We recently compiled a list of AI News You Can’t Miss. In this article, we will examine how Super Micro Computer, Inc. (NASDAQ:SMCI) stands relative to other AI stocks.
Artificial intelligence (AI) is the new buzzword that is catching the attention of almost everyone on Wall Street. The sector, characterized by rapid growth, large investments, and intense competition, has seen a surge in venture capital (VC) funding in recent months. In 2023, global venture capital investments in AI startups exceeded $94 billion. This surge in funding reflects these investors’ strong belief in the transformative potential of AI across various industries. M&A activity in the space is also on the rise, with over 1,100 such deals in 2023 alone. Large tech companies are actively acquiring AI startups to strengthen their capabilities in the shortest possible time.
Some industry figures highlight the potential of AI in great detail. For example, in the healthcare sector, the healthcare AI market is expected to reach $102 billion by 2028, with startups focusing on diagnostics, drug discovery, and personalized medicine. In the financial sector, AI-powered financial services are expected to reach a market value of $26.67 billion by 2026, with startups focusing on fintech, fraud detection, and algorithmic trading. In the retail sector, AI is revolutionizing personalized shopping experiences and supply chain optimization, with the sector expected to grow at a CAGR of 34.4% by 2030.
To learn more about these developments, visit The 33 Most Important AI Companies You Should Pay Attention To And 20 industrial stocks that are already riding the AI wave.
Hedge fund interest in AI has increased in recent months, indicating the industry’s long-term growth potential. During routine media interviews, investor conferences, and their 13F activity, hedge fund managers have detailed their bullish views on AI. For example, AI CEO Bill Ackman said: Pershing Square Capital Managementsaid AI startups represent the next frontier of technology, offering unprecedented opportunities for innovation. He added that the key is to find those with a clear vision and the ability to execute in a rapidly changing landscape.
Likewise, Ray Dalio of Bridgewater Associates Paul Tudor Jones believes that the impact of AI on industries is undeniable and that startups leading this change are in a unique position to take advantage of it. Dalio adds, however, that it is crucial to invest in those building sustainable and ethical models, as they will be the winners in the long run. Tudor Investment Company believes that AI startups are not just about technology, but are transforming entire industries. He stresses that the challenge is to manage the hype and identify the true innovators who have the potential to disrupt established markets.
To learn more about these developments, visit Billionaire Stan Druckenmiller bets on AI infrastructure, tobacco and industrial stocks And 10 Tech Stocks to Watch Amid Market Volatility, According to Bernstein Analyst.
Our methodology
For this article, we selected AI stocks based on recent news and analyst ratings. These stocks are also popular with hedge funds. Why are we interested in stocks that hedge funds heavily invest in? The reason is simple: Our research has shown that we can outperform the market by mimicking the best stock picks of the best hedge funds. Our quarterly newsletter strategy selects 14 small- and large-cap stocks each quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A team of technicians in a server room, testing and managing the latest server solutions.
Super Micro Computer, Inc. (NASDAQ:SMCI)
Number of hedge fund holders: 47
Super Micro Computer, Inc. (NASDAQ: SMCI) develops and manufactures high-performance storage and server solutions based on a modular and open architecture. The company’s stock price has been on a steep decline since it announced earlier this week that it would not be able to file its regulatory Form 10-K on time. However, the company sought to allay investors’ concerns about accounting irregularities in a statement issued yesterday. In the press release, management said it does not expect any material changes to its fiscal 2024 numbers, despite being unable to file the report on time.
Following confirmation of Super Micro Computer, Inc.’s (NASDAQ:SMCI) filing delay, several Wall Street analysts have revised their ratings on the stock. Bank of America recently upgraded Supermicro to “under review,” noting that the filing delay and potential internal control findings from the review are leading to more uncertainty, making it difficult for the board to assess Supermicro’s fundamentals.
Global SMCI ranks 7th on our list of AI stocks you shouldn’t have missed. While we recognize SMCI’s potential as an investment, our conviction lies in the belief that some AI stocks have more promise to deliver higher returns, and in a shorter time frame. If you’re looking for an AI stock that has more promise than SMCI but is trading at less than 5x earnings, check out our report on the the cheapest AI stock.
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Disclosure: None. This article was originally published on Insider Monkey.