In this piece, we will take a look at the 12 best machine learning stocks to buy. If you want to skip our industry analysis and introduction to the top players, head on over to 5 Best Machine Learning Stocks To Buy.
Machine learning is a technology that is right at the heart of 2023's technological revolution. Over the past couple of decades, we have seen several technological products such as semiconductors, personal computing devices, and the Internet revolutionize both business and public life. Now, it's time for machine learning to shine since it is one of the applications of artificial intelligence - the hottest technology these days.
Artificial intelligence has also played a crucial role in the stock market this year. The current rally in artificial intelligence started when ChatGPT made waves on the internet and impressed users with its ability to generate life like responses. This injected fresh optimism into the shares of firms that are directly linked to Open AI. These include NVIDIA Corporation (NASDAQ:NVDA) and the Taiwan Semiconductor Manufacturing Company (NYSE:TSM). NVIDIA's graphics processing units (GPUs) are responsible for powering Chat GPT and training the artificial intelligence platform. And these products are made by TSMC, the world's largest contract chip manufacturer.
As a whole, the largest shareholders of AI related firms have profited quite a bit from artificial intelligence stocks. These have cumulatively led to billionaires such as Larry Ellison of Oracle Corporation (NYSE:ORCL) and Mark Zuckerberg of Meta Platforms, Inc. (NASDAQ:META) adding $150 billion to their wealth. NVIDIA's shares are up by a whopping 195% year to date and the firm is the only semiconductor company that is currently worth more than a trillion dollars on the stock market. Meta, which faced a bloodbath on the stock market last year after its chief Mark Zuckerberg plowed billions of dollars into the metaverse, also saw some much needed love. Its shares are up by 130% year to date, lending it a market value of $735 billion.
The investor attention on machine learning is not without reason either, especially when we consider the market value and growth rates of the industry. For instance, a report from Fortune Business Insights outlines that the market is slated to grow at a compounded annual growth rate (CAGR) of 38.8% between 2022 and 2029 to grow from an initial $21 billion at 2023 end to $210 billion by the end of the forecast period. Similarly, a report from Market Research Future also has a 38.8% CAGR for a value of $106 billion by 2030.
So what are the top players in the machine learning market doing these days? Well, NVIDIA made a big but silent move in February this year when it acquired the machine learning startup OmniML. OmniML is a software company that develops software to speed up the machine learning process. Machine learning requires programmers and others to train models before the models are able to generate insights. OmniML automates this entire process to streamline the development process and enable quicker deployment of machine learning models. NVIDIA also has its own resources that enable developers to leverage and use machine learning and artificial intelligence technologies. It partnered up with Microsoft Corporation (NASDAQ:MSFT) in May 2023 to use the latter's Azure machine learning platform for providing products and services to users for rapidly deploying these networks.
Another key player in the machine learning industry is Alphabet Inc. (NASDAQ:GOOG). Alphabet has massive computing resources at its disposal, allowing it to develop numerous models for countless different use cases such as search engine queries. Another use case that is seeing attention from Google is money laundering. Announced in June 2023, the new platform uses machine learning to create a customer risk score to lower costs, improve risk detection, and provide a better customer experience. The anti money laundering platform has also been employed by HSBC Holdings plc (NYSE:HSBC) and Banco Bradesco S.A. (NYSE:BBD), with the former reporting as much as a fourfold increase in recognizing suspicious activity and a 60% reduction in alert volumes.
Yet, as big as Google is, anti money laundering is just one of the ways in which it is utilizing machine learning and artificial intelligence. During the firm's first quarter of 2023 earnings call, its chief Mr. Sundar Pichai shared:
And as we continue to bring AI to our products, our AI principles and the highest standards of information integrity remain at the core of all our work.
With these details in mind, let's take a look at some of the best machine learning stocks that are being favored by hedge funds. Som top machine learning stock picks are Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG).
