The machine learning revolution is well underway, and its impact on the global economy will be profound. From established tech giants to emerging specialists, we’ll explore the best opportunities to maximize returns in the age of AI.
Key Takeaways:
- Machine learning is experiencing explosive growth, fueled by increasing data volumes, improved computing power, and enterprise adoption.
- Nvidia, ServiceNow, CrowdStrike, Snowflake, and Palantir are well-positioned to benefit from this trend, offering a range of products and services that underpin the AI ecosystem.
- The potential impact of machine learning on various industries is significant, and the companies driving this technology forward are worth watching closely.
What is Machine Learning?
Machine learning is a branch of artificial intelligence (AI) that enables computers to learn and improve from experience without being explicitly programmed. It uses algorithms and statistical models to analyze and interpret patterns in data, allowing systems to make decisions and predictions with minimal human intervention.
Key aspects of machine learning:
- Data-driven: Relies on large datasets to train models
- Adaptive: Improves performance as it processes more data
- Automated: Reduces the need for manual programming
- Predictive: Makes informed decisions based on patterns
Common applications:
- Image and speech recognition
- Natural language processing
- Recommendation systems
- Fraud detection
- Autonomous vehicles
Machine learning is transforming industries like healthcare, finance, and technology, driving innovation and efficiency across various sectors.
Machine Learning Market Growth:
- The market size is projected to reach $79.29 billion in 2024, growing at an annual rate of over 18.7% from 2023 to 2030. statista
- The market size of Machine Learning will grow from $26.03 billion in 2023 to $225.91 billion by 2030, exhibiting a CAGR of 36.2%. fortunebusinessinsights
- The global machine learning market size was valued at $36.73 billion in 2022 and is expected to grow at a CAGR of 34.8% from 2023 to 2030 to reach $419.94 billion by 2030. grandviewresearch
- The market size of Machine Learning was valued at $19.45 billion in 2022 and is projected to reach $188.34 billion by 2030, growing at a CAGR of 37.47%. kingsresearch
Performance Comparison of Top Machine Learning Stocks
| Company | 1-Year Return | Key Machine Learning Application |
|---|---|---|
| Nvidia | +215.1% | AI Computing and Autonomous Vehicles |
| ServiceNow | +82.0% | Enterprise Workflow Automation |
| CrowdStrike Holdings | +176.2% | Cybersecurity and Threat Detection |
| Snowflake | +25.1% | Cloud Data Analytics and Machine Learning |
| Palantir Technologies | +167.4% | Data Integration and Analytics for Government and Enterprise |
Top 5 Machine Learning Stocks to Watch in 2024
The companies we have listed are based on hedge fund interest, using data from Insider Monkey’s Q1 2024 report.
| No. | Company | Ticker | Overview |
|---|---|---|---|
| 1 | Nvidia | NASDAQ:NVDA | A leading provider of graphics processing units (GPUs) that power machine learning applications, with a strong presence in data centers and automotive industries. |
| 2 | ServiceNow | NYSE:NOW | Enterprise cloud computing company offering a range of machine learning-powered solutions for IT, customer service, security, and workflow management. |
| 3 | CrowdStrike Holdings | NASDAQ:CRWD | Cybersecurity leader utilizing machine learning to detect and prevent advanced threats, with a focus on endpoint protection. |
| 4 | Snowflake | NYSE:SNOW | Cloud data warehousing company providing a data platform that enables data scientists and business analysts to build machine learning models and derive insights. |
| 5 | Palantir Technologies | NYSE:PLTR | A software company specializing in big data analytics and AI, offering platforms that integrate and analyze diverse data sets for enterprises and governments. |
1. Nvidia (NASDAQ: NVDA)
Number of Hedge Fund Holders (Q1 2024): 186
Nvidia is a leading provider of graphics processing units (GPUs), which are essential hardware components for training ML models. The company’s GPUs offer massive parallel processing power, making them ideal for handling complex ML computations.
Nvidia’s products are used in data centers and supercomputers to accelerate ML training and inference processes. They are also leveraged in autonomous vehicles, robotics, and healthcare imaging applications, among others.
According to insidermonkey, Impax Asset Management, led by Ian Simm, holds 4.86 million shares of Nvidia (NASDAQ: NVDA), valued at approximately $599.88 million.
NVIDIA reported a record $22.6 billion in first-quarter fiscal 2025 revenue, a 23% increase from the previous quarter and a 427% rise from last year. They launched the NVIDIA Blackwell platform for AI computing and the Blackwell-powered DGX SuperPOD™ for generative AI supercomputing.
Additional announcements included NVIDIA Quantum, NVIDIA Spectrum™ X800 switches, and NVIDIA AI Enterprise 5.0. NVIDIA also revealed collaborations with AWS, Google Cloud, Microsoft, Oracle, and Johnson & Johnson MedTech to enhance AI innovation and capabilities across various sectors.
According to Wall Street Analyst on NVDA stock. Of the 62 analysts following the stock, 47 give it a Buy and 6 has it at Hold.
