In this article, we discuss the future of artificial intelligence, including 5 predictions about 5 companies. If you want to read about some more AI stocks, go directly to The Future of Artificial Intelligence: 10 Companies, 10 Predictions.
5. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 89
Related Prediction: Improving Products Will Act as Flywheel Effect for Fast and Iterative AI Processes
NVIDIA Corporation (NASDAQ:NVDA) provides graphics, computing and networking solutions. NVIDIA is taking the AI work to the factory floor with a new product, LandingEdge, which is in beta tests with several customers. It captures images from cameras, then runs inference on industrial PCs equipped with NVIDIA Jetson AGX Xavier modules. Jason Chan, product manager for LandingEdge, says the firm aims to improve quality controls, creating a flywheel effect for fast and iterative AI processes through the product.
On December 19, Needham analyst Rajvindra Gill maintained a Buy rating on NVIDIA Corporation (NASDAQ:NVDA) stock and raised the price target to $230 from $200, highlighting that customers of the company are updating to the newest H100 architecture.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in NVIDIA Corporation (NASDAQ:NVDA) with 19.2 million shares worth more than $2.3 billion.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and NVIDIA Corporation (NASDAQ:NVDA) was one of them. Here is what the fund said:
“At the company-specific level, there was a broad correction across the entire portfolio. While four of our holdings contributed to performance, the contribution to absolute returns was less than 100bps combined, as unfortunately none of them was large enough to move the needle. We had 16 investments detracting over 100bps each with NVIDIA (NASDAQ:NVDA), our second largest detractor, costing the Fund 254bps.
NVIDIA’s stock was hit even harder, down 44.4%, impacted by concerns over consumer health, dramatic declines in crypto, and COVID-related lockdowns in China. Despite the sell-off and the increased near-term volatility in its gaming business, NVIDIA’s revenues grew 46% year-over-year with 48% operating margins, driven by continued strength in its data center business as companies across industries adopt AI and ML…(read more)
4. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 140
Related Prediction: Apple Hiring People on Team-lead Level for AI-Focused Department
Apple Inc. (NASDAQ:AAPL) designs, manufactures and markets smartphones, personal computers, tablets, wearables, and accessories. Apple is known for using the very latest AI capabilities on its devices, such as iPhone’s Siri, in the form of machine learning. Abdel-Rahman Mohamed, a postdoctoral researcher at the University of Toronto, believes the company is courting experts from all over the world to build an in-house AI-focused department, noting that Apple is not hiring only at the managerial level, but hiring also people on the team-leading level and the researcher level for the purpose.
On December 19, JPMorgan analyst Samik Chatterjee maintained an Overweight rating on Apple Inc. (NASDAQ:AAPL) stock and lowered the price target to $190 from $200, highlighting that recent supply chain issues at the company’s operations at Hon Hai’s assembly factory in Zhengzhou are expected to be reflected in the company’s December quarter results.
At the end of the third quarter of 2022, 140 hedge funds in the database of Insider Monkey held stakes worth $144 billion in Apple Inc. (NASDAQ:AAPL), compared to 128 in the previous quarter worth $143 billion.
In its Q2 2022 investor letter, Alger Capital, an asset management firm, highlighted a few stocks and Apple Inc. (NASDAQ:AAPL) was one of them. Here is what the fund said:
“Apple Inc. (NASDAQ:AAPL) is a leading technology provider in telecommunications. computing and services. Apple’s iOS operating system is the company’s unique intellectual property and competitive strength. This software drives extremely tight engagement with consumers and enterprises. The engagement is fostering the growing purchase of high-margin services like music, apps, and apple pay. Apple’s shares detracted from performance as management lowered its guidance for the second quarter due to headwinds from the war in Ukraine, adverse foreign currency shifts, and dampened consumer demand associated with the coronavirus in China. Additionally, many investors were concerned that lockdowns implemented to curtail the spread of COVID-19 would impact the production of apple products, however, the manufacturing facilities have resumed activity.”
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 177
Related Prediction: By 2030, Most Social Situations Will be Facilitated by Bots — Intelligent-Seeming Programs that Interact in Human-Like Ways
Meta Platforms Inc. (NASDAQ:META) develops products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, wearables, and in-home devices worldwide. On September 29, Meta CEO Mark Zuckerberg posted on Facebook about the latest AI products of the firm. One of these, called Make-A-Video, features a 20-second clip that was compiled using several text prompts from Meta researchers. Judith Donath, a top AI expert at Harvard University, has outlined how by 2030, most social situations will be facilitated by bots — intelligent-seeming programs that interact in human-like ways.