12 Best Machine Learning Stocks To Buy
Our Methodology
To make our list of the best machine learning stocks, we first compiled a list of all companies that either provide the hardware for machine learning or have significant products that are based on the technology. Then, the number of hedge funds that had bought their shares as of the first quarter of 2023 was determined and the top 12 machine learning stocks are as follows.
12 Best Machine Learning Stocks To Buy
12. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Investors In Q1 2023: 49
International Business Machines Corporation (NYSE:IBM) is one of the biggest technology companies in the world. It enables customers to accelerate their artificial intelligence and machine learning platform deployment to manage large datasets and finetune models.
By the end of March 2023, 49 of the 943 hedge funds part of Insider Monkey's database had bought a stake in International Business Machines Corporation (NYSE:IBM). The firm's largest shareholder is Peter Rathjens, Bruce Clarke, and John Campbell's Arrowstreet Capital with a $673 million investment.
Along with Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Alphabet Inc. (NASDAQ:GOOG), International Business Machines Corporation (NYSE:IBM) is a top machine learning stock finding favor with hedge funds.
Autodesk, Inc. (NASDAQ:ADSK) is a design software provider. It uses machine learning to enable professionals, such as architects, to sift through different designs and solve complex problems by leveraging big data.
57 of the 943 hedge funds profiled by Insider Monkey for their first quarter of 2023 investments had held the firm's shares. Autodesk, Inc. (NASDAQ:ADSK)s largest hedge fund investor in our database is Ian Simm's Impax Asset Management with a $253 million stake.
Snowflake Inc. (NYSE:SNOW) is a cloud computing platform provider. It enables users to scale their machine learning models and leverage big data to generate insights along with integrating third party data into their systems.
As of Q1 2023, 63 of the 943 hedge funds surveyed by Insider Monkey had bought Snowflake Inc. (NYSE:SNOW)'s shares. Brad Gerstner's Altimeter Capital Management is the firm's largest shareholder with an investment of $2.3 billion.
Oracle Corporation (NYSE:ORCL) is one of the biggest enterprise computing companies in the world. It enables customers to prepare their data for machine learning as well as deploy the models. Oracle Corporation (NYSE:ORCL) also has a ready made database of algorithms to enable fast machine learning model deployment.
By the end of 2023's March quarter, 67 out of the 943 hedge funds profiled by Insider Monkey had bought a stake in the firm. Oracle Corporation (NYSE:ORCL)'s largest hedge fund investor in our database is Jean-Marie Eveillard's First Eagle Investment Management since it owns 20.6 million shares that are worth $1.9 billion.
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is another cloud computing company. Its systems use machine learning to identify threats against networks and enable risk detection and mitigation.
After digging through 943 hedge funds for their Q1 2023 shareholdings, Insider Monkey discovered that 72 had bought and owned CrowdStrike Holdings, Inc. (NASDAQ:CRWD)'s shares. Jim Simons' Renaissance Technologies is the firm's biggest stakeholder with a $383 million stake.
Micron Technology, Inc. (NASDAQ:MU) is a semiconductor firm. It primarily designs and sells memory products that are essential for any large scale computing system, including machine learning models.
73 of the 943 hedge funds part of Insider Monkey's March quarter of 2023 database had invested in the firm. Micron Technology, Inc. (NASDAQ:MU)'s biggest shareholder is Rajiv Jain's GQG Partners with a $259 million investment.
Advanced Micro Devices, Inc. (NASDAQ:AMD) is another hardware firm. Its GPUs, like NVIDIA's, are able to support machine learning applications.
After sifting through 943 hedge funds for their first quarter of 2023 investments, Insider Monkey discovered that 91 had bought a stake in Advanced Micro Devices, Inc. (NASDAQ:AMD). Ken Fisher's Fisher Asset Management is the firm's largest hedge fund shareholder in our database with a $2.5 billion stake.
Amazon.com, Inc. (NASDAQ:AMZN), Advanced Micro Devices, Inc. (NASDAQ:AMD), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG) are some great machine learning stocks.
