In this article, we will take a look at the 10 stocks that will make you rich in 2023. To see more such companies, go directly to 5 Stocks That Will Make You Rich in 2023.
To make money by investing in the stock market, one ought to follow time-tested investing principles with patience. But sometimes the market creates opportunities that have the potential to reward investors who are ready to ride the bandwagon of time. Artificial intelligence is the ultimate money-making bandwagon of 2023 and perhaps several years to come. While many believe AI is quickly becoming a hype and pushing stocks’ valuation to dangerous levels, there are credible analysts who still believe tech stocks have a long way to go in this AI revolution.
Wedbush’s Dan Ives recently said that the AI “gold rush” would be driving tech stocks higher in the second half of 2023.
“The 2nd, 3rd, and 4th derivatives of this A.I. Gold Rush are just starting to evolve for the tech landscape. As we have covered the tech sector for decades and saw the dot.com bubble and burst firsthand, [we believe] this is the start of a 4th Industrial Revolution playing out across tech over the coming years that is still being underestimated by the Street in our opinion,” Ives said during an interview with CNBC.
Not all bubbles are bad. Some bubbles have the potential to make investors rich and give them evergreen gains and long-term opportunities. SkyBridge Capital Founder Anthony Scaramucci, while talking to BNN Bloomberg, said that while AI is “probably in a bubble,” there are still some AI stocks that should be in investors’ portfolio. Anthony Scaramucci specifically talked about Nvidia, a stock many analysts believe has become overvalued amid its latest AI-driven performance. Scaramucci said that Nvidia may be overvalued currently “but if you own it for the next 15 years, you’ll probably be OK.”
One of the biggest reasons why AI stocks have the potential to gain further is the explosive potential and applications of generative AI. According to Bloomberg Intelligence, the generative AI market could expand by about 40%, to $1.3 trillion by 2032.
Billionaire investor George Soros’ thoughts on bubbles are interesting and have become highly relevant in the current backdrop. Soros in 2009 famously said:
"When I see a bubble forming, I rush to buy, adding fuel to the fire."
In a detailed lecture in 2009, Soros explained his bubble theory. Soros thinks that a boom-bust cycle is set in motion when a trend and a misconception positively reinforce each other. Positive reinforcements keep inflating the bubble through positive feedbacks. This bubble is tested by market dynamics from time to time but if the trend is strong enough, it survives this test, according to Soros. This cycle enters what Soros calls the “twilight” stage when the trend begins to lose stream but nonetheless maintains inertia before eventually beginning to decline.
At what stage the current AI boom is? No one can say for sure but an overwhelming majority of market analysts believe the AI revolution is just getting started. To make money from this revolution, analysts recommend some stocks that are expected to ride the AI wave.
Our Methodology
In this article, we picked stocks that are expected to keep gaining value based on the AI hype and AI-related growth catalysts in 2023 and beyond, according to analysts.
Disclaimer: The stocks discussed in the article were selected using a consensus opinion-based approach, using credible analyst reports, websites and price estimates. However, there is no guarantee that these stocks will appreciate in value in future. The purpose of this article is news and education based on research.
Number of Hedge Fund Holders: N/A
Japanese investment giant SoftBank Group Corp. (OTC:SFTBY) has not been much impressive over the past few years. Its Vision Fund has posted huge losses and its China investments have been painfully unprofitable. But SoftBank Group Corp. (OTC:SFTBY)’s chief Masayoshi Son recently announced the company is ready to shift to “offense mode” and benefit from the AI revolution.
“What I am interested in most, what I am working on most, is the AI revolution. I believe that mankind is going to be exceeded by computer or AI. We would like to be [in] the leading position for the AI revolution,” Son reportedly said.
SoftBank Group Corp. (OTC:SFTBY) is preparing to publicly list British semiconductor company ARM later this year. Analysts believe the move could give Softbank a huge AI-related boost.
Jefferies analyst Atul Goyal upgraded SoftBank Group Corp. (OTC:SFTBY) shares to Buy and said:
"We expressed a view that SBG stock will rally ahead of the ARM IPO later in the year... But given (the) market's fascination for semi-stocks, we think it makes sense to move early.”
Number of Hedge Fund Holders: 31
Palantir Technologies Inc. (NYSE:PLTR) is going ballistic over AI and made headlines earlier this year by launching AIP, its AI platform for defense and military. Palantir Technologies Inc. (NYSE:PLTR) could become the go-to solutions provider for all things AI for defense and military applications. Palantir Technologies Inc. (NYSE:PLTR) has gained about 140% year to date through July 7.
Dan Ives counted Palantir Technologies Inc. (NYSE:PLTR) among the top companies he believes could gain from the AI market which he thinks could reach $800 billion over the next 10 years.
As of the end of the first quarter of 2023, 31 hedge funds tracked by Insider Monkey had stakes in Palantir Technologies Inc. (NYSE:PLTR).
