You Already Know the Names of the Biggest AI Stocks. These 3 Have Superior Growth Potential.
Artificial intelligence (AI) is one of the fastest-growing markets in the world, with global revenues zooming from $3.22 billion in 2016 to an estimated $11.28 billion this year. AI sales are expected to more than double again by 2021, and rise to nearly $90 billion by 2025. Given that growth, it makes sense to invest in artificial intelligence stocks.
But you can’t just invest in the usual suspects. Those include the likes of Alphabet (GOOG), Microsoft (MSFT), IBM (IBM), Salesforce.com (CRM) and Nvidia (NVDA). Don’t get me wrong—those are all fine companies and some are solid investments (to varying degrees). But they’re not artificial intelligence stocks, per se; in other words, they’re large and diversified enough companies that AI is just one segment—albeit a fast-growing one—of what they do.
The purer artificial intelligence plays are less diversified, and highly levered to the AI boom. As the artificial intelligence industry has exploded in the last couple years, the following three stocks have all more than doubled the market. And all three have had a good year in 2019.
We’ve identified a stock that’s pretty darn near perfect and one of the easiest doubles we’ve seen this year. However, 9 out of 10 investors have never heard of it and will miss out on this locked-in opportunity. Find out the full story and why it’s our No. 1 Stock.
We’ve identified a stock that’s pretty darn near perfect and one of the easiest doubles we’ve seen this year.
However, 9 out of 10 investors have never heard of it and will miss out on this locked-in opportunity.
Find out the full story and why it’s our No. 1 Stock.For details, click here.
As the global AI boom gains steam in the coming years, these artificial intelligence stocks (or AI stocks, for short) should continue to outperform.
3 Artificial Intelligence Stocks to Buy
Artificial Intelligence Stock #1: Splunk (SPLK)
Splunk specializes in something called “machine learning”—a form of artificial intelligence. Specifically, Splunk provides artificial intelligence for information technology (IT) operations, enabling organizations to reduce costs by automating normal IT functions (without having to hire an entire IT department).
Splunk’s sales have risen double-digits every year this decade, and are expected to increase another 30% in the current (2020) fiscal year. Meanwhile, the company has turned profitable, with EPS expected to grow this year and next.
As for the stock, SPLK is up 42% this year after gapping to new highs in late November. The consolidation since bodes well for perhaps another leg up in the New Year.
Artificial Intelligence Stock #2: Tencent Holdings (TCEHY)
Chinese stocks have been out of favor for more than a year, dragged down by the trade war. But Tencent Holdings stock has held up well.
China’s biggest social media company—inventors of the WeChat app—Tencent recently built an artificial intelligence lab in Seattle, with the intent of expanding its voice-to-text and virtual assistant offerings. TCEHY stock (an over-the-counter Chinese ADR) had a brutal nosedive in May (falling from 50 to 40), and got knocked back again in August, but has been trending well over the last six weeks, inching up from 40 to 43, and is back trading above its 50-day moving average.
Artificial Intelligence Stock #3: Twilio (TWLO)
Here’s what Mike Cintolo, our resident growth investing expert, wrote about Twilio a few months back:
“Fundamentally, we’ve mentioned before that we like the pervasiveness of the firm’s communications platform, which works for voice, messaging and now email; just about any size organization is a potential customer. But that doesn’t mean big enterprises aren’t beating a path to the firm’s door—one Fortune 100 retailer said that it sees a future where Twilio is the foundation of their customer engagement platform across all channels, and we’re sure others are thinking the same. Analysts see revenues up 71% this year, and even that figure could prove conservative if management makes the right moves.”
As for TWLO stock, it came out of the gates red-hot this year, but has since been knocked back to Earth. After bottoming at 91 a month ago, it’s showing some encouraging signs, topping out at 104 and currently trading in the 97-98 range. All told, it’s up only 9% this year, but a whopping 294% in the last two years. Here’s betting the recent comedown is more a natural correction than a change in character for TWLO stock.
In the meantime, it’s worth considering adding these three top AI stocks to your portfolio, especially now that all three are in an uptrend. Bigger picture, the AI trend has been a boon for these stocks the last couple years, and could be even better in the coming years as the global AI marketplace becomes increasingly mainstream.
Investment analyst and Chief Analyst of Cabot Wealth Daily, Chris Preston brings you all the latest from the investing world. Sign up to get updates and breaking news delivered FREE to your inbox. Get unlimited access to our library of complimentary investing reports.Sign up now!
Note: This post has been updated from an original version.