We recently compiled a list of the 15 AI News You Should Not Miss. In this article, we are going to take a look at where Reddit Inc (NYSE:RDDT) stands against the other AI stocks.
According to a new report by Bloomberg Intelligence (BI), the generative AI market is set for rapid growth, projected to reach $1.3 trillion within the next decade. The market is expected to expand at a CAGR of 42%, initially fueled by training infrastructure and gradually shifting to inference devices for large language models (LLMs), digital ads, specialized software, and services in the medium to long term. Rising demand for generative AI products could generate an additional $280 billion of new software revenue, driven by specialized assistants, new infrastructure products, and copilots that accelerate coding.
READ ALSO: 10 AI News Investors Should Not Miss and Top 10 Trending AI Stocks in Q4
“The world is poised to see an explosion of growth in the generative AI sector over the next ten years that promises to fundamentally change the way the technology sector operates. The technology is set to become an increasingly essential part of IT spending, ad spending, and cybersecurity as it develops”.
-Mandeep Singh, Senior Technology Analyst at Bloomberg Intelligence
The AI world continues to buzz with recent advancements and breakthroughs. On October 29, Linkedin Corporate Communications announced the launch of their first-ever AI agent called Hiring Assistant, developed to take on a recruiter’s most repetitive tasks so that developers can steer their focus on the most impactful work. The company has also rolled out a new coaching feature in LinkedIn Learning to help learners practice human skills through interactive scenarios using text or voice.
In other news, Securiti, the pioneer in data security, privacy, governance, and compliance, announced on Tuesday that it has integrated Nvidia’s NIM microservices into its Securiti Gencore AI solution, empowering users in industries to easily and quickly build safe, enterprise-grade generative AI systems, copilots and AI agents by utilizing proprietary enterprise data safely in diverse data systems and apps.
Medicine is another area where AI is driving significant breakthroughs. On Tuesday, October 29, Biotech firm Iambic Therapeutics revealed that it has made a breakthrough artificial intelligence model. The model can radically reduce the time and money needed to develop new drugs. Its new AI drug discovery model is called Enchant, with a white paper published revealing how Enchant demonstrates a high degree of accuracy when predicting how well the human body would absorb certain drugs.
Asia is also making strides to take the lead in the AI race. The Korea Advanced Institute of Science & Technology (KAIST) has unveiled a new Artificial Intelligence method to speed quantum calculations. Professor Yong-Hoon Kim’s team from the School of Electrical Engineering has achieved a world-first; succeeding in accelerating calculations for electronic structure in quantum mechanics using a convolutional neural network (CNN) model.
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 content marketing website showing the audience reach of the company’s products.
Reddit Inc (NYSE:RDDT)
Number of Hedge Fund Holders: 39
Reddit Inc (NYSE:RDDT) is an American social news aggregation, content rating, and forum social network. The company has jumped on the AI bandwagon by licensing its data to train AI models, entering into data licensing agreements totaling over $200 million over the coming years.
On Tuesday, October 30, Citi analyst Ronald Josey raised the price target on Reddit Inc (NYSE:RDDT) to $120 from $70 and kept a “Buy” rating on the shares. This comes after the company reported its first quarterly profit and a fourth-quarter revenue forecast above estimates, fueled by its AI content licensing deals and strong digital advertising spending. According to the analyst, the company has reported “impressive” Q3 results with revenue coming in 11% above consensus and EBITDA coming in 57% above the high-end of guidance. The company is also witnessing continued user growth and engagement gains with daily active unique visitors reaching 97M. Citi believes the trends will continue as new ad options are introduced and areas like search, video, and shopping are monetized.
Overall RDDT ranks 13th among the AI stocks investors should not miss. While we acknowledge the potential of RDDT 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 RDDT 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.