We recently compiled a list of the 20 Trending AI Stocks on Latest News and Ratings. In this article, we are going to take a look at where SentinelOne, Inc. (NYSE:S) stands against the other trending AI stocks.

S&P 500 to Reach 6,000 by Year-End Amid AI Boom and Earnings Growth

Joining CNBC’s Squawk Box to discuss the latest market trends, Mary Ann Bartels of Sanctuary Wealth remains bullish on 2024, expecting the S&P 500 to hit 6,000 by year-end. As the Fed recalibrates to an easier monetary policy and corporate profits continue to grow, the chief investment strategist believes the market will maintain its rally as we approach November and December.

As of today, the S&P is around 3% shy of hitting 6,000. This is only eight months after it eclipsed 5,000 for the first time. Monday, October 14 proved to be a new record for the S&P, marking the bull market's second anniversary. The milestone represents an impressive recovery over the last two years when stock prices surged despite ongoing recession concerns and elevated interest rates.

S&P 500 reaching all-time highs comes amidst optimism on Wall Street as the third-quarter earnings season kicks in. With corporate earnings proving resilient amidst high rates and moderating inflation, and investors piling into stocks poised to benefit the most from the generative AI craze- the market sentiment remains bullish as traders anticipate strong financial results and continued growth in technology-driven sectors.

Artificial Intelligence-linked stocks have been leading the S&P 500 and Nasdaq Composite higher. On October 14, the S&P 500 and Dow Jones Industrial Average both reached all-time highs, closing up 0.8% and 0.5%, respectively. Meanwhile, the Nasdaq Composite gained 1% and approached a record of its own. Despite these recent gains, high valuations will seemingly pose a challenge for continued growth, with analysts noting that this could be a sign that the bull market may be nearing its end.

Read more about these developments by accessing 10 Unsexy AI Stocks According to Goldman Sachs and 10 Buzzing AI Stocks According to Goldman Sachs.

Strategists also caution that moving forward, continued gains will depend on identifying sectors with strong earnings growth. As Artificial Intelligence is poised to significantly influence future market performance, the focus will shift to AI's impact on profitability across various industries. According to Citi equity strategist Scott Chronert, for AI to continue driving market gains, “you’ve got to have more companies delivering on the AI promise via margins and profitability metrics.”

At the same time, it is also true that ongoing conflicts in the Middle East, upcoming US presidential elections, and natural disasters may pose risks to the market’s climb. Nevertheless, ongoing AI innovation and a resilient economy are still in support of further gains. In light of this, Solita Marcelli, Chief Investment Officer for Americas at UBS Global Wealth Management, further notes how third-quarter results could act as a catalyst for market gains as investors focus on tech fundamentals and AI.

"We continue to expect increased volatility for technology stocks in the near term,” the note states. “However, we remain positive on the tech sector as well as the outlook for artificial intelligence (AI). Against this backdrop, we believe volatility should be utilized to build long-term AI exposure."

According to the bank, October has historically been a turbulent month for tech stocks, citing how monthly realized volatility for the Nasdaq 100 over the past 40 years has been 26% in October, while other months have an average of 22%. Regardless, strong AI fundamentals and the upcoming earnings season will reaffirm positive growth trajectories.

It is further stated that the overall AI semiconductor industry is expected to grow sharply, reaching $168 billion by the end of the year. Tech and AI companies are also anticipated to “beat and raise” expectations for the September quarter. Furthermore, the ongoing transition to smaller, more powerful AI chips will drive significant performance improvements, fueling further investment in the sector.

Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.

Our 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).

A close-up view of programmer hands typing on a keyboard for a 3D security platform.

SentinelOne, Inc. (NYSE:S)

Number of Hedge Fund Holders: 37

Based in Mountain View, Canada, SentinelOne, Inc. (NYSE:S) is an advanced American cybersecurity AI platform offering the best-in-class AI-powered security to its customers. Its most advanced AI-assisted platform, Purple AI, has surpassed company expectations and contributed to Q2 outperformance, only months after its general availability.

Purple AI’s generative AI capabilities, a major competitive advantage to the company, have been helping customers garner real gains with 80% faster threat hunting and investigations. In essence, SentinelOne, Inc. (NYSE:S)’s Purple AI leverages the power of artificial intelligence- translating natural language questions into sophisticated queries that help enable deep analysis of logs and data from native and third-party sources, further accelerating the entire threat detection and response process.

On October 14, Piper Sandler upgraded the rating of the stock from “Neutral” to “Overweight”. The firm has also upgraded the price target for the company, raising it from $25 to $32 amidst a positive shift in sentiment toward the stock. Piper Sandler believes that SentinelOne, Inc. (NYSE:S) is poised for incremental share gains against Crowdstrike Holdings Inc. (NASDAQ:CRWD), especially after their disastrous software update that was seemingly caused by a human error. Naturally, Sentinel One’s AI-automated services and the enhanced narrative around automation are poised to help gain market share and drive revenue for the company. Despite the optimistic outlook, analysts also point out risks, such as macroeconomic challenges, competitive pressures, data breach risks, and potential cash flow issues.

Overall S ranks 19th on our list of the trending AI stocks on latest news and ratings. 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.

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Disclosure: None. This article is originally published at Insider Monkey.