Thursday, May 23, 2024

2023’s Top 4 AI Stocks: Predicted to Blast the Stock Market with Impressive Returns

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The stock market is a dynamic playground, and this year, experts are buzzing with excitement over the potential of Artificial Intelligence (AI) stocks. AI has become a transformative force across various industries, captivating investors with its limitless possibilities. In this article, we dive into four AI stocks that have captured the attention of experts and are poised to skyrocket in the 2023 stock market. Brace yourself for an exploration of these AI-powered gems that hold tremendous growth prospects for savvy investors. Get ready to unlock the true potential of AI stocks in this exhilarating year ahead!


AI Stocks to Buy Today   Tweet


1. Upstart (UPST)

Revolutionizing the credit industry with the power of artificial intelligence (AI), Upstart is an innovative cloud-based lending platform. Their mission is to automate the traditional manual process of credit underwriting, replacing it with an AI-driven system that offers faster and more cost-effective lending solutions for all.

At the core of Upstart’s disruptive approach is their proprietary AI algorithm for pricing credit risk. This algorithm leverages data analysis to evaluate an individual’s creditworthiness, introducing a new and more comprehensive method compared to the traditional FICO score.

By automating the credit underwriting process, Upstart aims to eliminate unnecessary costs associated with intermediaries, ultimately making lending more affordable and efficient. The driving force behind this vision is their advanced AI system, which has undergone continuous enhancements, training, and refinement over an impressive eight-year period.

Upstart’s AI models cover a wide range of factors, including fee optimization, income fraud, acquisition targeting, loan stacking, prepayment prediction, identity fraud, and time-delimited default prediction. Drawing insights from an extensive transaction database consisting of 21.6 million repayment events and incorporating over 1,500 variables, these models have demonstrated their effectiveness in assessing credit risk.

Despite experiencing a recent decline in its stock value, Upstart presents a compelling opportunity. Concerns arose following an earnings report that raised doubts about the reliability of AI models in a slowing economy with increasing interest rates. However, historical data strongly supports Upstart’s AI models, showcasing superior risk pricing capabilities for individuals with good or decent credit profiles and comparable performance to legacy methods for those with poor credit.


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Considering Upstart’s current valuation, trading at just 11 times forward sales with projected revenue growth exceeding 30%, the stock appears significantly undervalued. Furthermore, the company boasts an exceptional combination of growth and profitability, positioning it favorably within the market.

While Upstart may be relatively new to traditional Wall Street, its potential disruption in the credit industry cannot be overlooked. With a few successful quarters, the misunderstanding surrounding Upstart’s AI models is likely to dissipate, potentially leading to a substantial increase in the stock’s value. As witnessed with other tech companies in the past, Wall Street has a tendency to initially misunderstand disruptive ventures, creating opportunities for significant gains.

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In conclusion, Upstart’s cloud-based AI lending platform holds tremendous promise for transforming the credit industry. By leveraging AI technology, Upstart aims to streamline and optimize the lending process, making it more accessible and efficient for borrowers. Despite current market misconceptions, Upstart’s AI models demonstrate their superiority and potential to become the foundation of modern credit underwriting. For investors, Upstart represents an attractive opportunity due to its strong growth potential, profitability, and undervalued stock price.


2. Innoviz (INVZ)

Imagine a world where cars can drive themselves, taking you safely and effortlessly to your destination. This may sound like something out of a sci-fi movie, but it’s actually becoming a reality thanks to artificial intelligence (AI). Autonomous vehicles (AVs) use AI algorithms to process data from sensors and cameras, allowing them to make split-second decisions and ensure the safety of passengers and pedestrians.

AI-powered self-driving cars are not just a trend or a buzzword. They are already on the roads in various cities in the United States, providing transportation services and even saving lives. Major car manufacturers are investing billions of dollars in AV technology and plan to release their own self-driving models in the near future. Tech giants are also actively involved in this field, acquiring startups and filing patents related to AVs. Regulators are also working on policies and standards to support the widespread adoption of autonomous vehicles.

This rapid development of AVs presents a great opportunity for investors. The market for AV stocks is currently undervalued and overlooked, but it’s expected to soar as the demand for self-driving solutions grows. If you’re interested in investing, we have identified some of the best AV stocks for you to consider, which are likely to take off in 2023 and beyond.

One of these promising stocks is Innoviz (INVZ), a leading developer of light detection and ranging (lidar) sensors. The company has a strong financial position, with $212 million in cash reserves, despite currently having no revenues and an annual cash burn of about $100 million. However, revenues are projected to increase significantly starting in 2023, with a substantial jump expected in 2024. Despite its potential, Innoviz is currently valued at around $440 million.

What makes Innoviz stand out in the industry is its unique solid-state technology. Instead of relying on traditional lidar systems that use bulky and expensive motors to move mirrors and reflect laser pulses, Innoviz has developed a solid-state lidar that utilizes micro-electro-mechanical system (MEMS) mirrors. These MEMS mirrors can tilt without the need for motors, significantly reducing costs and size. Innoviz aims to offer its next-generation lidar sensors at a price point of around $500, which would be the lowest in the industry (compared to an estimated lowest cost of $1,000 for similar systems available today).

