In this article, we will take a closer look at: US politicians are buying 10 AI stocks. Check out our article for an overview of these stocks. American Politicians Are Buying These 5 AI Stocks.
Despite soaring valuations for mega-cap tech companies on the back of the generative AI boom, AI The boom seems to have no end in sight. Made available to millions of people. Big tech companies that have lagged in the AI race are devising new AI-focused initiatives to please investors.
Apple strikes back with AI plans
For example, Apple (NASDAQ:AAPL), which has had a tough year so far amid concerns over rising iPhone sales, plans to launch a refreshed M4-powered Mac focused on AI applications. There was a backlash this month after reports that the company had done so. The Bloomberg report quotes Daniel Skelly, head of Morgan Stanley's wealth management market research and strategy team, as saying that Apple will provide more “clarity” and “visibility” to its AI pipeline. He said he expected to “come back.” Another latest report from Bloomberg reported that Apple Inc (NASDAQ: AAPL) is in talks with OpenAI to integrate its AI capabilities into Apple Inc's (NASDAQ: AAPL) iOS 18.
The net effect of Apple Inc's (NASDAQ:AAPL) AI efforts has been very positive, sparking renewed investor interest in the company's stock. Bloomberg quotes JPMorgan's Samik Chatterjee as saying hedge funds are starting to “warm up” to the opportunity of Apple's “AI upgrade cycle.”
A new ETF boom focused on AI
Hedge funds and individual investors alike are flocking to AI stocks like there's no tomorrow. A Bloomberg report recently highlighted the latest trend in Taiwan where people are investing their entire savings in AI-focused ETFs. Taiwanese have invested a whopping $50 billion in ETFs tracking local stocks, according to Bloomberg data. This is an increase of approximately 80% compared to the same period last year. Most of this surge occurred after the AI boom began. Taiwan Semiconductor, a top supplier of chips to NVIDIA Corp (NASDAQ: NVDA), has seen its stock price rise more than 60% over the past year.
BlackRock strategist says there's still room for AI stocks
Despite these gains, analysts think it's still early days for AI stocks. Wei Li, chief investment strategist at BlackRock Global, recently said that companies' revenue trajectories and guidance indicate this is a “future-proof” market when it comes to AI. He said many companies, including the Magnificent Seven group, are being punished for their guidance and profits because “bars are being raised.” She looks forward to her AI opportunities beyond just the technology sector, and also mentioned healthcare, finance, and industry.
AI Opportunities in Data Centers and Utilities
Data centers and utility companies are the biggest examples of the ripple effects of advances in AI. Power demand and data center solutions are expected to increase significantly in the coming months and years as AI software solutions become operational and used by millions of users around the world. Calvin Butler, CEO of utility company Exelon, recently said that AI will increase electricity demand from data centers in the Chicago area by 900%.
Data center company Vertiv talked about how it sees AI-related momentum in its business during its latest earnings call.
“AI-related orders continue to show strong momentum. Although we did not provide specific details of liquid cooling orders or broader AI-related orders, we have seen a significant increase in the pipeline of AI projects over the past two months. It is clear that the number has more than doubled.”
We are starting to see AI scaling in North America. This is consistent with the GPU roadmap, which says next-generation chips will require liquid cooling. Pipeline reflects changes in that technology, not just in terms of liquid cooling, but the entire powertrain and thermal chain. We are working closely with our customers to prepare their infrastructure for future conditions.
Supply chains continue to operate as expected, albeit not without occasional hiccups, and this is where it is important to constantly improve supply chain resilience. We continue to build a supply chain that supports the deployment of liquid cooling technology with the same rigor and resilience that we have built in our existing supply chain. The geopolitical environment is becoming increasingly complex. We are continually working to make our business more resilient. When you look at material inflation, it's a mixed bag, but we know that things can change quickly. We continue to believe that we are in an inflationary world and the price/cost plans we are implementing still reflect that.
There's a lot of emphasis on thermal management these days, and rightly so. As a market leader in data center cooling, we are uniquely positioned for this opportunity. But power also plays a very central role in evolving data center designs, enabling AI adoption, and driving overall market acceleration. ”
Please read the full transcript of the financial results conference here.
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methodology
Hedge funds and individual investors aren't the only ones flocking to AI stocks. In this article, we decided to find out which AI stocks American politicians prefer. To do so, we used publicly available data on U.S. congressmen and senators, and he selected 10 AI stocks that had seen buying from U.S. politicians over the past few months. For each stock, we mentioned the number of hedge fund investors.Why is it important to see what Washington insiders, executives, and hedge funds are buying? Insider Monkey's monthly newsletter and portfolio Focusing on stock selection from activist hedge funds, insider trading, and hedge fund investor newsletters and conferences, this stock returned 199.2% from March 2017 to March 12, 2024. This outpaced the S&P 500 ETF's 144.9% gain by more than 54 percentage points.
10. IBM Common Stock (NYSE:IBM)
Number of hedge fund investors: 50
IBM Common Stock (NYSE:IBM) is one of the stocks driving strong growth due to the AI boom. Earlier this year, investment firm Evercore called IBM Common Stock (NYSE:IBM) an “overlooked beneficiary of growing AI adoption.” On March 11th, Congressman Lloyd Doggett purchased between $1,000 and $15,000 worth of shares of IBM common stock (NYSE:IBM). Since then, the stock price of IBM Common Stock (NYSE: IBM) has fallen by 5%.