Why We Picked Nvidia:
Nvidia has established itself as a leader in graphics processing units (GPUs), which are essential for training and deploying machine learning models. The company’s data center business powers some of the world’s largest cloud service providers, and its automotive business is poised for significant growth in autonomous driving technology. Nvidia’s strong market position, brand recognition, and broad portfolio of customers made it a clear choice for this list.
2. ServiceNow (NYSE: NOW)
Number of Hedge Fund Holders (Q1 2024): 90
ServiceNow is a cloud-based platform that helps businesses manage digital workflows, including those powered by ML. The company’s platform enables organizations to automate and streamline various processes, improving efficiency and productivity.
ServiceNow’s platform utilizes ML to automate and optimize IT, customer service, security, and business operations. Its virtual agent technology, powered by ML, enhances the user experience and reduces manual effort.
According to insidermonkey, Impax Asset Management, led by Ian Simm, holds 80,406 shares of ServiceNow (NYSE: NOW), valued at approximately $63.25 million.
ServiceNow reported a strong second quarter for 2024, achieving $2.54 billion in subscription revenue, marking a 23% year-over-year increase. The company’s continued growth reflects its robust performance in AI-driven business transformation, with an impressive pipeline generated from its Knowledge event.
ServiceNow’s innovations include the GenAI experience and RaptorDB Lighthouse program, enhancing AI capabilities for enterprise workflows. Strategic partnerships with Microsoft, IBM, and Nvidia, along with new AI integrations, further bolster its technological advancements.
The company also expanded globally, with plans for a UAE Cloud and investments in India and ASEAN. Recognition on the Fortune 500 list and as a leader in multiple Forrester and IDC reports underscores ServiceNow’s significant impact and market leadership in AI and machine learning.
According to Wall Street Analyst on NOW stock. Of the 42 analysts following the stock, 31 give it a Buy, 3 has it at Hold and 1 calls it a Sell.
Why We Picked ServiceNow:
ServiceNow is a leading provider of cloud-based enterprise software that leverages machine learning to automate and streamline workflows. The company has a strong track record of revenue growth and expansion into new markets, with a broad portfolio of enterprise customers. Its open and flexible platform integrates easily with existing systems, and its commitment to continuous innovation in machine learning made it a stand-out choice.
3. CrowdStrike Holdings (NASDAQ: CRWD)
Number of Hedge Fund Holders (Q1 2024): 76
CrowdStrike is a leading cybersecurity company that leverages ML to detect and respond to advanced threats. The company’s cloud-native platform offers endpoint protection, threat intelligence, and response capabilities.
CrowdStrike’s Falcon platform uses ML algorithms to analyze vast amounts of endpoint data, identifying and mitigating potential security threats in real time.
According to insidermonkey, ARK Investment Management, led by Catherine D. Wood, holds 100,433 shares of CrowdStrike Holdings (NASDAQ: CRWD), valued at approximately $38.48 million.
CrowdStrike’s first-quarter fiscal 2025 results demonstrate strong momentum, with a 33% increase in revenue to $921 million and a notable 33% growth in ARR, reaching $3.65 billion. The company’s Falcon platform continues to stand out with its advanced architecture, addressing major cybersecurity and IT challenges.
The financial highlights include a record free cash flow of $322 million and significant operating leverage, driven by robust platform adoption. The Falcon platform’s module adoption rates are also impressive, showing increased integration and utility.
CrowdStrike has expanded its partnerships with major tech players like AWS and Google Cloud, enhancing its offerings in cloud security and managed detection. The company has been recognized as a leader by Forrester, IDC, and KuppingerCole for its innovations in cybersecurity.
According to Wall Street Analyst on CRWD stock. Of the 51 analysts following the stock, 31 give it a Buy, 8 has it at Hold and 2 calls it a Sell.
Why We Picked CrowdStrike Holdings:
CrowdStrike is a cybersecurity leader that leverages machine learning to detect and prevent advanced threats. The company’s next-generation endpoint protection platform, Falcon, utilizes machine learning algorithms to identify and respond to cyberattacks in real time. CrowdStrike’s strong growth in subscription customers and annual recurring revenue, coupled with high-profile customer wins, made it a compelling selection.
4. Snowflake (NYSE: SNOW)
Number of Hedge Fund Holders (Q1 2024): 74
Snowflake is a cloud data warehousing and analytics company that provides a platform for data storage, processing, and analysis. Its unique architecture allows for seamless data sharing and collaboration.
Snowflake’s platform enables data scientists and analysts to easily store, access, and query large datasets, facilitating ML model development and deployment. one company’s platform also integrates with popular ML tools, streamlining the end-to-end ML workflow.
According to insidermonkey, Bailard Inc., led by Thomas Bailard, holds 2,481 shares of Snowflake (NYSE: SNOW) valued at $0.34 million.
Snowflake (NYSE: SNOW) reported robust financial results for the first quarter of fiscal 2025, ending April 30, 2024. Product revenue reached $789.6 million, marking a 34% year-over-year increase. The company also achieved a net revenue retention rate of 128%, reflecting strong customer loyalty and engagement.
