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SentinelOne, Inc. (S) Expands AWS Partnership to Enhance AI-Powered Cybersecurity, Earns ‘Buy’ Rating from Needham
We recently compiled a list of the 15 AI News Investors Should Not Miss.In this article, we are going to take a look at where SentinelOne, Inc. (NYSE:S) stands against the other AI stocks investors should not miss.
Artificial Intelligence developments are making headlines across various sectors. From high-profile legal battles to groundbreaking advancements in model performance and safety protocols, AI is reshaping the landscape across industries at an unprecedented pace.
Before we move on to the breaking news on AI, let’s talk about Morningstar’s recent report. The investment research firm reveals that for the third consecutive year, investors are leaving exchange-traded funds related to specific themes for funds linked to broad stock-market benchmarks "that are hitting record highs". Despite overall growth in equity ETFs, thematic ETFs have lost $5.8 billion in investor capital in the year 2024. This is greater than $4.8 billion outflows in all of 2023. The reason? Broad market index returns are setting a higher bar for thematic funds this year.
"It's not that people don't like the idea of themes any longer, but that a bull market dominated by a handful of megacaps makes it hard for any theme to stand out”.
As per Morningstar, thematic ETFs often struggle due to mistimed investments, with investors usually missing out on two-thirds of their returns. Despite some AI-themed funds having strong holdings, higher fees and timing challenges reduce their overall appeal.
"I think that when S&P 500 megacaps stop delivering the way they do today, the focus will shift back to thematic ETFs”.
Moreover, while AI remains a key focus in many thematic ETFs, its impact goes far beyond investing. Consider Penguin Random House, the first of the Big Five anglophone trade publishers to amend its copyright information. The publisher has recently added a language to its copyright pages to prohibit the use of those books to train AI. Publishers and AI firms will be increasingly clashing in the future if clear guidelines and processes aren’t kept in place. In a similar endeavor, The New York Times has sent Perplexity AI, an AI-powered research firm, a "cease and desist" notice demanding that it stop using the newspaper's content for generative AI purposes. The news publisher claims that the way the AI Company uses its material violates copyright law.
In other news, Anthropic, a U.S.-based artificial intelligence public-benefit startup, is now adding a comprehensive update to its safety policy, reinforcing the guardrails of its AI as it becomes more capable. This push to improve AI safety is in stark contrast to competitors such as OpenAI, whose increasing focus on improving capabilities and performance is very likely to threaten safety guidelines in the future. As per McKinsey, 63% of companies consider inaccuracy risk to be relevant. However, only 38% of companies are working to mitigate the risk.
While artificial intelligence may be intimidating, it is equally, if not more, beneficial for mankind. In its latest achievement, AI has helped UCLA researchers develop a deep-learning framework that teaches itself to automatically analyze and diagnose MRIs and other 3D medical images. That too, with the accuracy matching that of medical specialists in a fraction of the time. Another breakthrough from Archetype AI, a physical AI company, is set to significantly change how we understand and interact with the physical world. The model, named Newton, shows the unparalleled capacity to generalize across diverse physical phenomena using only raw sensor measurements as input.
Finally, in our roundup of the latest AI news, the US rules that will ban certain US investments in artificial intelligence in China are under final review, as per a government posting. The rules, requiring US investors to notify the Treasury Department regarding some investments in AI and other stem technologies, come from an executive order signed by President Joe Biden in August 2023. The order aims to keep American investors' know-how from aiding China's military. Chipmakers and related companies that may be impacted by the decisions denied responding to Reuters' requests for comment.
Methodology
For this article, we selected AI stocks by combing through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds.
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).
Okta, Inc. (NASDAQ:OKTA) Expands AI Features in Cybersecurity Solutions; CEO Reflects on the Future of Digital Identity Management
An engineer typing on a computer, developing the latest cybersecurity application.
SentinelOne, Inc. (NYSE:S) is a leading American cybersecurity AI platform that provides top-tier AI-powered security solutions to its clients. The company’s most sophisticated AI-driven platform, Purple AI, has exceeded expectations and played a significant role in the company's strong Q2 performance, just months after its official launch.
On October 17, SentinelOne, Inc. (NYSE:S) announced the extension of its strategic collaboration agreement (SCA) with Amazon Web Services (AWS). The partnership, aimed at delivering generative AI benefits, will use SentinelOne’s Purple AI powered by Amazon Bedrock, to provide AI-powered security and protection for customers. The expanded strategic collaboration agreement (SCA) will also increase investments in SentinelOne’s AI-powered Singularity™ Platform within AWS Marketplace. This will empower enterprises to access end-to-end protection from a unified, AI-powered platform quickly and with ease.
“By taking advantage of AWS AI infrastructure and Amazon Bedrock to train, tune, and serve our own models, we can give AWS customers access to today’s best generative AI security analyst – and future Purple AI innovation – delivered entirely inside AWS”.
On October 17, Needham, an independent investment bank and asset management firm, resumed a “Buy” rating on the company’s stock, with a price target of $32. The coverage resumption followed after it attended the company’s first-ever analyst event in Las Vegas. The company’s expanding platform, enhanced go-to-market, and improving execution had made them confident in SentinelOne, Needham's analyst told investors in a research note. Moreover, its partnership with Lenovo last month is also considered “transformational”, driving a “compelling upside” to new annual recurring revenue estimates over the coming years.
Overall S ranks 11th on our list of the AI stocks investors shouldn't miss. While we acknowledge the potential of S as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than S but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
