We recently published a list of 10 Best AI Stocks to Buy According to Reddit. In this article, we are going to take a look at where IONQ Inc. (NYSE:IONQ) stands against other best AI stocks to buy according to Reddit.
On December 4, Jay Jacobs, US Head of Thematics and Active Equity ETFs at BlackRock appeared on CNBC and discussed the significant growth potential for ETFs as we approach 2025, particularly in the context of the accelerating AI infrastructure phase. He noted that while AI adoption is still in its early stages, substantial investments, amounting to around $250 billion annually from major tech companies, are being made to enhance data centers and develop advanced chips. This investment is crucial for making AI more integrated into everyday life and business applications.
Jacobs emphasized that the opportunity in AI extends beyond just mega-cap tech stocks; it encompasses a broader value chain that includes semiconductor and software companies. He mentioned specific ETFs like ARTY (an index-based artificial intelligence fund) and BAI (an actively managed fund) that aim to capture this growth. Additionally, he highlighted the increasing importance of cybersecurity as data becomes more valuable, suggesting that companies will invest more in protecting their data assets. This trend is reflected in ETFs such as IHAK, which focuses on cybersecurity firms benefiting from this heightened demand.
Dave Nadig, an ETF expert and Financial Futurist, added insights on how AI will shape ETF investing by pointing to the infrastructure needs that arise from increased energy consumption driven by AI technologies and electric vehicles. He noted that companies involved in power generation and utilities are becoming increasingly relevant as they adapt to rising electricity demands. Both experts agreed on the critical role of physical infrastructure in supporting technological advancements, emphasizing that real-world resources like energy and materials are essential for the ongoing development of AI technologies.
Dan Ives, Global Head of Technology Research at Wedbush Securities, also believes the tech market is set for significant growth driven by advancements in AI. He expects AI software companies to play a key role in this expansion, as he mentioned in a CNBC interview on November 25. We discussed this in our article about the 12 Best Artificial Intelligence Stocks To Invest In Under $10, here’s an excerpt from it:
“…Ives believes that the consumption model in enterprise AI, driven by advancements from major chipmakers, will lead to underestimated growth rates of 15% to 20% for these software companies.
Ives also addressed the impact of bond yields and currency strength on the tech trade, noting that while these factors could present headwinds, they are already factored into market guidance. He expressed confidence in a strong demand perspective that could propel the NASDAQ to 20,000 in the next two years, with aspirations for it to reach 25,000 thereafter…”
Our Methodology
We first sifted through Reddit threads to compile a list of the top AI stocks. We then selected the 10 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q3 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
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 quantum computer on a countertop in an engineering laboratory with a technician at work.
IONQ Inc. (NYSE:IONQ)
Number of Hedge Fund Holders: 17
IONQ Inc. (NYSE:IONQ) is dedicated to building the world’s most powerful quantum computers. By leveraging advanced trapped-ion technology, it aims to unlock the potential of quantum computing in order to revolutionize industries such as healthcare, materials science, and AI.
The company reported a strong third quarter in 2024, exceeding revenue expectations with a 102.09% year-over-year revenue improvement. It secured $63.5 million in new contract bookings, including a significant $54.5 million contract with the US Air Force Research Lab (AFRL). The AFRL contract will focus on developing quantum networking technologies, which include compatibility with existing infrastructure, interoperability with various quantum devices, and deployment in diverse environments.
IONQ Inc. (NYSE:IONQ) and the University of Maryland have partnered to advance quantum computing research. The $9 million agreement will provide the University with access to the company’s advanced quantum computers at the National Quantum Lab (QLab). This will help foster innovation and develop a skilled quantum workforce. This company is therefore at the forefront of the quantum computing revolution. With a strong focus on research and development, and strategic partnerships, it’s poised to shape the future of technology.
Overall, IONQ ranks 5th on our list of best AI stocks to buy according to Reddit. As we acknowledge the growth potential of IONQ, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than IONQ 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.