We recently compiled a list of the AI News Investors Probably Missed. In this article, we are going to take a look at where GitLab Inc. (NASDAQ:GTLB) stands against the other AI stocks.
Investors have been looking for smart ways to play the artificial intelligence (AI) boom that has swept the global financial markets over the past two years. Most of the attention in this regard has been confined to obvious choices in semiconductors, software, and biotechnology. Even within these sectors, prominent companies and their AI initiatives have dominated headlines. However, there are several hidden gems within these sectors that offer the same bang for the buck, given present macro context, but are not in limelight as such. For example, Bernie Ahkong, an analyst at UBS, recently noted that the first phase of AI was interest towards chipmakers. In the second phase, investors moved towards the industrial companies which actually supply the components to the data centers. The present tilt towards utility and power firms is quite possibly the third phase of this AI focus.
Read more about these developments by accessing 33 Most Important AI Companies You Should Pay Attention To and 20 Industrial Stocks Already Riding the AI Wave.
A recent study on artificial intelligence by Stanford University in the United States reveals that businesses are already outpacing academics when it comes to training AI models. For example, in 2023, the AI industry was able to train nearly 51 notable machine learning models compared to just 15 for academia. This happened despite the costs associated with training models rising. For instance, ChatGPT 4, the latest iteration of the popular ChatGPT that launched the AI wave back in late 2022, cost nearly $80 million to train. Similarly, Gemini Ultra, an AI tool developed by Google, cost $191 million to compute. The number of AI patents is also increasing, evidenced by the fact that since 2010, the number of granted AI patents has increased more than 31 times.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.
Our Methodology
For this article, we selected AI stocks by combing through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A team of software engineers working together in an open office, developing innovative solutions.
GitLab Inc. (NASDAQ:GTLB)
Number of Hedge Fund Holders: 39
GitLab Inc. (NASDAQ:GTLB) develops software for the software development lifecycle in the United States, Europe, and the Asia Pacific. The firm beat market expectations on earnings per share and revenue in the second quarter earnings, prompting analysts to take note of the growth in the AI space. Wells Fargo increased the price target on GitLab Inc. (NASDAQ:GTLB) stock, bumping it up to $75 from $70, and maintained an Overweight rating. The advisory also highlighted that the artificial intelligence offerings of the software firm were gaining momentum. Sid Sijbrandij, the CEO of GitLab, said during the earnings call that enterprises were now looking beyond code generation to integrate AI into all aspects of software development to deliver tangible results.
Overall GTLB ranks 11th on our list of the AI stocks investors probably missed. While we acknowledge the potential of GTLB as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than GTLB but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.