Snowflake’s customer base includes 485 customers with trailing 12-month product revenue exceeding $1 million and 709 Forbes Global 2000 customers. The company’s remaining performance obligations surged to $5.0 billion, a 46% year-over-year growth. CEO Sridhar Ramaswamy emphasized the strength of Snowflake’s core business and the growing interest in their AI products, which are designed to enhance AI-powered experiences.
Additionally, Snowflake announced plans to acquire technology assets and key personnel from TruEra, an AI observability platform. This acquisition will enhance Snowflake’s capabilities in evaluating and monitoring large language model applications and machine learning models in production, further strengthening its AI offerings.
According to Wall Street Analyst on SNOW stock. Of the 46 analysts following the stock, 27 give it a Buy, 12 has it at Hold and 2 calls it a Sell.
Why We Picked Snowflake:
Snowflake offers a flexible and scalable cloud data platform, well-suited for machine learning applications. The company’s ability to separate computing and storage allows for independent scaling, making it popular among data scientists and business analysts. Snowflake’s seamless integration with major cloud service providers and its strong growth in revenue and customer base solidified its position on our list.
5. Palantir Technologies (NYSE: PLTR)
Number of Hedge Fund Holders (Q1 2024): 45
Palantir is a software company that provides data integration and analysis solutions, specializing in big data analytics. Its platforms, Gotham and Foundry, enable organizations to derive insights and make data-driven decisions.
Palantir’s platforms utilize ML to process and analyze vast amounts of structured and unstructured data, helping businesses and government agencies make sense of complex information.
According to insidermonkey, ARK Investment Management, led by Catherine D. Wood, holds 13,023,099 shares of Palantir Technologies (NYSE: PLTR), valued at $329.88 million.
Palantir Technologies (NYSE: PLTR) Q2 result 2024, revenue rose 27% year-over-year and 7% quarter-over-quarter to $678 million, driven by a 55% year-over-year increase in US commercial revenue to $159 million and a 24% year-over-year rise in US government revenue to $278 million.
The company closed 27 deals over $10 million, boosting its commercial and government revenues by 33% and 23% year-over-year, respectively. Customer count grew 41% year-over-year to 295, while the US commercial customer base expanded by 83%.
GAAP net income reached $134 million, a 20% margin, with adjusted income from operations hitting $254 million, a 37% margin. EPS surged 500% to $0.06, supported by $4.0 billion in cash reserves and an adjusted free cash flow of $149 million.
According to Wall Street Analyst on PLTR stock. Of the 23 analysts following the stock, 6 give it a Buy, 6 has it at Hold and 7 calls it a Sell.
Why We Picked Palantir Technologies:
Palantir, with its unique data integration and analytics platforms, helps government and commercial customers make sense of complex data landscapes. The company has a strong track record of working with government agencies and is gaining traction in the commercial space. Palantir’s ability to provide advanced data insights using machine learning, coupled with high switching costs and strong customer retention, made it a compelling pick.
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Conclusion
Machine Learning is an incredibly powerful force that is reshaping the world as we know it. With its ability to unlock the potential of data, ML will continue to transform industries and drive innovation on a global scale. As we’ve explored, the applications of ML are vast, and the companies highlighted here represent just a fraction of the businesses leveraging this technology to stay ahead of the curve.
FAQs
1. What is machine learning, and why is it important for investors?
Machine learning is a branch of artificial intelligence that enables computers to learn and improve over time, automatically, without being explicitly programmed. It is important for investors because it is driving significant disruptions and growth across multiple industries, creating new investment opportunities.
2. How are the above companies leveraging machine learning?
- Nvidia: Provides the hardware (GPUs) that powers machine learning applications, with a focus on data centers and autonomous vehicles.
- ServiceNow: Applies machine learning to automate and streamline enterprise workflows, improving operational efficiency.
- CrowdStrike: Utilizes machine learning for advanced threat detection and response, protecting endpoints from cyberattacks.
- Snowflake: Offers a flexible cloud data platform that enables data scientists to build and deploy machine learning models seamlessly.
- Palantir: Integrates and analyzes vast amounts of data using machine learning, providing valuable insights for government and commercial customers.
3. What are the key risks associated with investing in machine learning stocks?
- Competition: The machine learning space is highly competitive, with established players and new entrants vying for market share.
- Economic Conditions: Economic downturns or shifts in spending patterns could impact revenue for these companies.
- Regulatory and Ethical Considerations: Some machine learning applications, particularly in the government and automotive sectors, face regulatory and ethical scrutiny.
4. How can investors assess the potential impact of machine learning on a company’s performance?
Investors should consider the extent to which machine learning is integrated into a company’s products or services. Evaluate the competitive advantage it provides and the potential for improved efficiency, cost reduction, or revenue growth. Also, assess the quality of the company’s data, algorithms, and talent.
5. What are the ethical considerations surrounding machine learning and AI?
Ethical considerations in machine learning and AI primarily revolve around privacy, bias, and autonomy. The collection and use of personal data for machine learning applications must be handled securely and transparently to protect privacy. Bias in data and algorithms can lead to unfair or discriminatory outcomes, requiring careful monitoring and mitigation strategies. Additionally, the increasing automation and decision-making capabilities of AI systems raise questions about accountability and ethical boundaries.
