CRWD

If You Can Only Buy One Machine Learning Stock in May, It Better Be One of These 3 Names

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The key to making big in the stock market is spotting multi-year trends early and committing to them for the long haul. Identifying long-term trends isn’t easy, but with machine learning and AI, it’s the unmistakable elephant in the room. These technologies have dominated headlines, taking the stock market to unprecedented heights last year. Hence, betting on machine learning stocks to buy is a no-brainer for any investor looking to take their portfolio to the next level.

With monstrous gains realized in machine learning stocks last year, many had felt the best days were behind them. However, those concerns are overblown, especially considering the pervasiveness of AI and machine learning across virtually every industry. These technologies will lead to massive productivity and efficiency gains for companies, helping them add tremendous value for their customers and shareholders. Not every machine learning stock is made the same, so it is best to separate the wheat from the chaff.

Top Machine Learning Stocks: CrowdStrike (CRWD)

A sign with the Crowdstrike (CRWD) company logo

Source: VDB Photos / Shutterstock.com

CrowdStrike (NASDAQ:CRWD) is a top-tier cybersecurity firm leveraging machine learning to enhance its robust cybersecurity capabilities. Its popular Falcon platform uses machine learning algorithms to detect and respond to threats in real time. Having analyzed a colossal amount of data over the years, the Falcon platform’s machine-learning capabilities have skyrocketed.

Consequently, CRWD has one of the most successful companies in its niche, with an excellent track record of top-and-bottom-line beats. Moreover, it recently posted another blow-out result in its first-quarter (Q1), with revenues surging $845.4 million, a 33% bump on a year-over-year (YOY) basis, beating estimates by $5.4 million. Additionally, it posted an EPS of 95 cents, beating estimates by 13 cents.  Hence, it has all the momentum behind it, with impressive generative AI features that will take its service quality to another level.

It recently unveiled Charlotte AI, the firm’s security analyst, which offers a small glimpse into AI’s pervasive impact on cybersecurity. Additionally, it announced a partnership with Cloud Czar Amazon (NASDAQ:AMZN) Web Service (AWS) to help with its generative AI endeavors. This machine learning stock is a strong buy.

Baidu (BIDU)

An image of a laptop on a table with the screen showing the red and blue logo for Chinese Internet company

Baidu (NASDAQ:BIDU) is a Chinese tech juggernaut using AI and machine learning to reshape its business. It’s leveraging AI across multiple segments to position itself as a frontrunner in the sector. 

For instance, Baidu’s Ernie large-language model stands out as one of the most advanced in its class, rivaling industry leaders like ChatGPT. The Ernie AI chatbot has north of 200 million users already and is likely to be a growth driver for Baidu. Moreover, you have Baidu’s PaddlePaddle platform, an open-source deep learning framework that supports various AI applications and rivals popular frameworks such as Google’s TensorFlow​​. 

The most promising of its AI initiatives is Baidu AI Cloud, which has become a major growth catalyst for its non-online marketing revenue.  It’s been a key growth driver for its business in recent quarters, offering pre-trained machine learning models covering multiple diverse sectors. 

Another interesting AI-powered project for Baidu is Apollo, its robust autonomous driving technology, which is key to driving its self-driving vehicle initiatives. Additionally, it has plenty of traction following its partnership with Tesla (NASDAQ:TSLA) in deploying robotaxis in China. Needless to say, this venture could become a significant revenue stream for both companies, positioning Baidu as a top secondary-play at the Chinese automotive space.

Palantir (PLTR)

Palantir logo on the smartphone and the company share price on the day of opening the trade October 1, 2020. Palantir valued at $15.8bn in stock market debut. PLTR stock

Source: Ascannio / Shutterstock.com

Palantir’s (NYSE:PLTR) robust Big Data analytics platform is powered by cutting-edge machine learning. This advanced technology empowers both commercial and non-commercial clients to make informed decisions through predictive analytics. The integration of machine learning models in its leading Foundry platform enhances the effectiveness of decision-making, enhancing operational efficiencies.

PLTR stock has been on a tear in the past year, jumping over 70%. The AI hype is a big part of that, but a lot of it is linked to its superb operational performance. It comfortably surpassed revenue estimates in the past three consecutive quarters, led by the rapid growth in its United States commercial segment. In its most recent quarterly earnings print, it posted $634 million in sales, beating consensus estimates by $16.5 million. Moreover, its eight-cent EPS was in line with Wall Street expectations, marking the sixth consecutive quarter of profitability.

Its U.S. commercial segment sales were particularly impressive, with segment-wise net income surging to $150 million, marking a 40% jump on a YOY basis. When excluding sales from strategic contracts, U.S. commercial sales jumped 68% YOY and 22% sequentially. Additionally, at the end of Q1, Palantir had 262 business clients in the U.S., reflecting a 69% rise from the prior-year period. If you are going to buy a machine learning stock, make sure its this one.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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