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5 Top-Ranked AI Stocks to Buy Right Now for Healthy Returns
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Artificial Intelligence (AI) has garnered significant investor interest this year, owing to the generative AI revolution. Among the most prolific generative AIs, OpenAI’s ChatGPT chatbot has gained significant adoption since its release in November 2022. Per ZDNet, which cited data from UBS, ChatGPT had more than 100 million active users in January 2023.
Generative AI’s future is bright, as reflected by the solid adoption of ChatGPT among enterprises. It has already proven useful across a variety of industries, including marketing, advertising, customer service, education, content creation, healthcare, automotive, energy & utilities, and video game development.
Moreover, ChatGPT has a profound influence on the evolution of AI. ChatGPT’s success has created massive interest in developing large language models (like GPT4, on which ChatGPT is built). Advancements in natural language processing models, which help computers understand how we write and speak, are playing a huge role in the rise of generative AI.
Microsoft’s partnership with OpenAI provided a boost, as it is using ChatGPT to improve Bing’s search abilities in order to challenge Google’s search dominance. Microsoft is planning to integrate ChatGPT functionalities with its immensely popular Office products, which will pave the way for further growth.
Apart from Microsoft, tech giants Alphabet and Meta Platforms (META - Free Report) have been planning to join the generative AI bandwagon with their tools. Banking giant JPMorgan Chase is also developing a ChatGPT-like service software called IndexGPT that will select investment securities.
Generative AI Expanding With Service Launches
In March 2023, Alphabet launched Google Bard. The chatbot attracted 142.6 million visitors in May, up from 49.7 million in April, according to preliminary data from similarweb. Then again, ChatGPT attracted 1.8 billion worldwide visits in May, up 2.8% from April.
Other notable generative AI services (both text and digital-image generators) that are currently available are Claude from Anthropic, Salesforce’s Einstein GPT (leveraging Open AI models), DALL·E 2, Stability AI’s Stable Diffusion and Midjourney.
Although Google Bard and other services have plenty to catch up on, the generative AI space is surely going to be more competitive with the latest service launches. This offers significant growth opportunities for providers of cloud services, specialized data providers, chipmakers and server OEMs.
Here we present five stocks that are well-poised to benefit from an expanding generative AI market. Based on their solid fundamentals, they have more room for growth. These stocks either sports a Zacks Rank #1 (Strong Buy) or a Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Image Source: Zacks Investment Research
5 Top-Ranked AI Stocks to Buy
NVIDIA (NVDA - Free Report) : It will not be groundless to say that the chipmaker is riding on the massive growth prospect of AI. Generative AI requires vast knowledge to create content and it needs huge computational power, which NVIDIA’s GPUs provide.
GPUs of this Zacks Rank #1 stock is being applied in AI models, which is expanding its footprint in untapped markets like automotive, healthcare and manufacturing. An expanding partner base that includes IBM, Microsoft, SAP, Amazon, Baidu and Meta Platforms is expanding NVIDIA’s enterprise user base.
NVDA shares have returned 165.3% year to date. The Zacks Consensus Estimate for fiscal 2024 earnings is pegged at $7.64 per share, up 70.2% over the past 30 days and indicates year-over-year growth of 128.74%.
Meta Platforms: This social networking giant is a major contender for generative AI dominance, given the huge amount of user data it has access to. This Zacks Rank #1 company is reportedly working on several AI tools, including a ChatGPT-like chatbot that will be eventually incorporated into Messenger and WhatsApp.
Meta Platforms ’s generative AI tools, once available, are expected to change the face of the advertising market. It is seemingly testing AI-powered ad tools with a small set of advertisers and plans to grant access to more advertisers in July.
Meta Platforms' shares have gained 120.2% year to date. The consensus mark for 2023 earnings stands at $11.93 per share, up 14.3% over the past 60 days, suggesting 21.36% year-over-year growth.