Diamond Hill Long-Short Fund said the following about International Business Machines Corporation (NYSE:IBM) in its Q4 2023 investor letter:
“Other junior contributors include Garmin’s short position and International Business Machines Corporation (NYSE:IBM), as well as our long-term position in Chevron. IBM's software and consulting businesses were strong in the quarter, driving revenue growth. However, the company faces a number of fundamental headwinds in both of these businesses and expects it to struggle to meet its cash flow outlook. ”
9. Texas Instruments Inc. (NASDAQ:TXN)
Number of hedge fund investors: 55
Semiconductor company Texas Instruments (NASDAQ:TXN) is one company that could benefit from the AI boom. Republican Congressman Kevin Hahn purchased shares of Texas Instruments Inc. (NASDAQ:TXN) on February 13th worth between $1,000 and $15,000. Since then, the stock price has increased about 5.5%.
Of the 933 hedge funds tracked by Insider Monkey, 55 funds reported owning shares of Texas Instruments Inc. (NASDAQ:TXN). The largest stakeholder in Texas Instruments (NASDAQ:TXN) during this period was Jean-Marie Eveillard's first It was Eagle Investment Management.
Diamond Hill Large Cap Strategy commented on Texas Instruments, Inc. (NASDAQ:TXN) in its Q3 2023 investor letter:
“Stocks of semiconductor manufacturing companies” Texas Instruments Company (NASDAQ:TXN) underperformed as its revenue outlook was slightly below market expectations. We believe these demand trends are temporary and view favorably our long-term prospects and superior competitive position. ”
8. Palo Alto Networks, Inc. (NASDAQ:PANW)
Number of hedge fund investors: 77
Palo Alto Networks, Inc. (NASDAQ:PANW) has attracted interest from America's most important politician when it comes to stock trading, Representative Nancy Pelosi. On February 21, Pelosi's spouse purchased a call option in Palo Alto Networks, Inc. (NASDAQ:PANW) worth between $101,001 and $250,000 with a strike price of $200 and an expiration date of January 17, 2025. did.
ClearBridge Large Cap Growth Strategy says this about Palo Alto Networks (NASDAQ:PANW) in its Q1 2024 investor letter:
“Given our view that the overall market looks expensive, primarily due to mega-cap valuations, a low likelihood that technology will continue to deliver significantly above-market returns, and an expected slowdown in economic growth, Management has guided our recent positioning efforts.''We have consistently trimmed out of our selection bucket and repositioned into stable cyclical stocks that are undervalued, while at the same time when prices become attractive. We also recognize position sizing to maintain the freedom to add to stocks.
During the first quarter, we continued to strengthen IT stocks for risk management and added high-conviction positions. For example, we reduced our active weight. Palo Alto Networks, Inc. (NASDAQ:PANW) after the information security software maker lowered its guidance, in part due to a new focus on offering short-term discounts on product bundles as it pursues consolidation opportunities more aggressively. . Although this strategy should put the company in a stronger position in the future, it may increase volatility in its performance in the near to medium term. ”
7. Qualcomm Inc. (NASDAQ:QCOM)
Number of hedge fund investors: 78
Qualcomm Inc. (NASDAQ:QCOM) ranks No. 7 on the list of the best AI stocks to buy, according to members of Congress.
Earlier this month, Benchmark initiated coverage on Qualcomm (NASDAQ:QCOM) stock with a Buy rating and a $200 price target. Benchmark analyst Cody Ackley said Qualcomm (NASDAQ:QCOM) is well-positioned to take advantage of the trend of moving artificial intelligence workloads to edge computing. On February 12th, Congressman Earl Blumenauer purchased shares of Qualcomm, Inc. (NASDAQ:QCOM) worth between $1,000 and $15,000. Since then, through April 22nd, Qualcomm Inc. (NASDAQ:QCOM) stock has increased approximately 5.4%.
Madison Sustainable Equity Fund says this about QUALCOMM Incorporated (NASDAQ:QCOM) in its Q4 2023 Investor Letter:
“Qualcomm Inc.” (NASDAQ:QCOM) also reported solid fourth-quarter results that beat expectations. Despite headwinds from Samsung, the company delivered better-than-expected results in the first quarter as inventory headwinds faded. Qualcomm remains well-positioned in the handset market and should benefit as artificial intelligence moves to edge devices, potentially expediting upgrade cycles. ”
6. ServiceNow Inc (NYSE:NOW)
Number of hedge fund investors: 91
On January 25th, Congressman Josh Gottheimer purchased shares of ServiceNow Inc (NYSE:NOW) worth between $1,000 and $15,000. Since then, the stock price has increased about 2%.
In December, Macquarie Equity Research raised its price target on ServiceNow Inc (NYSE:NOW) from $612 to $800, citing the potential for generative AI.
Polen Focus Growth Strategy says this about ServiceNow, Inc. (NYSE:NOW) in its Q1 2024 investor letter:
“We are reducing our positions at Adobe and Service Now Co., Ltd. (NYSE:NOW) earlier this quarter, as we believe the positive story in AI drove both companies to higher valuations than we feel comfortable with relative to their weightings in our portfolio. Both companies see increased revenue and profit potential from the generative AI products they incorporate into their products, such as Adobe's Firefly and ServiceNow's Now Assist. However, we do not expect these to become significant revenue contributors in the near future. Therefore, we felt it prudent to reduce our weight and reallocate it to other positions with better valuations. ”
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Disclosure. none. US politicians are buying 10 AI stocks Originally published on Insider Monkey.