8 Best AI Stocks to Buy According to Hedge Funds - Don't Miss!

Summary

This video dives into eight lesser-known stocks quietly dominating the AI space, showcasing their unique contributions across various industries. From Perfect Corp.'s AI-driven beauty tech to Lanternix's edge AI for smart infrastructure, these companies are revolutionizing sectors like biotech, national defense, and healthcare. Despite flying under Wall Street's radar, hedge funds are investing heavily in these innovative firms. With a focus on everything from drug discovery to lending automation, the video highlights the potential and profitability of AI-driven businesses, making a compelling case for their future success.

Takeaways

• 😀 Perfect Corporation (PF) is revolutionizing skincare and cosmetics with AI-driven tools for personalized skincare recommendations and virtual try-ons.
• 😀 Lanternix (LTRX) uses industrial IoT and edge AI to enhance the reliability and efficiency of wireless cell towers and telecom networks.
• 😀 Bigbear.ai (BBAI) focuses on AI-powered analytics for critical sectors like defense, government, and logistics, helping organizations make faster, data-driven decisions.
• 😀 Recursion Pharmaceuticals (RXRX) is transforming drug discovery with AI and supercomputing, significantly accelerating molecular predictions and early-stage drug development.
• 😀 Tempest AI (TEM) brings precision medicine to the masses, using AI to interpret genetic data and identify hereditary cancer risks with high accuracy.
• 😀 C3.ai (AI) provides AI-powered predictive maintenance solutions for the US military, including aircraft, ensuring reliability and reducing maintenance costs.
• 😀 Ion Q (IQ) is pushing the boundaries of quantum computing, achieving breakthroughs that could unlock major scientific advancements, such as explaining matter-antimatter imbalance.
• 😀 Upstart Holdings (UPS) is revolutionizing the lending industry by using AI to assess creditworthiness more accurately and automate loan approval processes.
• 😀 Upstart Holdings stands out with an impressive 97.05% gross margin, indicating strong potential for scalability and profitability despite negative earnings per share.
• 😀 Recursion Pharmaceuticals and Tempest AI, though promising in healthcare, are still unprofitable and burning cash due to high R&D costs and early-stage development.
• 😀 Despite their innovative technologies, many of these companies, like C3.ai, Ion Q, and Bigbear.ai, are still scaling towards profitability with high market potential and future breakthroughs.

Q & A

What makes Perfect Corporation's AI technology unique in the beauty industry?

Perfect Corporation uses AI and augmented reality to revolutionize how consumers interact with skincare and cosmetics. Their real-time skin analysis tool, trained on over 70,000 medical-grade images, instantly detects skin issues like fine lines, acne, and dryness. It also offers personalized skincare recommendations, and their AI-powered virtual try-ons for makeup, hairstyles, eyewear, and accessories are highly engaging for both retailers and customers.

How is Lanternix using AI in infrastructure?

Lanternix applies industrial IoT and edge AI to monitor backup power systems at wireless cell towers. Their technology helps reduce manual inspections, cuts operational costs, and improves the reliability of telecom and energy systems, playing a crucial role in smart infrastructure.

What is Bigbear.ai's approach to AI-powered decision intelligence?

Bigbear.ai focuses on providing AI-powered analytics tools for complex environments such as defense, government, and logistics. Their AI models help organizations make fast, data-driven decisions, particularly in high-stakes areas like national security and supply chain management.

How does Recursion Pharmaceuticals utilize AI in drug discovery?

Recursion Pharmaceuticals uses AI and high-performance computing to revolutionize drug discovery. They recently launched an open-source AI model, Boltz 2, that predicts molecular structures and drug interactions much faster than traditional methods. Their Biohive 2 supercomputer, powered by Nvidia GPUs, helps speed up the drug discovery process and reduce costs.

What is Tempest AI's role in healthcare?

Tempest AI uses AI to bring precision medicine to the masses by offering genetic testing to identify hereditary cancer risks. Their care program, developed by Ambry Genetics, was validated as 99.5% accurate, helping to identify high-risk patients for preventive care and simplify genetic testing.

How is C3.AI supporting the US military with AI?

C3.AI builds enterprise-scale AI platforms and has secured a $13 million task order from the US Air Force. Their predictive maintenance system, Panda, helps the Air Force predict equipment failures before they occur, improving aircraft readiness and reducing maintenance costs.

What is Ion Q's breakthrough in quantum computing?

Ion Q has made significant strides in quantum computing, achieving a major breakthrough by simulating a rare physics event called neutrinol double beta decay. This simulation, done using their Ford Enterprise quantum system, could help explain the universe's imbalance between matter and antimatter, showcasing the potential of quantum computing.

What makes Upstart Holdings stand out in the AI-powered lending space?

Upstart Holdings uses AI to assess creditworthiness by analyzing hundreds of variables, rather than just relying on traditional FICO scores. Their platform helps lenders approve more individuals with more accurate risk assessments, offering better rates. Over 90% of the loans facilitated through Upstart are fully automated.

What challenges are Recursion Pharmaceuticals and Tempest AI facing despite their innovations?

Both Recursion Pharmaceuticals and Tempest AI are facing financial challenges, as they operate in research and development-heavy sectors. Recursion is running at a negative margin of -37.97%, and Tempest has a negative EPS of -4.60%, which is common in the biotech and healthcare industries, where upfront costs are high but future returns could be substantial.

Why are hedge funds interested in the AI companies discussed in the video?

Hedge funds are investing in these AI companies because they are solving critical, billion-dollar problems in diverse industries such as beauty, healthcare, infrastructure, and defense. These companies are using cutting-edge AI technology to create scalable solutions with significant growth potential, making them attractive investments for the future.