ServiceNow (NOW - Free Report) : The company’s shares have returned 37.5% year to date. This Zacks Rank #1 company has launched generative AI capabilities — ServiceNow Generative AI Controller and Now Assist for Search — for the Now platform that helps deliver faster and more intelligent workflow automation.
Strategic acquisitions related to generative AI with the likes of Microsoft Azure and NVIDIA bode well for ServiceNow.
The consensus mark for 2023 earnings stands at $9.59 per share, up 4.8% over the past 60 days, suggesting 26.35% year-over-year growth.
MongoDB (MDB - Free Report) : Shares of this Zacks Rank #2 company has soared 90.3% year to date. MongoDB’s primary offering is a database-as-a-service, Atlas, which accounted for 65% of revenues in first-quarter fiscal 2024.
MongoDB’s expects generative AI will improve the software development process, making it more efficient, scalable and automated. As the number of applications developed increases, the need for an operational database will rise, thereby benefiting MDB. The company is incorporating AI-related functionality into its database, which will further drive growth.
The Zacks Consensus Estimate for MDB’s fiscal 2024 earnings is pegged at $1.45 per share, up 40.8% over the past 60 days. This indicates year-over-year growth of 79.01%.
Adobe (ADBE - Free Report) : This digital media solutions provider has aggressively expanded its footprint in the generative ai space through partnerships and new solutions. This is another Zacks Rank #2 stock.
Through its partnership with NVIDIA, Adobe is developing a generation of advanced generative AI models, with a focus on deep integration into applications. Adobe and Google also partnered to bring Firefly to Bard. Adobe Firefly is the most differentiated generative AI service that generates commercially viable, professional quality content.
Adobe has expanded its offerings powered by Adobe Sensei GenAI. It has unveiled Generative Fill in Photoshop, bringing Adobe Firefly generative AI capabilities directly into design workflows.
The Zacks Consensus Estimate for ADBE’s fiscal 2023 earnings is pegged at $15.43 per share, up by a penny over the past 60 days. This indicates year-over-year growth of 12.55%.
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5 Top-Ranked AI Stocks to Buy Right Now for Healthy Returns
Artificial Intelligence (AI) has garnered significant investor interest this year, owing to the generative AI revolution. Among the most prolific generative AIs, OpenAI’s ChatGPT chatbot has gained significant adoption since its release in November 2022. Per ZDNet, which cited data from UBS, ChatGPT had more than 100 million active users in January 2023.
Generative AI’s future is bright, as reflected by the solid adoption of ChatGPT among enterprises. It has already proven useful across a variety of industries, including marketing, advertising, customer service, education, content creation, healthcare, automotive, energy & utilities, and video game development.
Moreover, ChatGPT has a profound influence on the evolution of AI. ChatGPT’s success has created massive interest in developing large language models (like GPT4, on which ChatGPT is built). Advancements in natural language processing models, which help computers understand how we write and speak, are playing a huge role in the rise of generative AI.
Microsoft’s partnership with OpenAI provided a boost, as it is using ChatGPT to improve Bing’s search abilities in order to challenge Google’s search dominance. Microsoft is planning to integrate ChatGPT functionalities with its immensely popular Office products, which will pave the way for further growth.
Apart from Microsoft, tech giants Alphabet and Meta Platforms (META - Free Report) have been planning to join the generative AI bandwagon with their tools. Banking giant JPMorgan Chase is also developing a ChatGPT-like service software called IndexGPT that will select investment securities.
Generative AI Expanding With Service Launches
In March 2023, Alphabet launched Google Bard. The chatbot attracted 142.6 million visitors in May, up from 49.7 million in April, according to preliminary data from similarweb. Then again, ChatGPT attracted 1.8 billion worldwide visits in May, up 2.8% from April.
Other notable generative AI services (both text and digital-image generators) that are currently available are Claude from Anthropic, Salesforce’s Einstein GPT (leveraging Open AI models), DALL·E 2, Stability AI’s Stable Diffusion and Midjourney.
