AI Stocks to Watch This Week

Today, artificial intelligence is expanding its use across various industries, from healthcare to finance. With advancements in AI technology, companies are experiencing huge growth attracting investors. Several AI stocks are making waves in the stock market with their performance and innovative technology. Here, we explore the top AI stocks to watch this week.

TCS, India's largest software exporter, has made significant strides in the AI ​​space with the launch of TCS Studio, which aims to drive data-driven business decisions, transformation and innovation. TCS has also trained over 100,000 employees in AI-related technologies, demonstrating its commitment to integrating AI into its operations.

Stock Performance: The company's stock price is currently trading above its short, medium and long term moving averages and is near its 52-week high. Brokerages have upgraded the stock over the past three months. TCS is debt-free and has seen rising investment from foreign portfolio investors (FPIs). However, the company's profit margins are under pressure.

Infosys, India's second-largest software exporter, is making strategic moves to capture the AI ​​market through initiatives such as its AI solutions suite, Topaz. Though the company has not disclosed specific AI revenue forecasts, it is clear that it is committed to AI.

Stock Performance: Infosys shares are trading above its short, medium and long term moving averages and is nearing its 52-week high. The company's shares have exhibited a positive breakout above the first resistance level, earning it upgrades from brokerage firms.

Wipro has trained over 210,000 employees in AI-based skills, and CEO Thierry Delaporte highlighted that all business units are working on launching new AI services, such as its FullStride Cloud business, which is leveraging generative AI to improve digital workplace services.

Stock Performance: Wipro's share price is trading above its short, medium and long term moving averages, attracting interest from FPIs. Though the company has no promoter collateral and low debt, profit margins are under pressure.

HCL Technologies offers the AI ​​Lab as part of its Cloud Native Labs and is focused on building strategic partnerships to make AI a reality. The company is working with Amazon Web Services to accelerate the adoption of generative AI on a global scale.

Stock Performance: HCL Technologies has very little debt, its stock price is trading near its 52-week high and above its short, medium and long-term moving averages. Book value per share has been improving over the past two years and with upgrades by brokerages, the stock is showing a favorable breakout above the first resistance levels.

Tata Elxsi, another company in the Tata group, is a leader in AI offering products such as AI-based video analytics, AI DMS, customer experience management services and smart annotation services.

Stock Performance: The stock has been under pressure and has received several upgrades from brokerages even as it has fallen negatively from the third support level. The company has seen improving return on equity over the last two years, has zero promoter pledges and is debt-free.

It has launched several AI platforms and solutions, including Sayint (speech analytics), Populii (annotation and workflow tool), and GAiA (end-to-end CX for building an AI ecosystem).

Stock Performance: The stock has low debt and no promoter collateral. It is above short, medium and long term moving averages and close to its 52-week high, indicating a positive breakout above the first resistance level as per the brokerage's upgrade.

Kellton Tech Solutions focuses on generative and conversational AI-based solutions. The company has opened an AI-focused Kverse Customer Experience Centre and Innovation Lab in Gurgaon.

Stock Performance: The company has low debt and FPI investments are on the rise. The company's share price has recently seen its biggest recovery from 52-week lows. While the low PE ratio makes it attractive, rising promoter share pledge is a concern.

Saksoft offers end-to-end AI-based services including data mining, ML development, computer vision and sentiment analysis powered by NLP.

Stock Performance: The stock is under pressure with the moving average convergence/divergence indicator below its signal line, but it has made the strongest recovery from its 52-week low, has zero promoter pledges and no debt on its books.

Subex focuses on AI solutions for telcos, using advanced machine learning and deep learning algorithms to predict network growth and detect fraudulent activities.

Stock Performance: The stock has a low price-to-earnings ratio, which indicates potential value. The company is debt-free and has attracted interest from FPIs. However, the decline in ROE and RoCE over the past two years and financial pressures are a warning sign.

Happiest Minds Technologies offers solutions that combine augmented intelligence with emerging technologies such as natural language processing, image analysis, video analytics, AR and VR.

Stock Performance: The company's share price has been on a downward trend due to rising promoter investment and falling mutual fund holdings, and is below its short, medium and long term averages. However, the company's strong financial position is a positive factor.

