbound efficiency, predict order volume, and improve the algorithms on its main app. AI also runs the fulfillment centers of the ecommerce giant with minimal human involvement. AI tools at the ecommerce firm are used to predict demand, optimize inventory levels, and manage supply chains. By analyzing trends and historical data, the firm can forecast which products will be in demand, reducing overstock and stockouts.
Expert investment advisors on Wall Street are bullish on Coupang, Inc. (NYSE:CPNG) stock. JPMorgan has an Overweight rating on the shares with a $28 price target. In a recent investor note, the advisory mentioned the 140 billion won fine leveled on the firm by authorities in South Korea earlier this year. The fine was imposed for alleged manipulation of search listing algorithms in favor of the own products of the firm. In the note, the advisory noted that the regulatory repercussions for the business may weigh on investor sentiment in the near term.
4. Tenet Healthcare Corporation (NYSE:THC)
Number of Hedge Fund Holders: 64
Tenet Healthcare Corporation (NYSE:THC) operates as a diversified healthcare services company in the United States. Latest reports indicate that the company has agreed to sell 70% of a majority ownership stake in Brookwood Baptist Health in Birmingham to Orlando Health in a deal worth about $910 million. The transaction will include five hospitals – Brookwood Baptist Medical Center, Princeton Baptist Medical Center, Walker Baptist Medical Center, Shelby Baptist Medical Center, Citizens Baptist Medical Center – as well as affiliated physician practices and other related operations. The deal is expected to be completed by the end of this year, subject to regulatory approvals.
Tenet Healthcare Corporation (NYSE:THC) is one of the most followed health stocks in the finance world. Wells Fargo recently raised the price target on the stock to $175 from $145 and kept an Overweight rating, highlighting that hospital results and guides in Q2 generally exceeded expectations. In an investor note, the advisory cited higher estimates and rolling forward for the price target raise, and noted that it expects the second half of 2024 fundamentals to remain fairly strong but 2025/2026 seemed likely to be more normalized.
3. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Holders: 71
Costco Wholesale Corporation (NASDAQ:COST) engages in the operation of membership warehouses in the United States, Puerto Rico, Canada, Mexico, Japan, the United Kingdom, Korea, and Australia. Earlier this week, the firm reported a more than 7% rise in monthly net sales, which came in at above $19.8 billion for August. This was compared to $18.5 billion in net sales over the same month last year. Total company comparable sales for August were 5%, while US comparable sales were 4.7%. For the first 52 weeks of this year, net sales stood at close to $250 billion, an increase of 5% from last year.
Costco Wholesale Corporation (NASDAQ:COST) is one of the favorite retail stocks on Wall Street. Morgan Stanley analyst Simeon Gutman recently raised the price target on the stock to $950 from $855 and kept an Overweight rating, noting that the growth drivers for the retail giant were durable, and both historical performance as well as the overall view of the future of retail pointed to further upside.
2. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 95
Walmart Inc. (NYSE:WMT) engages in the operation of retail, wholesale, and other units worldwide. The company is not the first name that pops into mind when investors think of generative AI, yet the retailer has been using GenAI to improve customer experiences and manage inventory more effectively. The company, during the latest earnings call, highlighted that it had deployed multiple large language models (LLMs) to improve over 850 million pieces of data associated with the product catalog. This task is worth mentioning because it would have required nearly 100 times the current headcount if it had to be completed in the same amount of time manually.
With the help of AI, Walmart Inc. (NYSE:WMT) has also improved the cross-category search in the ecommerce side of the business, helping the firm improve impulse buy numbers. In addition, reports indicate that the retailer is working on the deployment of a new virtual assistant in the online store that would be trained to answer questions using natural language. With the defensive weight the stock carries, there are few better investments in the AI universe.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 308
Amazon.com, Inc. (NASDAQ:AMZN) operates as a technology conglomerate with core interests in the ecommerce business. Latest reports reveal that Amazon will power the latest updates to Alexa, the virtual assistant it has been marketing for years, with the AI model of Anthropic, a California-based AI startup. The reports indirectly reveal the failure of in-house AI models at Amazon, with some sources that spoke to news agency Reuters claiming that the in-house AI models of Amazon have lag times of six or seven seconds and problems with consistency and accuracy. The ecommerce giant will charge $5 or $10 per month for advanced AI features in Alexa.
Amazon.com, Inc. (NASDAQ:AMZN) is viewed with bullish sentiment on Wall Street. Cantor Fitzgerald recently initiated coverage of the stock with an Overweight rating and $230 price target, citing retail margin expansion and AWS acceleration. The advisory said it saw a runway in both, but added that the magnitude was likely to moderate compared to trends over the past two years and the path was unlikely to be linear.
While we acknowledge the potential of Amazon.com, Inc. (NASDAQ:AMZN) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than Amazon.com, Inc. (NASDAQ:AMZN) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: Michael Burry Is Selling These Stocks and Jim Cramer is Recommending These Stocks.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also look at the 13 High Growth Semiconductor Stocks That Are Profitable in 2024 and the 11 Best AI Penny Stocks to Invest in Now.
