The ongoing artificial intelligence (AI) boom has stolen the attention of stock market investors, leaving them eagerly searching for the next big winner. With Nvidia’s (NASDAQ: NVDA) recent success as a key benchmark, market watchers are now on the lookout for the next groundbreaking AI stock that promises significant returns and potential market dominance.
In that view, one renowned investor has weighed in on this matter, offering her own observations about AI stocks that have tremendous potential. In an interview with Bloomberg TV on Wednesday, May 31, ARK Investment Management founder and CEO Cathie Wood said her widely-followed ARK Innovation ETF (ARKK) fund is currently in pursuit of software stocks that “are actually right now where Nvidia was when we first bought it.”
Specifically, Wood said her eyes are on three AI-related software companies, including communications tools provider Twilio (NYSE: TWLO), business automation platform UiPath (NYSE: PATH), and telehealth group Teladoc (NYSE: TDOC).
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“For every dollar of hardware that Nvidia sells, software providers, SaaS providers will generate 8 dollars in revenue.”
– Wood said in the interview.
All three companies have seen their share prices decline drastically from their all-time highs, suggesting they might be trading at a rare discount at the moment.
Twilio (NYSE: TWLO)
Twilio is a software firm developing a cloud-based platform that allows businesses to build and manage communication workflows with their customers.
Although Twilio’s primary focus is on developing communication services, its platform’s versatility allows integration with AI technologies to enable automated voice responses, text-to-speech conversions, natural language processing, sentiment analysis, and more.
At press time, shares of Twilio are trading at $62.67, up 4.2% on the day. While the stock is up around 25% this year – as part of the broader market rebound – it remains significantly down compared to its all-time high of $443.49 it reached in February 2021.
UiPath (NYSE: PATH)
UiPath is one of the leading Robotic Process Automation (RPA) software companies offering a platform for automating repetitive and rule-based tasks through software robots. While RPA primarily focuses on process automation, the company heavily relies on AI capabilities in its platform to enhance automation features.
At the time of publication, UiPath’s stock was standing at $16.57, up more than 6% in the past 24 hours. Over the past month, PATH gained more than 17% and over 27% since the start of 2023. Still, the stock is down 80% from its peak of $85.12 and 25% down compared to its 52-week high.
Teladoc Health (NYSE: TDOC)
Founded in 2002, Teladoc Health is a telemedicine company that provides remote healthcare services. To enhance its offerings and improve patient care, Teladoc has incorporated AI technology to enable new, sophisticated functionalities.
One notable application of AI in Teladoc Health’s services is the use of natural language processing (NLP) to facilitate intelligent triage and symptom analysis. Additionally, Teladoc Health utilizes AI algorithms for predictive analytics and risk stratification, as well as to extend to remote patient monitoring.
At the time of publication, Teladoc’s shares were trading at $22.42, down 1.1% on the day. Unlike the previous two stocks, TDOC has struggled to make a notable rebound this year and remains down 8.3% year-to-date.
However, Wood believes the potential is still there for the telemedicine company, given that it was trading at a whopping $294.54 roughly two years ago. Compared to its 52-week high, the stock is down 99.2%.
In summary, Wood believes these three stocks could attract investor attention in the future, because of their significant exposure to the rapidly-growing AI space, as well as their current stock price levels that could prove to be a bargain, considering historical potential.
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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
