We recently compiled a list of the 35 AI News and Ratings You Should Not Miss. In this article, we are going to take a look at where Analog Devices, Inc. (NASDAQ:ADI) stands against the other AI stocks that you should not miss.
Data center investments by hyperscalers to leap ahead in the artificial intelligence (AI) race are a hot topic on Wall Street. A latest study into the matter by consulting firm McKinsey sheds further light on the European market in this regard. According to the McKinsey report, data center power consumption in Europe is set to nearly triple by 2030, necessitating a significant increase in electricity supply, particularly from low-carbon sources, along with upgrades to grid infrastructure. McKinsey estimates that the total IT load demand from data centers in Europe is expected to grow to approximately 35 gigawatts (GW) by 2030, up from 10 GW presently. Current trends also indicate that data center power consumption in the region is anticipated to triple to over 150 terawatt hours (TWh) by the end of this decade.
Read more about these developments by accessing 10 Best AI Data Center Stocks and 10 Buzzing AI Stocks According to Goldman Sachs.
The report further reveals that data centers are expected to represent about 5% of Europe’s total power consumption in the next six years, compared to roughly 2% at present. Meeting this growing demand will require a minimum investment of around $300 billion in data center infrastructure, excluding power generation capacity. The report also highlighted that satisfying the increased electricity demand will require a substantial boost in supply, which represents a significant shift for Europe, where overall power demand has remained largely unchanged since 2007. Kevin Restivo of CBRE recently highlighted that demand for data center space in Europe is set to outstrip delivery of new stock for the third straight year and AI demand will exacerbate the issue.
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 technician working on power management in a semiconductor factory.
Analog Devices, Inc. (NASDAQ:ADI)
Number of Hedge Fund Holders: 64
Analog Devices, Inc. (NASDAQ:ADI) designs, manufactures, tests, and markets integrated circuits (ICs), software, and subsystems products. The stock was recently named in a research note on the broader semi industry by investment firm Susquehanna on October 21. The note, penned by analysts led by Chris Rolland, underlined that for industrials, Analog Devices had been among the first to confess to a down cycle, and recent softness suggested that weakness continued to persist. The note claimed that the automotive outlook for semis continued to underwhelm as well, as multiple automobile manufactures had pointed out elevated inventory, weak demand and lower-than-anticipated electric vehicle adoption.
Overall ADI ranks 23rd on our list of the AI stocks you should not miss. While we acknowledge the potential of ADI 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 ADI 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.