Artificial intelligence could be the next disruptive force in business. Think about software has penetrated nearly every company in any industry. In the process, trillions in shareholder value have been created.
AI could be something similar where every company must adopt it in order to survive. We are on the cusp of an AI revolution that dramatically alters life and works as we know it.
The challenge is finding the best AI stocks for your portfolio. Check out the number of publicly-traded AI companies and you will find there is no shortage to choose from. We have identified some of the best “Buy Rated” AI stocks every investor should seriously consider adding to his or her portfolio in 2021 and moving forward.
Amazon (AMZN)
AMZN is well-known for its eCommerce yet the company is also a trailblazer in the field of AI. AMZN's AWS provides machine learning services along with cloud infrastructure for businesses of varying types and sizes. The company's AI is easily implemented into applications of varying sorts without the need for in-depth machine learning skills or knowledge.
AMZN has an "A" Industry Rank grade in the POWR Rating components along with "B" grades in the Peer Grade, Buy & Hold Grade, and Trade Grade components. AMZN is ranked in the top five of nearly 60 Internet stocks. The analysts expect AMZN will rise to $3,813.12 per share, meaning it has the potential to pop more than 25% soon.
Of 35 analysts who have studied AMZN, 34 recommend it as a Buy and only one recommends Holding. AMZN has recently sold off from its September high of $3,531, dropping to $3,048. This pullback is an excellent buying opportunity for investors to establish a position in AMZN or add to their current AMZN position ahead of the holiday period in which the company is certain to dominate once again.
Alphabet (GOOGL)
GOOGL is quickly shifting its focus from search engine dominance to AI. The company's AI solutions are disrupting all sorts of industries ranging from the auto industry to government contracts, healthcare, and beyond. GOOGL's relentless funding of AI is now paying off with its rapid expansion into the economy's top industries. GOOGL's brass is quick to point out the company's AI solutions are driving its innovations ranging from healthcare diagnostics to autonomous vehicles and even YouTube recommendations.
GOOGL has "A" grades in the Peer Grade, Industry Rank, Buy & Hold Grade, and Trade Grade POWR Rating components. GOOGLE is ranked second of 58 internet stocks. Take a look at the top analysts’ take on GOOGL and you will find they are bullish, setting an average price target of $1,928.70, indicating the stock could rise more than 17% soon. Add in the fact that GOOGL has a fairly low forward P/E ratio of 33 and you have all the more reason to invest in this high-flying tech stock.
NVIDIA Corporation (NVDA)
NVDA is quickly establishing itself as the world’s premier chipmaker. The company’s AI solutions are making it easy for businesses of all types to provide consumers with truly smart devices and machines. Take a look at NVDA's POWR Ratings and you will find the company has "B" grades in the Buy & Hold Grade, Industry Rank, and Trade Grade components.
NVDA is ranked 15th out of 86 publicly traded companies in the Semiconductor & Wireless Chip sector. The top analysts are bullish on NVDA, establishing an average price target of $585.96, meaning it should increase by more than 12%. NVDA's forward P/E is 55.15, a fairly low figure considering its industry and breakthrough tech solutions.
Trimble (TRMB)
TRMB’s AI solutions are helping clients ranging from governments to commercial entities do everything from constructing new buildings to surveying, managing resources, transporting people, and communicating through technology. TRMB has "B" grades in the Industry Rank, Peer Grade, Buy & Hold Grade, and Trade Grade POWR Components.
TRMB is ranked 18th of nearly 100 stocks in the Software - Application space. Out of eight analysts who have studied the stock, six recommend buying, two recommend holding and none advise selling. TRMB is all the more attractive considering its forward P/E ratio of 26.29 is quite reasonable considering its industry. It should come as no surprise if TRMB breaks through its ceiling of $54 and change at some point before the end of the year.
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AMZN shares were trading at $3,339.27 per share on Thursday morning, up $98.11 (+3.03%). Year-to-date, AMZN has gained 80.71%, versus a 10.71% 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.
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