Although Google Bard and other services have plenty to catch up on, the generative AI space is surely going to be more competitive with the latest service launches. This offers significant growth opportunities for providers of cloud services, specialized data providers, chipmakers and server OEMs.
Here we present five stocks that are well-poised to benefit from an expanding generative AI market. Based on their solid fundamentals, they have more room for growth. These stocks either sports a Zacks Rank #1 (Strong Buy) or a Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Image Source: Zacks Investment Research
5 Top-Ranked AI Stocks to Buy
NVIDIA (NVDA - Free Report) : It will not be groundless to say that the chipmaker is riding on the massive growth prospect of AI. Generative AI requires vast knowledge to create content and it needs huge computational power, which NVIDIA’s GPUs provide.
GPUs of this Zacks Rank #1 stock is being applied in AI models, which is expanding its footprint in untapped markets like automotive, healthcare and manufacturing. An expanding partner base that includes IBM, Microsoft, SAP, Amazon, Baidu and Meta Platforms is expanding NVIDIA’s enterprise user base.
NVDA shares have returned 165.3% year to date. The Zacks Consensus Estimate for fiscal 2024 earnings is pegged at $7.64 per share, up 70.2% over the past 30 days and indicates year-over-year growth of 128.74%.
Meta Platforms: This social networking giant is a major contender for generative AI dominance, given the huge amount of user data it has access to. This Zacks Rank #1 company is reportedly working on several AI tools, including a ChatGPT-like chatbot that will be eventually incorporated into Messenger and WhatsApp.
Meta Platforms ’s generative AI tools, once available, are expected to change the face of the advertising market. It is seemingly testing AI-powered ad tools with a small set of advertisers and plans to grant access to more advertisers in July.
Meta Platforms' shares have gained 120.2% year to date. The consensus mark for 2023 earnings stands at $11.93 per share, up 14.3% over the past 60 days, suggesting 21.36% year-over-year growth.
ServiceNow (NOW - Free Report) : The company’s shares have returned 37.5% year to date. This Zacks Rank #1 company has launched generative AI capabilities — ServiceNow Generative AI Controller and Now Assist for Search — for the Now platform that helps deliver faster and more intelligent workflow automation.
Strategic acquisitions related to generative AI with the likes of Microsoft Azure and NVIDIA bode well for ServiceNow.
The consensus mark for 2023 earnings stands at $9.59 per share, up 4.8% over the past 60 days, suggesting 26.35% year-over-year growth.
MongoDB (MDB - Free Report) : Shares of this Zacks Rank #2 company has soared 90.3% year to date. MongoDB’s primary offering is a database-as-a-service, Atlas, which accounted for 65% of revenues in first-quarter fiscal 2024.
MongoDB’s expects generative AI will improve the software development process, making it more efficient, scalable and automated. As the number of applications developed increases, the need for an operational database will rise, thereby benefiting MDB. The company is incorporating AI-related functionality into its database, which will further drive growth.
The Zacks Consensus Estimate for MDB’s fiscal 2024 earnings is pegged at $1.45 per share, up 40.8% over the past 60 days. This indicates year-over-year growth of 79.01%.
Adobe (ADBE - Free Report) : This digital media solutions provider has aggressively expanded its footprint in the generative ai space through partnerships and new solutions. This is another Zacks Rank #2 stock.
Through its partnership with NVIDIA, Adobe is developing a generation of advanced generative AI models, with a focus on deep integration into applications. Adobe and Google also partnered to bring Firefly to Bard. Adobe Firefly is the most differentiated generative AI service that generates commercially viable, professional quality content.
Adobe has expanded its offerings powered by Adobe Sensei GenAI. It has unveiled Generative Fill in Photoshop, bringing Adobe Firefly generative AI capabilities directly into design workflows.
The Zacks Consensus Estimate for ADBE’s fiscal 2023 earnings is pegged at $15.43 per share, up by a penny over the past 60 days. This indicates year-over-year growth of 12.55%.