We recently compiled a list of the Top 10 AI News Updates Investors Should Not Miss. In this article, we are going to take a look at where Snowflake Inc (NYSE:SNOW) stands against the other AI stocks.
The Internet of Things, machine learning, and artificial intelligence are the key catalysts driving trends in the semiconductor market. Likewise, the market is expected to grow by $157.1 billion at a compound annual growth rate of 4.5% by 2029, as per estimates by Technavio. The growth would be fueled by the growing need for chips to power the telecom sector, automotive, consumer electronics, IT and communications, healthcare, aerospace and defence, and consumer goods.
Similarly, the growing demand for semiconductors brought on by emerging technologies like 5G, AI, and the Internet of Things (IoT) presents serious challenges for the semiconductor industry. Two to four million gallons of ultra-pure water are needed every day at a single semiconductor fabrication plant, which uses about one Terawatt-hour (TWh) of energy annually.
Additionally, tussles between nations could pose significant challenges to the semiconductor sector, consequently hindering the development of artificial intelligence innovations. Countries passing protectionist measures to curb access to advanced semiconductors are seen as one hindrance to the robust growth projected.
In addition to its potential to improve access to food, healthcare, and education, artificial intelligence (AI) can also aid in developing biological and other weapons, support cyber attacks, aid in surveillance, and contribute to other human rights violations.
“The potential military, intelligence, surveillance, and cyber-enabled applications of these technologies and products pose risks to U.S. national security particularly when developed by a country of concern such as the PRC,” the Treasury Department notification said.
The US has already passed restrictions on Chinese firm’s access to advanced semiconductors and equipment developed by US companies. The restrictions come amid concerns that China’s gaining access to advanced semiconductors could pose significant security risks in the future.
China has also hit back with similar measures. China has blasted the United States for imposing new export restrictions on semiconductors made in the United States, which Washington believes Beijing may use to create the next generation of weapons and artificial intelligence (AI) systems.
“The U.S. has to be prepared for rapid increases in AI’s capability in the coming years, which could have a transformative impact on the economy and on our national security,” U.S. National Security Adviser Jake Sullivan said.
According to US Commerce Department officials, the new controls were intended to undermine China’s domestic semiconductor industry and slow the country’s development of sophisticated AI weapons that could be used in conflict, which pose a threat to US and allied national security. The US was accused of “abusing” export controls, and China’s Commerce Ministry denounced the action, calling it “a significant threat” to the stability of global supply chains and industry.
Amid the robust growth in the semiconductor sector amid a string of protectionist measures by the US and China, there are tremendous opportunities worth pursuing. The development of powerful semiconductors has opened the door for exciting and unique AI innovations increasingly driving stock valuations and shareholder value.
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.
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 software engineer at work, surrounded by a wall of computer monitors connected to a ‘Data Cloud’ platform.
Snowflake Inc (NYSE:SNOW)
Number of Hedge Fund Holders: 71
Snowflake Inc (NYSE:SNOW) is a technology company that provides a cloud-based data platform. It offers Data Cloud, which enables customers to consolidate data into a single source of truth to drive meaningful business insights. Mizuho analyst Gregg Markowitz raised the stock’s price target to $205 from $195 on February 12th and reiterated an Outperform rating.
The bullish rating comes amid improving demand patterns across the software sector, especially in data analytics and software as a service. The price target increase also affirms belief in Snowflake Inc’s (NYSE:SNOW) continued growth and success as it integrates artificial intelligence features into its solutions to strengthen its competitive cloud data platform. The company remains backed by a strong lineup of products, especially in AI, and is ready to contribute to growth.
Overall SNOW ranks 3rd on our list of the AI stocks investors should not miss. While we acknowledge the potential of SNOW 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 timeframe. If you are looking for an AI stock that is more promising than SNOW 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 was originally published at Insider Monkey.