Wall Street continues assigning buy ratings for artificial intelligence (AI) stocks. The sector’s rally remains solid as corporations post record revenue and earnings. Some AI stocks have overstretched themselves and need perfection to justify their valuations. However, a few AI stocks can still deliver long-term gains.
Although investors can analyze stocks, it’s a good idea to evaluate Wall Street’s outlook. Stock analysts dig deep into investment theses for a living and present their research to consumers and clients. So, let’s delve into the top AI stocks that are captivating Wall Street.
Alphabet (GOOG, GOOGL)
Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) has been late to the AI party. Other tech giants have been pushing ahead, but Alphabet has been gaining traction. Alphabet is working on a custom AI chip that will make AI more affordable and accessible for its customers.
Also, Google Cloud is a growing revenue segment that makes up roughly 11% of the company’s total revenue. It’s helped the company increase its revenue by 13% year-over-year (YOY) in Q4 2023.
The stock is rated as a strong buy among 37 analysts with an average price target that suggests a 6% upside. The highest price target of $185 per share indicates that the stock can rally by an additional 18%.
Finally,Alphabet shares are up by 13% year-to-date (YTD), gaining 159% over the past five years. The company has done a great job of increasing its profit margins. The stock trades at a 29 P/E ratio.
Amazon (AMZN)
Cloud computing is an important component of AI, helping AI apps to run smoothly. Amazon (NASDAQ:AMZN) is the leader in the cloud computing industry with a 31% market share in the industry. The company trumps competitors as it continues delivering impressive financial growth.
Amazon Web Services (AWS) grew by 13% YOY in the fourth quarter of 2023 to reach $24.2 billion in total sales. And, Amazon as a whole generated $170.0 billion in the quarter which was up by 14% YOY. Also, the tech conglomerate works exceptional well at raising its net profit margins.
Therefore, investors are excited about the company’s initiatives. The average price target suggests a 13% upside. The highest price target of $230 per share indicates that shares can gain an additional 24% from current levels. AMZN is a strong buy based on the ratings from 41 analysts, while the stock is up by 81% over the past year.
Crowdstrike (CRWD)
Crowdstrike (NASDAQ:CRWD) is gaining market share in the cybersecurity industry and delivering exceptional long-term gains for shareholders. The stock has increased 141% over the past year and is up by 382% over the past five years.
Furthermore, CRWD generated more than $3 billion in annual recurring revenue and reported a 33% YOY revenue increase in Q4 FY24. Its Falcon Platform is one of the most reliable resources for businesses that want to detect and address threats before becoming widespread problems.
Since AI is an innovative technology, it creates new vulnerabilities. For instance, cybercriminals are using deepfake technology to impersonate executives. So, while generative AI has great potential, the technology has also fallen prey to bad characters.
Increasingly, Modern cybersecurity is becoming a battle of AI tools. And Crowdstrike has been investing in AI to keep its customers protected. Those investments can help it gain additional market share in the industry.
On this date of publication, Marc Guberti held long positions in GOOG and AMZN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.