The juggernaut of artificial intelligence (AI) has been impossible to ignore for market participants. Having contributed immensely to the overall upside in markets over the better part of two years now, the AI megatrend is rippling out through multiple industries. Estimated to reach a market size of $2.58 trillion by 2032, investors have been pouring in huge sums of capital to benefit from the upside in AI stocks.
Hidden Gems in the AI Sector
But which AI stocks are worth adding to your portfolio at this phase in the cycle? With established giants like Nvidia (NVDA), Microsoft (MSFT), and Amazon (AMZN) already sharply higher on AI enthusiasm, here are 6 relatively overlooked stocks that brokerage firm Morgan Stanley (MS) considers high conviction picks with opportunities for productivity and efficiency gains, thanks to AI.
Recursion Pharmaceuticals: Unveiling Novel Drug Discoveries
We start with Recursion Pharmaceuticals (RXRX), a holding of maverick investor Cathie Wood. Utah-based Recursion Pharma is a clinical-stage biotechnology company. They use a combination of automation, AI, and machine learning to discover new drugs, aiming to develop new treatments for various diseases. With a market cap of $2.1 billion, RXRX stock shows potential for growth despite being down 11.4% YTD.
Schrodinger: Revolutionizing Healthcare Technology
Founded in 2002, Schrodinger (SDGR) is a healthcare technology company based in New York City. It provides chemical simulation software solutions primarily to the pharmaceutical industry, aiding in drug discovery. Despite being down 23.5% YTD, SDGR shows promise with a market cap of $2.06 billion.
Definitive Healthcare: Insights into the Healthcare Provider Market
Founded in 2011, Definitive Healthcare (DH) is a data analytics company in the healthcare sector. DH’s products provide insights that help companies find potential customers and understand healthcare trends. With a market cap of $925 million, DH stock, despite a 20.9% downturn YTD, remains a “Moderate Buy” according to analysts.
Roblox: Empowering Online Entertainment Creation
Roblox (RBLX) was founded in 2004 in Redwood City, Calif., offering a platform for user-generated online games. RBLX stock, with a market cap of $22 billion, presents an upside potential despite a 12.2% dip YTD. Analysts rate it as a “Moderate Buy” with a mean target price of $48.55.
Sportradar Group: Innovating Global Sports Technology
Swiss company Sportradar Group (SRAD) is a global technology firm focusing on sports engagement. Providing various services in sports data and entertainment, SRAD stock, up 5% YTD, boasts a market cap of $12.9 billion and is considered a “Moderate Buy” by analysts.
S&P Global: A Cornerstone in Financial Information
We end our list with S&P Global (SPGI), a market ratings and financial information giant founded in 1860. With a market cap of $139.3 billion, SPGI stock is down 2.7% YTD but up 26.5% over the past year. Analysts have a consensus “Strong Buy” rating for SPGI, with an expected upside potential of about 11.6%.