Facebook and Micron are among the favorite ways to play the boom in artificial intelligence, according to top technology analysts.
The analysts were identified by looking at the average return of their recommendations and their success rate in those calls, as tracked by TipRanks, a Wall Street analyst database.
Here are five favorite AI stocks recommended by the best-performing technology analysts.
1) Microsoft (MSFT)
In 2017, Microsoft changed its strategy from a "mobile-first and cloud-first world" to "an intelligent cloud and an intelligent edge infused with AI." And this strategy shift seems to be paying off. The company is now one of the leaders in AI, and has just teamed up withl Amazon to offer developers new tools to develop and share open source AI software.
In the last three months, 13 top analysts have published buy ratings on Microsoft shares, versus just one hold rating.
One bullish analyst is Oppenheimer's Timothy Horan. Following strong earnings results for the quarter, he assigned a buy rating to Microsoft on October 26. He also raised his price target to $92, from $80.
"Microsoft is focused on embedding all products and services with AI capabilities. Microsoft has proven it can execute on its hybrid cloud strategy, and we expect accelerating growth on both the top and bottom lines," says Horan. The analyst has a proven track record on Microsoft with a 100 percent success rate and 25 percent average return across his 11 Microsoft ratings.
2) Yext (YEXT)
Yext is a fast-growing tech company that makes it possible for restaurants, banks, doctors, and other businesses to centrally control online data in near real time. On November 5, KeyBanc analyst Brent Bracelin assigned a buy rating to Yext with a $16 price target. Given that the stock is currently trading at just $12, this suggests upside of 33 percent for the next 12 months.
Voice search and AI are underappreciated positive factors "that could sustain high revenue growth for Yext in excess of 30 percent for an extended period of time, in our view," the analyst said.
Overall, this 'Strong Buy' stock has received three recent buy ratings from top-ranked analysts. With shares down 20 percent, the risk/ reward appears increasingly compelling say analysts. TipRanks shows that the average analyst price target of $17 suggests potential gains of over 40 percent from the current share price.
3) Facebook (FB)
Social media giant Facebook says it "wants to solve AI." The company boasts an impressive AI research team led by deep learning pioneer Yann LeCun and has listed AI as one of its major initiatives for 2018.
In the last three months, FB has received 29 buy ratings from analysts and only two bearish ratings. The average price target from these analysts is $207, which suggests big upside potential of 15 percent from the current price.