Number of Hedge Fund Holders: 72
Some analysts believe Texas-based CrowdStrike Holdings, Inc. (NASDAQ:CRWD) could make investors rich in 2023 and beyond as the software company’s products are seeing huge demand. Recently, BTIG Research added CrowdStrike Holdings, Inc. (NASDAQ:CRWD) in its list of top picks for the rest of 2023. BTIG is bullish on CrowdStrike Holdings, Inc. (NASDAQ:CRWD) amid its dominance in the endpoint security/EDR market, high win rates against rivals like Microsoft, strong customer recognition, and successful performance in emerging product categories.
Morgan Stanley analysts recently said that AI has created a new opportunity in the cybersecurity domain. They believe AI-led automation in the industry could create $30 billion in productivity gains and much of those could go to a few companies including CrowdStrike Holdings, Inc. (NASDAQ:CRWD), Palo Alto Networks Inc. (NYSE:PANW) and Microsoft Corporation (NASDAQ:MSFT).
Artisan Developing World Fund made the following comment about CrowdStrike Holdings, Inc. (NASDAQ:CRWD) in its Q1 2023 investor letter:
“Top contributors to performance for the quarter included graphics semiconductor company Nvidia, Southeast Asian e-commerce platform Sea, Latin American marketplace MercadoLibre, online travel marketplace Airbnb, and endpoint security company CrowdStrike Holdings, Inc. (NASDAQ:CRWD). CrowdStrike rebounded as its financial results eased demand-related concerns in its core endpoint business, while adoption in platform adjacencies continued to rise.”
Number of Hedge Fund Holders: 82
Being a leader and first mover in the lucrative EV industry gives Tesla Inc. (NASDAQ:TSLA) an advantage that it keeps enjoying, thanks to Elon Musk’s relentless innovation and proactive approach. Tesla Inc. (NASDAQ:TSLA) has already gained about 155% year to date through July 7. Tesla Inc. (NASDAQ:TSLA) is gaining after the company posted Q2 delivery numbers. Tesla Inc. (NASDAQ:TSLA) delivered 466,140 electric vehicles in the second quarter of 2023, surpassing estimates of 445,000 units. This was an 83% year-over-year growth.
Wedbush Securities analyst Dan Ives said Tesla Inc. (NASDAQ:TSLA)’s price cuts earlier this year gave the company an advantage as demand of EVs remain strong.
Ives thinks Tesla Inc. (NASDAQ:TSLA) is on track to hit 1.8 million unit delivery milestone for 2023.
"With this delivery beat, we believe the sum-of-the-parts story for Tesla is another step towards coming into play with its newly released supercharger network OEM deals, energy business, AI driven autonomous path, unmatched battery ecosystem, and increased production scale/scope globally adding to the Tesla golden EV success story,” Ives said.
Ives has a $300 price target on Tesla Inc. (NASDAQ:TSLA). Cathie Wood of ARK, which has a $1.13 billion stake in Tesla Inc. (NASDAQ:TSLA), thinks Tesla shares could reach $3000 by 2025.
Number of Hedge Fund Holders: 87
Palo Alto Networks Inc. (NYSE:PANW) is another stock that analysts believe can ride the AI bandwagon. Goldman Sachs recently released its “Rule of 10” screen picks which include companies that have showed strong sales growth over the past couple of years and are expected to continue posting solid revenue growth. Palo Alto Networks Inc. (NYSE:PANW) made it to the list.
Palo Alto Networks Inc. (NYSE:PANW) is uniquely positioned to benefit from the AI boom. The company launched its platform XSIAM that uses automation and AI for information and cybersecurity. Palo Alto Networks Inc. (NYSE:PANW)’s CEO has a special focus on AI and the company is expected to see more growth based on its AI products. He said during fiscal Q3 earnings call in May:
“I think there is no doubt we will continue to deploy our proprietary AI models for XSIAM or for our network security use case as I highlighted. We believe in our preliminary analysis over the last three months and driving a lot of these work streams internally that there is a dare there with generative AI. So we believe that we will be deploying generative AI over the course of the next few months, and we’ll talk more about it At a later event. But we think that has an opportunity both to significantly improve our customer efficiency and the efficacy of our products, at the same time, also to drive efficiencies within the way we run Palo Alto Networks. I think last but not the least, which is something you didn’t ask, but I’ll say, separately, Lee and his team have been working hard to see and look at the adverse impact that generative AI could have in terms of adversaries using Generative AI to build new malware, to try and attack our customers.”
TimesSquare U.S. Mid Cap Growth Strategy made the following comment about Palo Alto Networks, Inc. (NASDAQ:PANW) in its Q4 2022 investor letter:
“Within Information Technology, Palo Alto Networks, Inc. (NASDAQ:PANW) offers network security solutions to enterprises, services providers, and government entities. The company delivered another strong quarter with revenues, billings, and earnings all above the consensus. Management recognizes a challenging macro environment that is altering customer behavior such as increased deal scrutiny and elongating sales cycles. Their shares pulled back by -15% during the quarter.”
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Disclosure: None. 10 Stocks That Will Make You Rich in 2023 is originally published on Insider Monkey.
