Artificial intelligence (AI) stocks are likely to soar in the years and decades ahead. However, some AI stocks will gradually increase in value over time, while others will pop in the near future.
If you don't have your finger on the pulse of the AI industry, you are not alone. This is an inherently complex and highly competitive space. Fret not, I have identified the top AI stocks for the upcoming year.
FB, a company known for its uber-popular social media platform, is also involved in machine intelligence. Jerome Pesenti has led FB's machine intelligence group for two years. Pesenti is the man behind IBM's Watson division. The automation of algorithms that teach themselves enhances FB's news feeds and keeps customers in the fold. These users are shown ads that make the company bundles of money. FB's early entry into machine learning techniques should add to its three billion monthly active users across Facebook, WhatsApp, and Instagram.
FB has "A" grades in the Industry Rank, Peer Grade, and Trade Grade POWR Ratings components. The stock is ranked 5th out of 58 stocks in the Internet industry. The average analyst price target for FB is $322.73, meaning the stock could pop another 20%. Out of the 35 analysts who cover the stock, 33 rate it as a "Buy," two consider it a "Hold," and none have it as a "Sell."
FB has an attractive forward P/E ratio of 29.43, a figure that will likely climb even higher as this tech stock fulfills its potential.
NVIDIA Corporation (NVDA)
NVDA's semiconductors and related technology play key roles in numerous tech spaces. The company's graphics processing unit or GPU for short helps power self-driving vehicles, cloud computing, and top-selling video games. Sony (SNE) selected NVDA to build an autonomous vehicle prototype. Add in the fact that NVDA's data center segment rakes in a billion dollars of revenue every quarter, and there is all the more reason to consider this stock.
AI should push NVDA's growth rate even higher in the months and years ahead. The POWR Ratings reveal NVDA has "B" grades in Buy & Hold Grade, Trade Grade, and Industry Rank. NVDA is ranked 15th of 86 stocks in the Semiconductor & Wireless Chip industry. The average analyst target price indicates a potential 12% upside. Of the 31 who cover the stock, 26 have it is a "Buy," four rate it as a "Hold," and one has it as a "Sell."
TWLO creates application programming interfaces or API for short, that is based on the cloud. TWLO's cloud software business is worth nearly $30 billion alone. In short, TWLO makes it easy for companies to build messaging, video, and voice features into apps. Though TWLO is fairly volatile, it is worth the risk as the company is one of the leading AI businesses globally. If TWLO profits compound nearly 50% across the next half-decade as analysts expect, the stock should soar even higher.
Check out the POWR Ratings components, and you will find TWLO has an "A" grade in Peer Grade and a "B" in Trade Grade. The stock is ranked first out of 11 in the Software - SAAS industry.
The analysts are bullish on TWLO, setting an average price target of $355, which could mean more than 30% upside potential.
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FB shares were trading at $276.53 per share on Wednesday morning, up $4.10 (+1.50%). Year-to-date, FB has gained 34.73%, versus a 12.20% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management.3 Artificial Intelligence Stocks Ready to Soar in 2021 appeared first on StockNews.com