We recently compiled a list of the 11 AI Stocks That Should Be On Your Watchlist.In this article, we are going to take a look at where Reddit, Inc. (NYSE:RDDT) stands against the other AI stocks.
With only a few days in, President Donald Trump's administration has been making significant strides in advancing artificial intelligence technology. Reuters reported on Tuesday that he has announced a private sector investment of up to $500 billion to fund infrastructure for artificial intelligence, aiming to outperform rival nations in the critical technology.
In this regard, Trump has also emphasized the importance of keeping the technology within the country.
"What we want to do is we want to keep it in this country. China is a competitor, and others are competitors... It's technology and artificial intelligence all made in the USA”.
According to Trump, ChatGPT's creator OpenAI, SoftBank, and Oracle, are planning a joint venture called Stargate. The venture is expected to build data centers and create more than 100,000 jobs in the United States. With other equity backers, these companies have committed $100 billion for immediate deployment. Meanwhile, the remaining investment will occur over the next four years.
Following the news, global shares rose today, January 22nd, driven by a rise in technology stocks. Even though the global market is near record highs, investors are optimistic that they may rise even further.
"We prefer taking risk in stocks and expect corporate earnings to keep driving returns as the fourth-quarter reporting season starts”.
He also noted that Treasury yields might jump.
"We are in a world of higher interest rates and expect them to stay above pre-pandemic levels. Even with the jump in yields, we still see more room to run, if at a slower pace”.
Speaking of the Stargate initiative, OpenAI's Sam Altman is also thrilled that they get “to do this in the United States of America”. He thinks this is going to be the most important project of this era. Moreover, according to multiple news sources, the move may signal that the Trump administration will be striving to work with some tech companies.
After all, the President has been proactive in advancing AI technology. One of the first moves that he took returning to office has been to revoke a Biden-era executive order regarding AI guardrails. Overall, spending and focus on artificial intelligence in the US is in full swing. Billionaire businessman Hussain Sajwani also pledged to spend $20 billion or more on AI data centers in the U.S. earlier this month.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. 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 content marketing website showing the audience reach of the company's products.
Reddit Inc (NYSE:RDDT) is an American social news aggregation, content rating, and forum social network. The company’s primary business model leverages its vast content archive to license data for training artificial intelligence models. On January 21, Raymond James raised the firm’s price target on Reddit to $200 from $150 and kept a “Strong Buy” rating on the shares. The rating has been issued as the firm is largely bullish on the Internet sector. Analysts told investors in a research note that the year ahead is important for the growth and use of generative AI in businesses.
Back in November, Reddit Chief Operating Officer Jen Wong told CNBC that the company is looking to expand its advertising business and attract more users outside its core US market. In this regard, analysts at Raymond James highlighted that the company’s use of AI to automatically translate its site text to different languages “should help improve local search rankings for Reddit and provide durable hypergrowth”. In this regard, Wong noted that Reddit’s AI translation efforts are key to its international expansion. The analysts also said that Reddit continues to be one of the top five most searched websites. Its “authentic and uniquely moderated (community system) content” will help the company stay on top of search results, ultimately resulting in more Reddit users creating accounts, the analysts wrote.
Overall RDDT ranks 5th on our list of the AI stocks that should be on your watchlist. While we acknowledge the potential of RDDT 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 RDDT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