On December 16, JPMorgan analyst Doug Anmuth upgraded Meta Platforms, Inc. (NASDAQ:META) stock to Overweight from Neutral with a price target of $150, up from $115, noting that shares are down 65% year-to-date as the company has been impacted by Apple privacy changes.
At the end of the third quarter of 2022, 177 hedge funds in the database of Insider Monkey held stakes worth $14.2 billion in Meta Platforms, Inc. (NASDAQ:META), compared to 185 in the preceding quarter worth $18.2 billion.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Meta Platforms, Inc. (NASDAQ:META) was one of them. Here is what the fund said:
“Shares of Meta Platforms, Inc. (NASDAQ:META), the owner of Facebook, the world’s largest social network, fell 28.4% during the second quarter due to quarterly results that missed consensus estimates, driven by the impact of Apple’s new privacy changes in its iOS operating system. These changes have made it harder for Facebook to measure the effectiveness of its advertising across its mobile apps.
In the longer term, we expect Facebook to continue utilizing its leadership in mobile to provide global advertisers targeted marketing capabilities at scale, with substantial monetization optionality ahead in newer areas such as Reels (Meta’s competing solution to TikTok) and e-commerce.”
2. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 252
Related Prediction: Transformative AI Systems Will Become Affordable by the Year 2050
Amazon.com, Inc. (NASDAQ:AMZN) engages in the retail sale of consumer products and subscriptions in North America and internationally. One of the first AI products from the firm was Kiva, automated guided vehicles (AGVs) that could navigate a warehouse using a series of computerized barcode stickers on the floor. Now, a decade later, Amazon has announced the first fully autonomous mobile robot (AMR), Proteus. Ajeya Cotra, who works for the nonprofit Open Philanthropy, has predicted that transformative AI systems, such as the one used by the robot, will become affordable by the year 2050.
On December 19, Evercore ISI analyst Mark Mahaney maintained an Outperform rating on Amazon.com, Inc. (NASDAQ:AMZN) stock and lowered the price target to $150 from $170, highlighting that the dislocated, high quality stock was very appealing for long-term investors.
At the end of the second quarter of 2022, 252 hedge funds in the database of Insider Monkey held stakes worth $30 billion in Amazon.com, Inc. (NASDAQ:AMZN), compared to 271 in the preceding quarter worth $48 billion.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Amazon.com, Inc. (NASDAQ:AMZN) was one of them. Here is what the fund said:
“Amazon.com, Inc. (NASDAQ:AMZN) is the world’s largest retailer and cloud services, provider. Shares of Amazon declined 35% in the quarter due to weaker-than-expected profits resulting from the overcapacity of resources coming out of COVID. We expect Amazon to grow its retail capacity in the coming quarters, enabling it to improve profitability accordingly. Amazon remains one of our largest holdings due to its durable competitive advantages with a leading position in multiple trillion-dollar markets with a long runway for growth (…read more)
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 269
Related Prediction: AI-Capable Azure is Perfect Cloud Platform
Microsoft Corporation (NASDAQ:MSFT) develops, licenses, and supports software, services, devices, and solutions worldwide. Microsoft Azure, often referred to as Azure, is a cloud computing platform operated by Microsoft for application management via world-distributed data centers. It also offers AI-capable services. Gartner, a technological research and consulting firm, has dubbed Microsoft Azure the perfect public cloud platform.
On October 26, RBC Capital analyst Rishi Jaluria maintained an Outperform rating on Microsoft Corporation (NASDAQ:MSFT) stock and lowered the price target to $310 from $380, noting that the company’s first quarter results were decent, but its guidance was rough, with second quarter seen below expectations on a larger-than-expected slowdown in the cyclical consumer businesses and mixed commercial outlook.
At the end of the second quarter of 2022, 269 hedge funds in the database of Insider Monkey held stakes worth $61.2 billion in Microsoft Corporation (NASDAQ:MSFT), compared to 258 in the previous quarter worth $56 billion.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Microsoft Corporation (NASDAQ:MSFT) was one of them. Here is what the fund said:
“Shares of Microsoft Corporation (NASDAQ:MSFT), a leading global provider of software solutions, declined 16.6% in the quarter along with the broader software group as well as due to growing concerns of a potential macro-driven slowdown. This is despite the company posting strong quarterly financial results and successfully absorbing headwinds from the war in Ukraine. The company had 21% revenue growth, 23% operating income growth, and 35% growth in Microsoft Cloud (all year-over-year in constant currency), which now represents 47% of total revenues. (read more…)
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