We recently compiled a list of the 11 Trending AI Stocks on Latest News and Ratings. In this article, we are going to take a look at where Autodesk, Inc. (NASDAQ:ADSK) stands against the other AI stocks.
The rise of artificial intelligence (AI) is driving significant growth in the data center market. Analysts predict that the demand for data center capacity to support AI workloads will increase significantly due to factors like growing computing power requirements. The need to process large amounts of data and the growing adoption of AI applications across various industries should accelerate the growth.
Likewise, Fortune Business Insights expects the data center market to grow at a Compound Annual Growth Rate (CAGR) of 25.7% between 2024 and 2032. The growth comes as companies and nations prepare a massive capital deployment of $1.8 trillion from 2024 to 2030 to meet the growing demand for computing power worldwide.
The US is one of the countries spearheading the data center investment spree. As part of the Stargate project, the US is poised to play host to a $500 billion investment into data centers, which is expected to bolster the country’s computing capacity to boost AI development. The first $100 billion investment is expected to come up this year.
The Stargate project is expected to give the US a strategic advantage and create thousands of jobs.
“As for the 100,000 jobs the project is supposed to create? Some construction jobs will be created as the data centers are built, but many more (millions more) will be created as the data centers come online. We’ve never had a compute cloud like this—there’s literally no way to calculate the economic impact of this amount of AI compute. It will be massive,” said Shelly Palmer, a tech pundit and consultant,
Amid the investment spree, there are growing concerns over a potential oversupply of data center capacity despite the ever-growing needs as part of the AI boom. Reports that Microsoft is canceling leases for US data center capacity are raising concerns about whether tech giants have secured more AI computing capacity than they needed. The software giant has already canceled data center leases totaling hundreds of megawatts, signaling it could have more capacity in its pipeline than it needs.
According to the Kyndryl AI Readiness Report, 86% of leaders are confident in their AI implementation, but 36% cite ROI as a barrier to adoption. Data centers, the core of the digital economy, support various demanding workloads, emphasizing the need for low-latency, high-bandwidth environments for AI applications. The time to invest is now.
Story Continues
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 in Q4 2024.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Autodesk (ADSK) Gains Analyst Support as AI and Cloud Investments Fuel Future Growth
A software engineer using AutoCAD Civil 3D to create a 3D design in a modern office setting.
Number of Hedge Fund Holders: 74
Autodesk, Inc. (NASDAQ:ADSK) is a company that develops software for 3D design, engineering, and entertainment. Professionals in many industries use its software, including architecture, construction, manufacturing, and media and entertainment. The company also utilizes Artificial Intelligence (AI) within its software, allowing users to input design constraints and have AI generate multiple optimized design options. On February 27, the company delivered solid fourth quarter and full year 2024 results and announced it is embarking on a restructuring plan.
Autodesk, Inc. (NASDAQ:ADSK) posted a 12% increase in revenue which amounted to $1.64 billion in Q4 as net income from operations increased to $608 million. Autodesk also announced plans to trim its workforce by 9% or approximately 1,350. The layoff comes as Autodesk remains focused on the convergence of design and integration of artificial intelligence solutions on the cloud.
“We are reallocating internal resources toward these critical areas and beginning the optimization of our go-to-market functions to better meet the evolving needs of our customers and channel partners,” said Autodesk president and CEO Andrew Anagnost. “We expect consistent growth momentum and disciplined execution, reinforced by persistent share repurchases, to deliver sustainable shareholder value over many years.”
Overall ADSK ranks 3rd on our list of the trending AI stocks. While we acknowledge the potential of ADSK as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ADSK but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.
