We recently compiled a list of the 15 AI News That Should Not Be Ignored. In this article, we are going to take a look at where Fortinet, Inc. (NASDAQ:FTNT) stands against the other AI stocks that should not be ignored.
Artificial Intelligence is driving an unprecedented expansion in the potential market size for hardware and software products. According to Bain & Company, the market for AI-related hardware and software will witness annual growth rates of 40% to 55% over the next three years, potentially reaching a valuation between $780 billion and $990 billion by 2027. Companies investing in artificial intelligence know exactly how big of an opportunity this is and are determined not to miss it. Keshav Murugesh, Group CEO of WNS, a global business process management company, talked about its significance at the “CNBC Connect” event in Bangkok. According to Murugesh, many companies are underprepared for AI’s impact, particularly in areas such as government regulation. As such, there is clearly an upside to investing early in the technology.
“Three years from now, if you are investing significantly in generative AI, you might be disappointed, right? As we have seen in many technologies, sometimes the hype is much bigger than the reality. But, three years from now if you are not investing in generative AI, you are going to be terrified. Because those companies that made the investments now, will be far ahead of you”.
– Keshav Murugesh.
READ ALSO: 10 Trending AI Stocks on Latest Analyst Ratings and News and 8 Best Information Technology Services Stocks to Invest in Now
Latest Developments in AI
Let’s look at the latest developments in artificial intelligence to assess how they are helping businesses, customers, and society to reach the next level of success. In its first, Chinese scientists have developed the first AI-powered robot lifeguard to stand watch over the riverside site in Luohe city. Using artificial intelligence, big data, and navigation and tracking technologies, the robot will operate without any human intervention. While it is not the first robot lifeguard, it is the first to be fully automated and needs no intervention, South China Morning Post reported.
In other news, Japanese Prime Minister Shigeru Ishiba has pledged more than $65 billion of fresh support for the nation’s semiconductor and artificial intelligence sector. The move comes in hopes of narrowing the gap between Tokyo and global powers on chip support. Ishiba notes that he wishes to spread positive examples of regional revitalization like TSMC’s chip plant in Kumamoto across the nation.
Speaking of artificial intelligence, it seems that artificial intelligence companies are no longer scaling at the pace they were initially and that the outcomes from scaling up pre-training—the stage in AI model training where large volumes of unlabeled data are used to learn language patterns and structures—have seemingly reached a plateau. To overcome this plateau, researchers are now exploring “test-time compute,” a technique that enhances existing AI models during the so-called “inference” phase, or when the model is being used. This shift has the potential to reshape the AI landscape and impact the demand for hardware, challenging Nvidia’s dominance in training chips as the focus moves to the inference market.
For this article, we selected AI stocks by going 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).
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Fortinet, Inc. (NASDAQ:FTNT)
Market Capitalization: $74.33 billion
Fortinet, Inc. (NASDAQ:FTNT) provides cybersecurity solutions and services worldwide. This leading cybersecurity company leverages artificial intelligence across its cybersecurity products.
On November 11, HSBC analyst Stephen Bersey upgraded Fortinet, Inc. (NASDAQ:FTNT) to “Buy” from Hold and raised his price target to $111 from $83. The rating upgrade comes after the company’s better-than-expected Q3 earnings result and long-term outlook. The company reported a revenue of $1.51 billion for the third quarter, beating the analyst forecast of $1.48 billion and up 13% from the previous year. The company’s growth in the quarter was fueled by factors such as growth in Unified SASE (Secure Access Service Edge) billings and Security Operations billings (driven by demand from large enterprises), and a return to positive growth in Secure Networking. The company’s innovative use of FortiOS and FortiASIC technology also proved to be beneficial, while AI-driven security operations were its fastest-growing pillar, outpacing the market with a 32% billings growth.
Overall FTNT ranks 10th on our list of the AI stocks that should not be ignored. While we acknowledge the potential of FTNT 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 FTNT 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.