We recently published a list of Top 10 Stocks to Watch as AI Trade Dynamics Change. In this article, we are going to take a look at where Ralph Lauren (NYSE:RL) stands against other top stocks to watch as AI trade dynamics change.
Aswath Damodaran from NYU Stern School of Business said in a recent program on CNBC that AI “buzzwords” are not boosting the market anymore as investors grow more concerned about capital spending.
“I’ve said about data centers we’ve gotten way ahead of the game. I mean, the AI product and service business, which ultimately is what has to pay for all of this, has not taken off in any substantial way. I’m hard-pressed to think about any company making significant money from the AI product and service business.”
Damodaran said that the “sobering” of the AI trade started in September last year and the DeepSeek breakthrough in China also had an impact on the industry.
“It’s part of, I think, what you see almost every buzzword in history in the last four decades. I call these the ‘bar mitzvah moment,’ where people wake up and say, ‘Okay, there’s a lot of promise here, but show me something that I can hang my hat on.’”
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For this article, we picked 10 stocks Wall Street analysts have been talking about lately. With each stock, we have mentioned the 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A man and woman in business attire walking down a street, bags of clothing in hand.
Ralph Lauren Corp (NYSE:RL)
Number of Hedge Fund Investors: 30
Jim Cramer in a latest program on CNBC commented on a new bullish note on Ralph Lauren Corp (NYSE:RL) and said the company is “key” to this market.
“Goldman Sachs is trying to stop the rain in the apparel group, which has just been shelled endlessly, by saying that it’s time to buy Ralph Lauren. Now I’ve done a lot of work in this company. Patrice Louvet is doing a remarkable job. I was shocked at the stock declined so much. David, this stock is, believe it or not, the key to this market because if it can reverse itself and the rain can stop, then we have something to, let’s say, put our hat on. That’s a key. Ralph Lauren is the key to this market, and Goldman’s piece is cogent. I think it’s articulate.”
Goldman Sachs upgraded Ralph Lauren (NYSE:RL) to a Buy rating, citing the brand’s successful strategy and minimal exposure to near-term macro risks like tariffs, shifts in consumer spending, and challenges in department stores.
Goldman analyst Brooke Roach points to Ralph Lauren Corp’s (NYSE:RL) ability to drive market share and expand margins, noting continued growth in comparable sales and average unit retail (AUR).
“Although we’ve been optimistic about Ralph Lauren’s brand momentum in recent quarters, its elevated valuation had kept us cautious,” Roach says. However, she sees the pullback in apparel valuations, due to macro uncertainty and market volatility, as an opportunity to buy into companies like Ralph Lauren, which show resilience even amid a volatile environment.
Overall, RL ranks 10th on our list of top stocks to watch as AI trade dynamics change. While we acknowledge the potential of RL, our conviction lies in the belief that under the radar 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 RL 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.
