Top 10 AI Company Stocks by Annual Return in 2023

Publicly traded AI companies have seen an exponential rise in the value of their stock as the AI craze continues. These businesses’ success can be attributed to a number of important elements that have helped them rise to the top of the AI field. They have a competitive advantage thanks to their capacity to address industry-specific needs and create ground-breaking goods and services.

For instance, Nvidia is currently the leading manufacturer of computer processors – which are key components for developing AI applications that increase productivity across industries – although American semiconductor company Advanced Micro Devices is seeking to compete. These applications have found use cases in different industries, where they automate complex tasks and streamline workflows.

From chipmaking and cybersecurity to drug discovery and financial services, the top 10 AI companies in this list have seen impressive financial performance due to the practical benefits of their AI applications. By providing AI-driven solutions across industries, these 10 companies have cemented their positions as industry leaders, driving continued growth not only in the field of artificial intelligence but also in their stocks.

Nvidia (NVDA)

While Nvidia is known for its graphic processing units that enable AI models to handle large datasets and process complex algorithms, the tech company has also been investing heavily in AI applications to drive the continued growth and advancement of artificial intelligence.

It recently poured $50 million into Recursion, a publicly listed biotech company, to accelerate AI-based drug discovery models. In June, Nvidia co-led Inflection AI’s  $1.3 billion funding round and invested in Runway AI’s $141 million Series C round. The company’s stock soared after strong Q1 earnings and its 1-year return is currently up 161% as of writing this.

Analysts’ rating and price target:

• Barclays: $600/share, Overweight
• Wolfe Research: $570/share, Buy

Upstart Holdings Inc (UPST)

Upstart is an AI lending platform that partners with banks and credit unions to offer consumer loans that incorporate non-traditional variables. Its AI lending platform analyzes vast amounts of data, including traditional credit metrics and non-traditional variables (such as colleges attended, area of study, GPA, and standardized test scores and work history), to assess borrowers’ creditworthiness and identify creditworthy individuals who may have been overlooked by traditional credit scoring methods, thus expanding access to credit for a broader range of consumers.

With the AI boom, Upstart’s stock has skyrocketed by 317% since the beginning of this year and over 78% in the last month. Its annual return in the past year is over 118% as of writing this. However, analysts are predicting a 65.21% downside for the company’s stock, with a price target of $18.85.

Analysts’ rating and price target:

C3.ai (AI)

Offering a number of AI applications for customer service, finance, and manufacturing, C3.ai’s products are designed to help businesses improve their operations by using AI to automate tasks, make better decisions, and improve customer service. The company has partnered with Google, Microsoft, AWS, and counts the U.S. Missile Defense Agency as one of its customers.

However, Wall Street analysts remain unimpressed despite C3.ai’s projected revenue for its fiscal year 2024, which is expected to range between $295 million and $320 million. Data from S&P Global Market Intelligence indicates that analysts had anticipated revenues closer to $321 million for the entire year. Since the beginning of 2023, C3.ai’s stock has surged an astonishing 243%. The company’s 1-year return is currently up 104% as of writing this.

Analysts’ rating and price target:

Recursion Pharmeceuticals Inc (RXRX)

First and foremost a biotech company, Recursion Pharmaceuticals is currently developing AI foundation models for biology and chemistry In May, Recursion acquired Valence, an AI-driven deep learning institute for drug discovery, and Cyclica, an AI-enabled deep learning engine for digital chemistry. Through these acquisitions, Recursion aims to provide widespread access to large-scale models that can significantly impact the field of drug discovery.

On Jul 12, Recursion announced a partnership with Nvidia as well as a $50 million investment from the chipmaker, causing RXRX to hit a 52-week high of $14.99 at the time. Its stock value has increased more than 86% in the past 1 year.

Analysts’ rating and price target:

Palantir Technologies (PLTR)

Palantir Technologies is known for its advanced data analytics and AI-driven solutions, catering to a diverse range of industries, including government, finance, healthcare, and cybersecurity. Palantir’s flagship platform, “Foundry,” empowers organizations to integrate, analyze, and visualize massive and complex datasets from various sources, enabling data-driven decision-making and actionable insights.

One of the key aspects of Palantir’s offerings is its AI capabilities, which augment the data analysis process and enhance predictive modeling. Palantir also makes AI/ML models operational by deploying them on top a reliable data foundation. These models are continuously refined through user decisions and feedback, fostering an iterative cycle of improvement. The company’s platforms form the basis for comprehensive MLOps, driving AI/ML from the experimental stage to practical implementation in the real world. Its stock value has increased more than 67% in the past 1 year.

