Artificial intelligence (AI) stocks have been down for more than a year. Driven by a large and growing market size, the AI powerhouse isn’t expected to stop anytime soon — and in fact, brokerage Goldman Sachs ( GS ) says investors should prepare for four distinct “waves” of AI adoption.
Similarly, KeyBanc recently highlighted stocks within the enterprise software sector that it believes are particularly well-positioned to monetize artificial intelligence and capitalize on cloud efficiencies. For investors looking for stocks with plenty of AI-powered stocks left in the tank, here are five Wall Street-approved software stocks.
Software Stock #1: Sprout Social
Sprout Social (SPT) provides a social media management software platform for businesses. Their platform helps businesses manage their social media presence across platforms. Its market capitalization is currently $3.4 billion.
Germ stock it fell by 3.5% compared to the beginning of the year.
Sprout’s leadership in social media management and its use of artificial intelligence to improve its operations are positive drivers, according to KeyBanc analysts.
Overall, analysts rated the stock a “strong buy,” with an average target price of $72.82. This indicates an upside potential of around 22.7% from current levels. Out of 13 analysts covering the stock, 11 have a “Strong Buy” rating, 1 have a “Moderate Buy” rating and 1 have a “Hold” rating.
Stock Software #2: Monday.com
Founded in 2014 and headquartered in Tel Aviv, Israel, Monday.com (MNDY) offers a cloud-based business operating system that enables teams to manage projects, collaborate and automate work processes. The platform is designed to be scalable and to serve different departments and industries. MNDY currently has a market capitalization of $11 billion.
Monday.com stock is by 21.3% compared to the beginning of the year.
KeyBanc says it believes Monday.com is on an efficient growth path, driven by price tailwinds.
Broadly speaking, analysts have a “Strong Buy” rating on MNDY, with a mean price target of $239.43 – indicating a roughly 5% upside potential from current levels. Out of 16 analysts covering the stock, 12 have a “Strong Buy” rating, 2 have a “Moderate Buy” rating and 2 have a “Hold” rating.
Software Stock #3: Microsoft
Perhaps one of the most active tech titans in the field of artificial intelligence, Microsoft (MSFT) hardly needs an introduction. Founded in 1975, Microsoft is a multinational technology corporation with a wide range of products and services, including operating systems, productivity software, cloud computing, consumer products and business solutions. It is currently the most valuable public company in the world, with a whopping market capitalization of $3.19 trillion.
Shares of MSFT rose 12.5% based on the beginning of the year.
KeyBanco’s optimism about Microsoft stems from the fact that the company has multiple methods to monetize artificial intelligence.
Overall, analysts have a “Strong Buy” rating on MSFT stock, with an average target price of $446.35. This indicates an upside potential of around 5.5% from current levels. Out of 37 analysts covering the stock, 33 have a “Strong Buy” rating, 3 have a “Moderate Buy” rating and 1 has a “Hold” rating.
Stock Software #4: ServiceNow
Founded in 2003, ServiceNow (NOW) is a cloud-based software company that provides a digital workflow management platform for business operations. Their platform helps companies automate tasks, improve efficiency and simplify IT service management. NOW currently has a market capitalization of $158.7 billion.
ServiceNow inventory it grew by 9.2% based on the beginning of the year.
ServiceNow’s AI monetization capabilities, along with your own “growth drivers outside of that mega-trend,” KeyBanc highlighted as the key drivers behind its “Overweight” rating.
Overall, analysts have a “Strong Buy” rating on NOW stock, with an average price target of $795.58 – indicating a roughly 3% upside potential from current levels. However, its highest price target of $1,000 indicates a potential upside of 29.7% from current levels. Out of 33 analysts covering the stock, 29 have a “Strong Buy” rating, 2 have a “Moderate Buy” rating and 2 have a “Hold” rating.
Stock Software #5: SAP
We conclude our list with the German technology giant SAP (SAP), The most important name in Europe in business application software. Its key offerings include enterprise resource planning (ERP), customer relationship management (CRM), database management, cloud solutions and experience management.
With a current market capitalization of $230.4 billion, SAP shares rose 26.8% on a YTD basis.
KeyBanc cited the company’s free cash flow generation and its move to the cloud as key drivers expected to boost SAP’s share price.
Analysts have a “Strong Buy” consensus rating on SAP stock, although the stock is trading almost flat with the group’s median price target of $196.20. However, the highest price target of $230 indicates upside potential of around 17.3% from current levels. Out of 15 analysts covering the stock, 11 have a “Strong Buy” rating, 1 have a “Moderate Buy” rating and 3 have a “Hold” rating.
As of the date of publication, Pathikrit Bose had no position (either directly or indirectly) in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. For more information, see Barchart’s Disclosure Policy here.
The views and opinions expressed herein are those of the authors and do not necessarily reflect those of Nasdaq, Inc.