Carefully analyze the company's balance sheet and cash flow statement. AI requires significant investment, and well-funded companies are in a better position to sustain and grow their AI initiatives.

Ensure that your company has a diverse customer base willing to invest in AI solutions, which will enable your company to build a strong AI talent base and maintain a steady revenue stream.

Evaluate company stock valuations and other technical indicators such as moving averages, support and resistance levels to make informed investment decisions.

Look for companies that have strategic partnerships with established AI companies and collaborations with research institutes and universities. Such partnerships can strengthen a company's AI capabilities and market reach.

Companies with deep pockets who acquire smaller AI startups can gain a competitive advantage by integrating innovative technologies and expanding their market presence.

Companies in this segment offer AI solutions such as data analytics, predictive analytics, natural language processing, and image recognition, helping machines learn through deep learning algorithms.

NLP companies specialize in language-related things like chatbots, voice assistants, and language translation to enhance human-computer interaction.

This segment includes companies that manufacture AI components such as graphics processing units (GPUs), tensor processing units (TPUs), and AI-enhanced chips that are essential for fast AI processing.

These companies provide the software and platforms that enable businesses to build and deploy their own AI applications, providing the backbone for a range of AI solutions.

This segment develops and deploys technologies used to improve efficiency and productivity in industries such as manufacturing and healthcare.

IoT companies focus on connected devices that collect and exchange data, with AI analysing this data to provide insights that can help improve products and services.

To be in a position to buy AI business stocks, there is a huge opportunity as the AI ​​market is bound to grow. However, before investing, you need to consider several factors to estimate the company's potential such as payment capacity, number of customers, technology coefficient, partnership, merger and acquisition capabilities, etc. For AI practitioners to continue to secure a leading position, you need to keep an eye on the key players that are highlighting the current AI shift, such as TCS, Infosys, Wipro, HCL Technologies, Tata Elxsi, Tech Mahindra, Kellton Tech Solutions, Saksoft, Subex, Happiest Minds Technologies, etc.

The growth of AI stocks is driven by several factors. First, the increasing adoption of AI across various industries is a major factor. AI is being used to optimize processes, improve customer experience, and drive innovation, which is driving demand for AI solutions. Second, advances in AI technologies such as machine learning, natural language processing, and computer vision are continuously expanding the capabilities and applications of AI, making it more valuable. Third, strategic partnerships and collaborations between AI companies and other technology companies, research institutes, and universities are accelerating the development and deployment of AI.

Several AI stocks have shown impressive performance recently and are worthy of attention from investors. Tata Consultancy Services (TCS) stands out for having launched TCS Studio and trained over 100,000 employees in AI-related technologies. The company's shares are above short-, medium- and long-term moving averages and approaching their 52-week highs, reflecting strong market confidence. Infosys, with its AI solutions suite Topaz, also achieved a positive breakout with its shares above key moving averages, earning it an upgrade from the brokerage. Wipro has made impressive progress by training over 210,000 employees in AI skills and integrating AI into its lines of business.

What are the risks associated with investing in AI stocks?

Investing in AI stocks involves several risks. One major risk is that competition within the AI ​​industry is intense. With many companies investing heavily in AI technology, the competitive environment is fierce, which may affect market share and profitability. Another risk is the rapid pace of technological change. AI technology is evolving rapidly, and companies need to continuously innovate to stay competitive. This requires significant investments in research and development, which can strain financial resources.

Partnerships and collaborations play a key role in the success of AI companies by providing access to new technologies, markets, and expertise. Strategic alliances with existing technology giants, research institutes, and universities strengthen AI companies' innovation capabilities and accelerate the development of advanced AI solutions. For example, HCL Technologies' collaboration with Amazon Web Services has accelerated the adoption of generative AI, expanded market reach, and enhanced service offerings.

What makes the AI ​​market attractive to foreign portfolio investors (FPIs)?

The AI ​​market is attracting foreign portfolio investors (FPIs) due to its high growth potential, technological innovations, and huge market opportunity. The AI ​​sector is expected to grow rapidly as businesses across industries increasingly adopt AI solutions to improve efficiency, reduce costs, and drive innovation. This growth potential offers strong investment returns for FPIs. Technological advancements in AI such as machine learning, natural language processing, and computer vision are continuously expanding the scope and applications of AI, making the sector highly dynamic and attractive.