We recently compiled a list of the 10 AI Stocks That Could Go Parabolic According to Financial Media. In this article, we are going to take a look at where Rubrik, Inc. (NYSE:RBRK) stands against the other AI stocks.One of the primary growth drivers in the AI industry over the past few years has been the exponential increase in data generation. The rise of the Internet of Things (IoT), social media, e-commerce, and various digital platforms has led to an unprecedented surge in data production. This vast amount of data serves as the fuel for AI systems, particularly in the development of machine learning models. Clive Humby, a venture capitalist, emphasized the critical role of data in AI development by famously proclaiming that data is the new oil. The ability to collect, process, and analyze large datasets allows AI algorithms to improve accuracy and deliver more sophisticated outputs.
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Read more about these developments by accessing 33 Most Important AI Companies You Should Pay Attention To and 20 Industrial Stocks Already Riding the AI Wave.
To understand the AI revolution, it is also important to understand advancements in computing power. Moore’s Law, which predicts the doubling of transistors on a microchip approximately every two years, has played a crucial role in enhancing the processing power available for AI applications – consider companies like Taiwan Semiconductor Manufacturing and their advanced node processing. The advent of Graphics Processing Units (GPUs) and Tensor Processing Units (TPUs) – like the ones made popular by NVIDIA – has further accelerated AI development by enabling faster computation and more complex model training. Ray Dalio, founder of Bridgewater Associates, one of the largest hedge funds globally, says that these improvements in hardware have been a game-changer for AI.
The availability of massive investments in AI research and startups is also a key growth driver. According to a report by PwC, global investments in AI are expected to reach $15.7 trillion by 2030, with the technology contributing $6.6 trillion to GDP from increased productivity and $9.1 trillion from consumption effects. This influx of capital is spurring innovation and the commercialization of AI technologies across various sectors, from healthcare to finance. Prominent hedge fund managers are also taking note. Ken Griffin, the chief of Citadel Investment Group, says that AI is the most transformative technology of our time, and not just another bubble, but a structural shift in the economy.
Read more about these developments by accessing Billionaire Stan Druckenmiller Is Betting On AI Infrastructure, Tobacco and Industrial Stocks and 10 Tech Stocks to Monitor Amid Market Volatility According to Bernstein Analyst..
Our Methodology
For this article, we selected AI stocks that have explosive growth potential according to financial news outlets. These stocks are also popular among hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A cybersecurity expert monitoring the security of the company’s assets, emphasizing the importance of data protection.
Rubrik, Inc. (NYSE:RBRK)
Number of Hedge Fund Holders: 28
Rubrik, Inc. (NYSE:RBRK) provides data security solutions to individuals and businesses worldwide. The company offers enterprise data protection, unstructured data protection, cloud data protection, and SaaS data protection solutions. These protections are important across the board because large firms manage their business data through a range of different software offerings. The cybersecurity platform of the firm uses AI and machine learning to monitor for threats and provide sophisticated data recovery. The recent global software outage, caused by problems at CrowdStrike, has increased the spotlight on Rubrik. Microsoft, Atlassian, and Cisco are some of the prominent customers of the firm.
Rubrik, Inc. (NYSE:RBRK) has enormous growth potential and analysts on Wall Street have recognized this. Piper Sandler recently initiated coverage of the stock with an Overweight rating and $42 price target, terming the stock one of the top investment ideas. In an investor note, the advisory noted that next-generation vendors were replacing legacy vendors, and tailwinds like ransomware, artificial intelligence and backup-as-a-service were driving shifts to vendors like Rubrik. The advisory sees the company growing 20% per year sustainably.
Overall RBRK ranks 8th on our list of the AI stocks that could go parabolic according to financial media. While we acknowledge the potential of RBRK as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than RBRK but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock