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Jefferies Selects the Best AI Stocks to Buy – TipRanks Financial Blog

Jefferies Selects the Best AI Stocks to Buy – TipRanks Financial Blog

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Truly game-changing technologies seem to appear once every couple of decades. The personal computer appeared on the scene in the early ’80s, and the internet came into its own in the late ’90s. And now, AI is all the rage.

AI technology has taken the digital world by storm, finding its way into applications as varied as automation systems, marketing, and language translations. The introduction of generative AI at the end of 2022, with its potential to forever alter the way we interact with machines, has added another application as well as the promise of more intuitive use. In short, AI is this generation’s shiny thing.

The tech is here to stay, and that’s opening up opportunities for investors. Analyst Brent Thill, from Jefferies, has dipped into the workings of the AI sector, and tagged several big-name tech firms as long-term winners.

Outlining his criteria, Thill writes, “Investments centered on the ‘picks and shovels’ of AI have continued to outperform… We believe AI spend will spread to other infrastructure providers and to app vendors that enable enterprises to take advantage of Gen AI. Our AI KIS basket represents the companies we see capturing the most of this transformational opportunity. We advocate for investors to position themselves before enterprise adoption ramps in late ’24 into ‘25, providing a better line of sight to rev uplift.”

Thill’s choices include some of the Magnificent 7 mega-cap tech stocks, firms that are already deeply connected to the AI expansion: Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL), and Meta Platforms (NASDAQ:META). Let’s take a closer look at these big names, and at Thill’s comments on them.

Microsoft

We’ll start with the stock that Thill describes as the ‘Top AI Winner,’ Microsoft. We all know this company; Microsoft’s particular combination of popular products and sound management has brought it to the pinnacle of the tech world – and in some ways, of the economy generally. The company is currently the highest-valued publicly traded firm on Wall Street, with a market cap exceeding $3 trillion.

The key point for this discussion, however, is Microsoft’s deep involvement with AI. The company is a long-time backer of OpenAI, the developer of the ChatGPT chatbot that launched the current wave of generative AI technology. Microsoft has been a backer of OpenAI since 2019, and earlier this year invested an additional $10 billion in the company. We…

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