MW After Nvidia's latest blowout, here are 20 AI stocks expected to rise as much as 44%
By Philip van Doorn
Nine out of 10 analysts covering Nvidia rate the stock a buy, even though it has more than tripled over the past year
With Nvidia Corp. reporting another set of amazing numbers, it's time for a broad look at the artificial-intelligence landscape to see which stocks are most favored by analysts.
Here's a sampling of coverage of Nvidia's $(NVDA)$ results for its fiscal fourth quarter, along with concerns over the stock's valuation and what to expect as the AI build-out continues:
Nvidia earnings send stock rocketing as company cheers AI 'tipping point'Nvidia's sheer dominance can be summed up by this one underrated numberNvidia's stock surge could add $200 billion in market cap with 'mammoth growth' on tapWall Street keeps likening Nvidia to dot-com-era Cisco. Is the comparison justified?Nvidia's growth and Intel's chip-making plans depend on AI fulfilling its promise
AI stock screen
One can screen stocks by sector or industry, but when it comes to artificial intelligence, a broad array of companies are involved in aspects of the infrastructure build-out, including those that provide the hardware needed to support the implementation of Nvidia's graphics processing units by data centers, along with cloud services, other software and power management.
So our new stock screen begins with the holdings of eight exchange-traded funds that take various approaches to track stocks of companies expected to benefit from AI implementation. If an ETF's portfolio is weighted by market capitalization, Nvidia is likely to be its largest holding, so the percentage of each fund's Nvidia position is indicated. Equal-weighted funds (or those with caps on weightings) are rebalanced periodically, so recent price appreciation will increase some holdings' weightings until the next rebalance.
ETF Assets ($mil)ETF weighting Stocks held Nvidia portfolio holding ranking Nvidia portfolio percentage Top holding if not Nvidia Global X Robotics & Artificial Intelligence ETF $2,508Market cap 42 1 18.9% Global X Artificial Intelligence & Technology ETF $1,232Market cap with maximum of 3% 85 2 3.3% Meta Platforms Inc. iShares Robotics & Artificial Intelligence Multisector ETF $612Equal weighting 111 3 1.3% Arm Holdings PLC ADR First Trust Nasdaq Artificial Intelligence & Robotics ETF $509Modified weighting based on involvement in AI or robotics 108 34 1.0% PKSHA Technology Inc. WisdomTree Artificial Intelligence & Innovation Fund $236Equal weighting 80 9 1.7% Arm Holdings - 3.00% Invesco AI & Next Gen Software ETF $226Modified weighting based on exposure to AI-related industries 100 1 10.1% ROBO Global Artificial Intelligence ETF $165Weighting by score based on AI contribution to sales 62 1 3.0% Roundhill Generative AI & Technology ETF $105Weighted by exposure score to generative AI and related industries 43 1 7.8% Sources: FactSet, ETF managers
Click the ETFs' tickers for more information, including each fund's expenses.
If we add the eight ETFs' holdings and remove duplicates, we're left with a global group of 339 stocks. We narrowed the list to 198 companies that have market capitalizations of at least $5 billion and are covered by at least 10 analysts polled by FactSet.
Here are the 20 remaining companies with at least 80% buy or equivalent ratings among analysts and whose stocks have the highest 12-month upside potential implied by the consensus price targets:
Company Country Share buy ratings Feb. 21 price Cons. price target Implied 12-month upside potentialHeld by Meituan Class B China 85% 77.00 136.68 44%AIQ Kuaishou Technology Class B China 93% 45.55 80.24 43%IRBO Baidu Inc ADR Class A China 90% 107.22 162.02 34%AIQ, ROBT, CHAT Tencent Holdings Ltd. China 95% 288.80 425.30 32%AIQ, IRBO, ROBT, CHAT Naver Corp. South Korea 81% 202,500.00 279,793.10 28%ROBT, WTAI, CHAT Renesas Electronics Corp. Japan 93% 2,429.00 3,345.71 27%ROBT, IGPT Smartsheet Inc. Class A U.S. 81% 41.46 56.55 27%AIQ Aptiv PLC Ireland 81% 77.63 104.87 26%ROBT Kanzhun Ltd. ADR China 83% 14.81 19.91 26%AIQ Infineon Technologies AG Germany 85% 32.90 44.10 25%AIQ, IRBO, THNQ Samsung Electronics Co. South Korea 95% 73,000.00 96,263.63 24%AIQ, IRBO, ROBT, WTAI GXO Logistics Inc. U.S. 82% 53.56 68.76 22%ROBT Nanya Technology Corp. Taiwan 92% 67.30 84.85 21%IGPT Nvidia Corp. U.S. 93% 674.72 832.03 19%All eight ETFs listed above Quanta Computer Inc. Taiwan 88% 236.00 290.94 19%CHAT Amazon.com Inc. U.S. 97% 168.59 207.70 19%All listed above except BOTZ and IGPT Delta Electronics Inc. Taiwan 90% 291.00 357.85 19%ROBT CyberArk Software Ltd. Israel 94% 244.07 298.12 18%AIQ Netease Inc. China 95% 171.40 207.49 17%IRBO HubSpot Inc. U.S. 80% 589.23 698.92 16%IRBO, IGPT, THNQ Source: FactSet
If a company made the list under a non-U.S. ticker where it is locally listed but also has a U.S.-listed American depositary receipt, we have only included the ADR in this table.
Click on the tickers for more about each company, including corporate profiles, price ratios, financials and estimates.
Click here for Tomi Kilgore's detailed guide to the wealth of information available for free on the MarketWatch quote page.
Don't miss: Want your stock picks to beat index funds? Look at companies with one key metric.
-Philip van Doorn
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February 22, 2024 13:46 ET (18:46 GMT)
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