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Innoviz’s MEMS technology has attracted major contracts from renowned car manufacturers such as BMW and Volkswagen. These companies have recognized the potential of Innoviz’s solid-state lidar and have partnered with the company. The deployment of this technology is expected to begin next year.

Considering Innoviz’s unique technology, significant contract wins, clear path to revenue growth, and its currently discounted valuation, it is considered one of the most promising AV stocks on the market. As we anticipate a strong showing for self-driving stocks in 2023 and 2024, Innoviz stands out as a well-positioned investment opportunity.


3. BigBear.ai (BBAI)         Tweet

Data is highly valuable in the business world as it enables companies to enhance their products, marketing, and customer service, streamline operations, mitigate risks, and gain insights into their customers. Data-driven organizations have a higher likelihood of surpassing their revenue goals compared to non-data-driven ones.

The Intelligence Economy represents a new era where businesses leverage big data to achieve better outcomes. Embracing data-driven decision making is crucial for survival and success in this era. By 2030, it is projected that every business worldwide will operate as a data-driven organization.

Despite the potential of data-driven decision making, a recent survey indicates that only 31% of companies have adopted this approach. This gap between the current state of the business market and the future indicates significant growth opportunities for AI firms that develop Big Data analytics software.

Palantir is an impressive company in the field. They specialize in designing AI-powered analytics solutions that enable customers to find, track, and analyze a vast array of information. Having started as a government-sponsored research project, Palantir now caters to both government agencies and commercial enterprises. However, its valuation is already high.

Another company worth considering is BigBear.ai, based in Columbia, Maryland. They have developed an end-to-end data analytics platform utilizing AI and machine learning algorithms. Initially focused on selling to government organizations, BigBear.ai has successfully expanded into the commercial market. Factors contributing to their potential include their impressive technology with proven results, more affordable pricing compared to Palantir, a skilled and experienced team, robust revenue growth, and a lower valuation.

In conclusion, investing in BigBear.ai presents an opportunity in the Intelligence Economy. With their advanced technology, strong team, and promising growth trajectory, they have the potential to thrive in the data-driven market.

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4. Intrusion (INTZ)

Investing in cybersecurity stocks can be a smart move to benefit from the ongoing crisis between Russia and Ukraine in Europe. In today’s world, warfare is not limited to physical combat but also includes digital attacks. The cyberwarfare between these two countries has been intense, with hacker groups like “Anonymous” targeting Russian assets and Russia retaliating by hacking Ukrainian cameras and websites.

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Even major companies like Nvidia and Toyota have fallen victim to hacking incidents, which may be related to the conflict. Russia, having limited options to fight back economically or militarily, resorts to cyberattacks as a cheap and effective means to cause damage and disruption.

As this conflict escalates, it is anticipated that the United States, its allies, and major corporations will invest significant amounts of money in bolstering cybersecurity measures. Therefore, investing in cybersecurity stocks now could prove to be a wise decision before the demand for cybersecurity solutions further increases.

Among the potential choices, there is a small company called Intrusion (INTZ) that stands out with high upside potential. This company has recently developed a networking security solution called Shield, which incorporates artificial intelligence to create one of the best available defenses in the industry.

Intrusion, founded in the 1980s, has primarily focused on providing networking security solutions to U.S. government customers, generating about 85% of its revenues from those sales. However, with the introduction of Shield, Intrusion aims to expand its commercial reach in the growing cybersecurity market.

While investing in Intrusion carries some risks, if their Shield product lives up to its claims, the stock could experience substantial growth. Despite its small size, the company has made positive changes in its management team, including the appointment of a new CEO with a strong background in cybersecurity.

Investing in Intrusion presents a unique opportunity to be part of a disruptive product in a highly profitable industry. The importance and profitability of cybersecurity are only expected to increase as technology advances and threats multiply. If Shield proves to be a valuable and widely adopted product, Intrusion’s revenue could surpass $500 million within a few years, potentially leading to significant long-term profits.

As the conflict between Russia and Ukraine evolves into a global cyberwarfare scenario, cybersecurity stocks are well-positioned to experience a period of accelerated growth. While there are other solid options available, our analysis suggests that Intrusion offers particularly attractive upside potential.


Concluding

In conclusion, the year 2023 presents a thrilling opportunity for investors interested in AI stocks. Upstart, Innoviz, BigBear.ai, and Intrusion are four AI companies that have captured the attention of experts and are predicted to deliver impressive returns. Whether it’s revolutionizing the credit industry, driving the future of autonomous vehicles, leveraging data analytics, or providing cybersecurity solutions, these stocks offer promising growth prospects. As the AI revolution continues to unfold, investing in these AI stocks can unlock the true potential of this transformative technology and potentially yield substantial profits.

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Mezhar Alee
Mezhar Alee
Mezhar Alee is a prolific author who provides commentary and analysis on business, finance, politics, sports, and current events on his website Opportuneist. With over a decade of experience in journalism and blogging, Mezhar aims to deliver well-researched insights and thought-provoking perspectives on important local and global issues in society.

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