We recently published a list of 7 lesser-known, under-the-radar AI stocks hedge funds are piling into. Since Deere & Co (NYSE:DE) is part of the list, the stock deserves a deeper look.
The AI-led stock rally that rewarded mega-cap technology stocks has finally started to trickle down to other industry players that were seemingly not related to the AI and tech industry. Consider this: The information technology sector gained about 11% over the past three months, while the S&P 500 utilities sector jumped 18% in the same period. Why? Because investors are scrambling to pile into utilities since they are set to benefit from the dramatic rise in power demand thanks to the data center boom caused by the mass AI adaption. As Nvidia’s CEO Jensen Huang put it in the company’s latest earnings call, the “next industrial revolution” has started with the dawn of AI and across the globe data centers are being “converted into AI factories.”
AI-Led Stock Market Boom: “No Longer Dependent on Just One Stock”
A Wall Street Journal report recently quoted Nadia Lovell, senior U.S. equity strategist, global wealth management at UBS, who said that the market is “no longer dependent on just one stock” when it comes to AI as she sees a “broadening out of the AI trade.”
Insider Monkey’s research backs this notion. Our research recently unlocked several AI stocks that are better than mega-cap AI stocks with soaring valuations. If you are looking for an AI stock that is as promising as Microsoft but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
For this article we first conducted thorough research to see which lesser-known companies are offering products and services set to see demand in the AI revolution. These companies included firms making hardware, software, infrastructure and backend products necessary for mass AI deployment and consumption. From these companies we chose 7 stocks with the highest number of hedge fund investors. 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).
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Deere & Co (NYSE:DE)
Number of Hedge Fund Investors: 48
Agricultural machinery and equipment company Deere & Co (NYSE:DE) may be a surprising entry in the list of AI stocks to buy in 2024, but many analysts believe Deere & Co’s (NYSE:DE) investments in AI would bear fruit in the months and years to come. For example, Deere & Co (NYSE:DE) is using AI to develop autonomous tractors that can recognize weed from plants and differentiate between plants based on quality.
Deere & Co’s (NYSE:DE) See & Spray can scan 2,200 square feet per second using machine learning and vision analysis to optimize spray usage. Earlier this month Deere & Co (NYSE:DE) posted Q1 results. Adjusted EPS in the quarter came in at $8.53, beating estimates by $0.61. Revenue declined 12.4% year over year to $15.24 billion, beating estimates by $1.92 billion. Over the past one year the stock has gained about 7%, and its PE ratio is 11.29, which shows it’s an undervalued play in the agricultural industry.
Deere & Co (NYSE:DE) ranks 4th in Insider Monkey’s list of the 7 Best Under-The-Radar AI Stocks Hedge Funds are Buying.
If you are looking for an AI stock that is as promising as Microsoft but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