Analysts’ rating and price target:

Oracle Corp (ORCL)

Known for its wide array of enterprise software products and services, Oracle has been integrating AI capabilities into its offerings to provide businesses with data-driven insights and advanced automation. The company’s AI offerings encompass a range of applications, from customer experience and marketing automation to supply chain management and human resources.

One of Oracle’s flagship AI products is “Oracle AI Platform,” a comprehensive solution that facilitates the development and deployment of AI models across various industries,allowing businesses to enhance decision-making processes, predict trends, and automate repetitive tasks. Oracle’s AI-driven applications, such as “Oracle Adaptive Intelligent Apps,” enable businesses to deliver personalized customer experiences, optimize sales and marketing efforts, and streamline operational workflows. The company recently partnered with Cohere to provide generative AI services for enterprises and is adding generative AI capabilities to its HR software. Its stock has increased by more than 57% in the past year.

Analysts’ rating and price target:

Cadence Design Systems (CDNS)

Founded in 1988 and headquartered in San Jose, California, Cadence Design Systems is one of the key players in the semiconductor industry. he company’s comprehensive suite of tools and services covers various stages of the design process, from concept to final product, helping semiconductor manufacturers and system designers bring innovative electronic devices to market efficiently.

The company offers advanced memory interfaces required by AI applications in servers as well as Tensilica® DSPs and processors to optimize audio, vision and AI at-the-edge processing. Its stock value is up 44.85% in the past year.

Analysts’ rating and price target:

• Rosenblatt: $250/share, Buy
• Stifel: $300/share, Buy

Palo Alto Networks (PANW)

Palo Alto Networks is a renowned cybersecurity company headquartered in Santa Clara, California. The company offers a wide range of innovative security solutions, including its cloud security automation platform, designed to secure cloud-based applications and data. Palo Alto Networks’ cloud security automation provides real-time visibility, threat detection, and automated response capabilities.

The company uses machine learning algorithms to analyze vast amounts of data and identify patterns indicative of malicious activities in order to defend against emerging cyber threats that exploit AI and machine learning technologies. Palo Alto Networks’ stock has seen an annual return of 42.79% in the past year.

Analysts’ rating and price target:

• KeyBanc: $285/share, Overweight
• Oppenheimer: $290/share, Outperform
• JMP Securities: $300/share, Outperform

Advanced Micro Devices (AMD)

AMD is known for its innovative CPU and GPU technologies that power a wide range of computing devices, from high-performance computers to gaming consoles and data centers. In recent years, AMD’s GPUs have gained traction in the AI space, especially at a time when there’s an increased demand for chips.

In June, AMD unveiled its CPU and AI accelerator solutions as it seeks to compete with Nvidia. It also launched a software ecosystem consisting of a collection of software tools and resources designed for data center accelerators. AMD’s stock value is up 25.17% in the past year.

Analysts’ rating and price target:

• Wolfe Research: $150/share, Outperform
• BofA Securities: $130/share, Neutral

Marvell Technology (MRVL)

With a strong focus on providing innovative solutions for data storage, networking, and connectivity, Marvell powers the digital infrastructure of various industries. The company’s portfolio includes a diverse range of products, such as data center and enterprise storage solutions, networking devices, automotive Ethernet solutions, and wireless connectivity chips.

Marvell’s technology offerings have a broad impact across multiple sectors, including cloud computing, artificial intelligence, automotive, and 5G wireless technology. The company’s expertise in data storage and networking solutions enables seamless data transfer and processing, critical for modern data-intensive applications and AI workloads. Its stock value has increased by 23.92% in the past year.

Analysts’ rating and price target:

• Stifel: $80/share, Buy
• Wolfe Research: $80/share, Outperform
• Keybanc: $80/share, Buy

Top 10 AI company stocks by annual return cheatsheet

FAQs

Conclusion

These 10 companies showcase the significant impact of artificial intelligence in driving growth and innovation across diverse industries. They have leveraged AI technologies to achieve remarkable financial performance and stock returns, solidifying their positions as leaders in the AI industry.

From providing cutting-edge data analytics and machine learning solutions to enabling advanced automation and personalized customer experiences, each of these companies has demonstrated the practical benefits and real-world applications of AI technologies.

As the AI industry continues to evolve and expand, these top-performing AI stocks serve as a testament to the transformative power of artificial intelligence. Investors looking to tap into the potential of AI-driven technologies should approach with due diligence, considering market risks and consulting with financial advisors.

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