After a year marked by significant losses, the stock market has staged an impressive comeback in 2023. Both the S&P 500 and NASDAQ indices are reporting substantial year-to-date gains of 16% and 27%, respectively. Despite recent setbacks with the S&P down approximately 4% and NASDAQ down 6% this month, tech stocks have emerged as the standout performers on the stock market.
This surge in tech stocks in the market is attributed to the booming interest in artificial intelligence (AI) technology, particularly highlighted by the release of ChatGPT last November. AI’s transformative impact on markets, promising increased adaptability, efficiency, and profitability, has caught the attention of investors. Analysts suggest that the AI revolution is not a fleeting trend but a lasting transformation.
Leading the charge in championing tech stocks is Wedbush’s top-rated analyst, Daniel Ives. Known for his staunch support of tech stocks, Ives reassures investors in a recent note that now is not the time for trepidation. He acknowledges the intricate challenges facing the markets, referring to the current environment as a ‘Rubik’s Cube backdrop.’ Ives emphasizes, “We focus on tech growth led by AI… the rocket ship-like trajectory of AI driven growth that will hit the shores of the tech industry over the next 12-18 months speaks to our unabated bullishness for tech stocks.”
Among Ives’ top recommendations is Palantir Technologies (PLTR), a software firm that leverages AI-powered data analytics to enhance decision-making. The company’s AI-driven platforms serve diverse industries, from auto racing to healthcare, demonstrating its broad relevance. Palantir, with a market cap of $30 billion, reported revenues of $533 million in 2Q23, aligning with projections and marking a third consecutive profitable quarter. Its shares have surged an impressive 119% this year.
Ives underscores Palantir’s capacity to deliver essential AI data analytics systems while driving growth. He asserts, “Palantir is continuing to pioneer and guide customers to deploy products, optimize workflows, and produce operational results at industry-leading rates while incorporating privacy-protective features.” Ives maintains an Outperform (Buy) rating on PLTR shares, with a price target of $25, indicating a potential 78% upside.
The second spotlight in Ives’ portfolio is C3.ai, a software company wholly committed to AI integration. Offering a range of AI-powered products, including generative AI and machine learning, C3.ai serves a diverse clientele across industries such as manufacturing, financial services, and healthcare. Despite recent losses, C3.ai’s stock has surged an astonishing 138% since the start of the year.
While C3.ai reported positive earnings in fiscal 1Q24, it withdrew its net-profitability prediction for fiscal year 2024. Nonetheless, revenues of $72.4 million, surpassing forecasts, and a loss of 9 cents per share (non-GAAP) indicate a solid performance. Ives advocates for patient investment, anticipating long-term gains, noting that C3.ai is poised to capture a significant portion of the Generative AI market.
Ives rates AI shares an Outperform (Buy), with a price target of $42, suggesting a one-year gain of 63%. The broader market, however, remains more cautious with 12 recent analyst reviews, resulting in a Hold consensus view for AI shares.
In conclusion, 2023 has witnessed a resounding market rebound, largely driven by the AI tech surge. Palantir and C3.ai, under the scrutiny of top analyst Daniel Ives, stand as prime examples of the potential offered by AI-powered companies in shaping the market’s trajectory.
Source: Yahoo Finance
DISCLAIMER: The information provided is for informational purposes only and should not be considered as financial advice or a recommendation to buy or sell any securities. Investing in the stock market carries risks, and past performance does not guarantee future results. Always conduct thorough research and consult with a qualified financial advisor before making any investment decisions.
