In the swiftly evolving financial landscape, AI stocks to outperform the market have caught the attention of savvy investors. With the monumental rise of AI in stock trading, markets are undergoing a profound transformation. This isn’t your grandfather’s stock exchange anymore; it’s a dynamic, data-driven battleground where algorithms reign supreme.
For October 2023, we’re leveraging Bard AI to recommend stocks poised to outpace the market. As we progress into this era, it’s evident that AI-driven stocks outperforming the market are not just potential but likely. Ready for the stock market’s AI evolution? The future is algorithmic.
Here are 3 AI-backed stocks to consider:
Dynatrace (DT)
Dynatrace (NYSE:DT) is a key player in the realm of digital performance monitoring. It has been catching the discerning eye of investors and analysts alike. Following its first quarter financial disclosures for the fiscal year 2024, the company showcased growth. It displayed a commendable 24.6% growth in revenue, amounting to $332.9 million.
Furthermore, its net income surged to $38.2 million. This is a whopping 1706.4% year-on-year hike. This surge reflects the company’s robust financial health and efficient operations. Notably, the company exceeded expectations with an earnings per share of $0.27, surpassing projections by 22.2%.
What’s driving this positive momentum, you ask? Dynatrace’s successes are due to its smart integration of artificial intelligence into its offerings. This includes the acquisition of Rookout, a dev-focused observability start-up, and the introduction of generative AI capabilities. DA Davidson recently upgraded the stock due to notable advantages from AI. Analyst Gil Luria elevated his rating from Neutral to Buy, raising the share price target to $65 from the previous $50. The move suggests Dynatrace could be an AI-predicted stock to outperform the market.
Furthermore, Dynatrace has integrated generative AI capabilities into its Davis engine. This move enhances the platform’s observability and performance management.
Moreover, with Cisco’s (NASDAQ:CSCO) acquisition of Splunk (NASDAQ:SPLK) for $28 billion and Dynatrace’s strategic moves, the AI-empowered tech landscape is evolving. As Dynatrace taps into generative and hypermodal AI for faster application observability, it’s redefining the tech sector.
Considering these developments, investors ought to keep a close eye on Dynatrace. The company is establishing itself prominently in the AI-driven market landscape. Consequently, it stands as one of the AI stocks with the potential to outperform the market.
UiPath (PATH)
In an environment where many corporations are feeling the weight of market uncertainties, UiPath (NYSE:PATH) shines through, demonstrating resilience and foresight. This year, the company showcased an impressive 18.6% revenue jump, raking in a robust $287.3 million in the second quarter of 2024 alone. While it’s essential to factor in the net income decline, with the company registering a loss of $60.4 million, there’s a silver lining. The AI-centric enterprise outpaced earnings per share projections by an astonishing 172.5%. Clocking in an EPS of $0.09, this was a notable overachievement when juxtaposed against the anticipated $0.03.
Several strategic moves have positioned UiPath as a formidable contender in the AI stock predictions landscape. A significant highlight is its enhanced collaboration with Apprio, aiming to optimize and diversify its product offerings. In another stride forward, the unveiling of its generative AI-driven ‘Autopilot’ showcases UiPath’s dedication to remaining at the forefront of automation technologies.
But it’s not just about product developments and partnerships. Influential voices in the investment community, such as Cathie Wood, have cast the spotlight on UiPath, underscoring the transformative potential of AI to redefine productivity benchmarks.
Given the crescendo surrounding AI’s transformative capacity and UiPath’s unwavering commitment to pioneering in automation and generative AI spheres, it undoubtedly stands as a stock to observe. Investors keen on AI stocks to outperform the market should pay close attention to this one.
Microsoft (MSFT)
Among the biggest global tech titans, Microsoft (NASDAQ:MSFT) is a force worth noticing in the AI space. Not only is it at the forefront of advanced innovation, but it also stands as a model of financial expertise. The company’s recent fourth-quarter figures are nothing less than dazzling. Boasting a net income of a whopping $20.08 billion – a hearty surge of 20% – and revenues that gracefully danced to the tune of $56.19 billion, marking an uplift of 8.3%. What’s more, the cherry on the cake is that Microsoft’s EPS exceeded expectations by a striking 5.6%. Truly, this tech giant never ceases to mesmerize and reward its cadre of loyal investors.
But beyond the sheer numbers, what’s fascinating is Microsoft’s evident prowess in AI. The buzz around the company’s Copilot Product and its competitive edge in AI cannot be ignored. As AI stock predictions become more mainstream, Microsoft emerges as one of the AI stock picks positioned to outperform the market. The marriage of Microsoft with Activision Blizzard and the rapid growth of Microsoft-backed OpenAI – rumored to be valued at $90 billion – underscores its ambitions and potential in the AI realm.
As Bank of America suggests, AI’s economic footprint could swell to a staggering $15.7 trillion by decade’s end. Given this backdrop, Microsoft’s current trajectory suggests it’s geared to capitalize on this potential, making it one of the AI stocks to outperform the market.
On the publication date, Faizan Farooque did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.