Artificial Intelligence is rapidly expanding in areas like automated customer service bots, medical diagnostics, face and voice recognition software, and algorithmic trading. The best A.I. firms to invest in broadly include semiconductor manufacturers (or “chipmakers”) and business software providers.
Many of these businesses stand to gain from artificial intelligence’s growing potency and the general excitement surrounding the marketplace. A significant contributor to this has been the utility of ChatGPT (featured in today’s list), which has shown tech enthusiasts that significant advancements in A.I. have been realized. As a result, certain stocks are suggesting a prosperous future for shareholders, and Wall Street analysts can’t help but mark such equities with solid buy ratings. And we can’t blame them.
I’ve narrowed our focus to three A.I. stocks that have grabbed Wall Street’s attention. While each stock brings its unique qualities to the table, there’s one thing for sure on which the experts agree: these make for timely, innovative portfolio picks:
Microsoft Corp (MSFT)
I’m sure we’re all familiar with Microsoft Corporation (MSFT), so I’ll leave out my typical business summary and explain why it’s here now. One of MSFT’s wisest investments has been OpenAI, the company responsible for powering ChatGPT. This great chatbot reached 100 million monthly active users in January, only two months after its launch. This gives MSFT’s ChatGPT the distinction of historically having the most incredible consumer-based growth rate of any online end-user program. MSFT has utilized OpenAI for its search engine Bing, whose newest version’s A.I. tech should help consumers get faster and more accurate search results without visiting many sites or dealing with other inconveniences.
MSFT’s earnings figures were hit-and-miss for the fiscal year 2022. Yet, MSFT holds a market cap of close to $1.9 trillion and has a surprisingly safe beta figure of 0.92. For the current quarter, MSFT shows sales of over $51 billion and an EPS of $2.24 per share. MSFT, most recently, led a debt-to-equity ratio of 34.78%. One feature that MSFT offers, which isn’t very typical among tech stocks, is its dividend yield. MSFT currently has a yield of 1.09%, which pays shareholders a quarterly dividend of 68 cents per share. Analysts who offer 12-month price projections have given MSFT an average price target of $285, with a high of $325 and a low of $212. The median price represents a 14.3% increase, with its high mark bringing a 30.3% gain. Billionaire investors and stock analysts have recently grown more bullish on MSFT, with nearly everyone conceding on its robust buy rating.
Epam Systems Inc (EPAM)
Indeed, a less conventional pick but a timely one, EPAM Systems Inc (EPAM) is a tech firm that prides itself on giving clients value from beginning to end. Integrated advice, business consulting, and design, EPAM retains a team of testing and quality control experts who work with various platforms and business sectors. EPAM provides consultation, test management, automation, and software application testing services to assist clients in enhancing their current software and assurance procedures. EPAM was founded in 1993 by Arkadiy Dobkin. EPAM’s headquarters rest in Newtown, PA.
EPAM, while much smaller than MSFT, is still a great choice. EPAM’s reputation benefits from its performance, which greatly impressed Wall Street’s expert analysts in the 2022 fiscal year. For the current quarter, EPAM shows $1.2 billion in sales, with an EPS of $2.37 per share. It holds a growing market cap of nearly $18 billion, and the stock is down close to 7% year-to-date. EPAM’s year-over-year growth numbers are all riding in positive territory, including annual revenue, EPS, income, and profit margins. EPAM reports earnings again in early May; until then, it hasn’t missed a beat. With nowhere to move but upward, EPAM has a median price target of $407, courtesy of analysts who’ve provided their 12-month price forecasts. This comes with a high of $460 and a low of $370. Its lowest price point yields over a 20% leap from current pricing, while the average price target takes the stock over 50%. The analysts are in concession regarding EPAM’s hard-to-ignore buy rating… Is now the right time?
CrowdStrike Holdings Inc (CRWD)
CrowdStrike Holdings, Inc (CRWD) offers cybersecurity goods and services to prevent intrusions. CRWD provides managed security services, IT operations, threat hunting, identity protection, log management, cloud-delivered security across endpoints, cloud workloads, identity and data, and threat intelligence. CRWD serves clients on an open-ended, worldwide basis. George P. Kurtz, Gregg Marston, and Dmitri Alperovitch founded CRWD on November 7th, 2011, headquartered in Austin, TX.
Since I last visited CRWD, it has been climbing through 2022’s cryptic muck and into the good graces of skeptical investors, with a debt-to-equity ratio of 56.35% and a solid beta figure of 1.02. CRWD takes each opportunity to show off its $28 billion market cap quite seriously. CRWD has beaten analysts’ EPS and revenue projections by wide margins for the last four reported quarters, most recently by 26.51%, 31.87%, and 33.21%. This trend indicates that analysts weren’t quite wise to what CRWD was up to until after the last year’s quarterly beats ripped off all the bandaids. CRWD currently has an average price target of $155, with a high of $235 and a low of $110. The median price target would give CRWD a 28.5% advantage over current pricing, leaving the stock with a heavy buy rating. CRWD and its peers should be, at the very least, on every investor’s watchlist, if not an immediate buy.