In this article, we will be taking a look at the 11 fastest growing AI stocks to invest in now. To skip our detailed analysis of the artificial intelligence sector, you can go directly to see the 5 Fastest Growing AI Stocks To Invest In Now.
Tech: A High-Growth Sector
If you're looking for high growth stocks to invest in, the tech sector is one of the best places to start. Specifically, artificial intelligence (AI) stocks can be exceptional additions to any growth portfolios as this revolutionary technology continues to expand and grow to bigger heights than ever seen before. However, the fact that AI is an exciting place to invest in right now does not automatically mean that every AI stock in the market is a good growth pick for investors. Resultantly, it's important to ensure that investors carefully pick out the AI stocks that can actually deliver on their promises of growth instead of the ones that can't.
On March 15, Eric Lynch, the Portfolio Manager at Scharf Investments, joined CNBC's "Squawk Box" to discuss this dilemma in the AI space where investors may not know which businesses can actually grow their earnings. Here's what he had to say:
"We're at a kind of 'where's the beef?' moment for AI, where all the promises need to be delivered this year. If you look at investors' reactions to several AI stories in the past week, you know Broadcom, Marvell Technology, Oracle, and most recently with Adobe yesterday, what you're seeing is a reaction to slower growth than expected."
Winners in Artificial Intelligence in 2024
According to Lynch, many AI companies today are lagging behind on their promises and cannot perform on par with the expectations leveled at them. As a result, it is becoming ever more important to separate the winners from the losers in this space. Lynch noted the following on which companies he sees as winners in AI:
"Obviously the chipmakers and the hyperscalers, we've seen that in the stock prices, NVIDIA, Microsoft, AWS, and most recently, Oracle. Oracle is really guiding for 50% infrastructure cloud growth going forward, because its use case was really generative AI, that it needed for its superior tech stack. So, these names are really benefitting."
These "winning" AI stocks, such as NVIDIA Corporation (NASDAQ:NVDA), Microsoft Corporation (NASDAQ:MSFT), and Apple Inc. (NASDAQ:AAPL), are also among the top high growth stocks in the tech and AI sector today and have exciting developments brewing in 2024. For instance, NVIDIA Corporation (NASDAQ:NVDA) has its GTC Conference coming soon this March, where CEO Jensen Huang will deliver a keynote on what to expect from the company this year. Stifel's equity research analyst, Ruben Roy, joined CNBC's "Closing Bell" on March 15 to discuss what to expect from the keynote. Here's what he said:
"I think there's gonna be a lot of discussion on the product roadmap - NVIDIA has increased the cadence at which they bring new products to the market, I think that's really interesting. I think there's gonna be a discussion around the ecosystem that's building around their AI offerings, so it's not just about hardware, right, we're not considering NVIDIA just a chip company anymore. It's a systems company, a software company, it's a networking company. And so I think there's gonna be a lot of discussion, again, around this concept of an AI ecosystem that NVIDIA has been busy building."
Investors interested in artificial intelligence stocks should thus keep their eyes on the upcoming GTC conference, which is expected to bring together tech professionals for stimulating discussions on the future of AI and its impact on the world. Additionally, keeping up with the news on which AI stocks can reasonably be considered high growth stocks is also important at this point in time. As such, we have compiled a list of the fastest-growing AI stocks today, including some of the most promising AI stocks to buy and some of the most advanced AI companies to invest in.
We selected the high growth stocks for our list below by consulting the holdings of the Global X Artificial Intelligence & Technology ETF and shortlisting 11 stocks with the highest share price gains over a 5-year period as of March 16. The stocks are ranked based on their share price performance, from the lowest to the highest gain. We have also mentioned the number of hedge funds holding stakes in each stock, using Insider Monkey's hedge fund data for the fourth quarter. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by over 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
Microsoft Corporation (NASDAQ:MSFT) is a systems software company based in Redmond, Washington. It is one of the big tech stocks leading the AI race with its AI solutions and chatbot, the Microsoft Copilot.
As of March 15, DA Davidson analysts maintain a Buy rating and $500 price target on Microsoft Corporation (NASDAQ:MSFT).
There were 302 hedge funds long Microsoft Corporation (NASDAQ:MSFT) in the fourth quarter, with a total stake value of $87.3 billion.
Bill & Melinda Gates Foundation Trust was the largest shareholder in Microsoft Corporation (NASDAQ:MSFT) at the end of the fourth quarter, holding 38.2 million shares in the company.
“Microsoft Corporation (NASDAQ:MSFT) performed well after reporting strong earnings supported by accelerated growth from Azure. The cloud business is seeing consistent trends from optimization while AI has contributed strongly to its growth.”
Berkshire Hathaway was the most prominent shareholder in Apple Inc. (NASDAQ:AAPL) at the end of the fourth quarter, holding 905.6 million shares in the company.
Apple Inc. (NASDAQ:AAPL) is another big tech company on our list of high growth stocks. The company is based in Cupertino, California, and uses AI and machine learning in its technological research. The company has also recently acquired a Canadian AI startup, DarwinAI, to add to its arsenal.
A Buy rating and $225 price target were maintained on Apple Inc. (NASDAQ:AAPL) on March 12 by Bank of America Securities analysts.
Apple Inc. (NASDAQ:AAPL) was seen in the portfolios of 131 hedge funds in the fourth quarter, with a total stake value of $205.9 billion.
We saw 41 hedge funds long The Trade Desk, Inc. (NASDAQ:TTD) in the fourth quarter, with a total stake value of $1.3 billion.
The Trade Desk, Inc. (NASDAQ:TTD) is a digital advertising company based in Ventura, California. It relies on AI and machine learning for real-time analytics that help in the prediction and optimization of advertisement campaigns.
On February 22, Needham analysts maintained a Buy rating and a $100 price target on The Trade Desk, Inc. (NASDAQ:TTD).
“We have chosen to source a significant number of ideas among companies earlier in their business lifecycle by focusing on four secular growth themes: data and analytics, onshoring/reshoring, information security and e-commerce. In addition to Microsoft, three of the four other new positions we initiated during the quarter fit within these focus areas: The Trade Desk, Inc. (NASDAQ:TTD), Monolithic Power Systems and Model N.
Like NVIDIA Corporation (NASDAQ:NVDA), Microsoft Corporation (NASDAQ:MSFT), and Apple Inc. (NASDAQ:AAPL), The Trade Desk, Inc. (NASDAQ:TTD) is among the top high growth stocks in the AI sector today.
Fundsmith LLP was the largest shareholder in Fortinet, Inc. (NASDAQ:FTNT) at the end of the fourth quarter, holding 7.3 million shares in the company.
Goldman Sachs' analysts maintain a Buy rating and an $85 price target on Fortinet, Inc. (NASDAQ:FTNT) as of February 8.
Fortinet, Inc. (NASDAQ:FTNT) is a systems software company on our list of high growth stocks. It offers cybersecurity operations solutions, including the FortiAI, a generative AI assistant.
In total, 42 hedge funds were long Fortinet, Inc. (NASDAQ:FTNT) in the fourth quarter, with a total stake value of $2.3 billion.
“Fortinet, Inc. (NASDAQ:FTNT): FTNT is the worldwide market share leader in network security firewalls (by units). During the quarter, shares sold off as reported billings growth missed expectations for the second consecutive quarter, resulting in a further lowering of 2023/2024 guidance. Currently, FTNT continues to face weaker demand following three consecutive years of elevated growth. This is likely a near-term downcycle and management is opportunistically buying back shares at an accelerated pace.”
Broadcom Inc. (NASDAQ:AVGO) is a semiconductor company based in Palo Alto, California. It offers AI optical solutions and AI chips that improve high-speed interconnections between AI processors in data centers and is among the top high growth stocks in the AI space.
On March 11, Citigroup analysts maintained an $1100 price target and a Buy rating on Broadcom Inc. (NASDAQ:AVGO).
Broadcom Inc. (NASDAQ:AVGO) was spotted in the 13F holdings of 91 hedge funds in the fourth quarter, with a total stake value of $8.9 billion.
Carillon Tower Advisers made the following comments about Broadcom Inc. (NASDAQ:AVGO) in its fourth-quarter 2023 investor letter:
“Broadcom Inc. (NASDAQ:AVGO) traded higher after closing on its acquisition of VMware. The company also announced earnings that were relatively in line with estimates with some benefit of better operating expenses. The stock appears to be one of the first real beneficiaries of generative artificial intelligence (AI) with meaningful revenue expected to show up in 2024.”
Cadence Design Systems, Inc. (NASDAQ:CDNS) is an application software company. It offers the Cadence Generative AI Platform, a product design solution that enables optimization, product differentiation, and workflow productivity gains for users.
A total of 72 hedge funds were long Cadence Design Systems, Inc. (NASDAQ:CDNS) in the fourth quarter, with a total stake value of $3.6 billion.
A Buy rating and a $320 price target were reiterated on Cadence Design Systems, Inc. (NASDAQ:CDNS) on March 6 by analysts at Needham.
Like NVIDIA Corporation (NASDAQ:NVDA), Microsoft Corporation (NASDAQ:MSFT), and Apple Inc. (NASDAQ:AAPL), Cadence Design Systems, Inc. (NASDAQ:CDNS) is one of the high growth stocks to buy now.
