After failing to capitalize on the AI (Artificial Intelligence)-powered rally in Nvidia (NASDAQ:NVDA) stock, popular hedge fund manager Cathie Wood recommends alternative AI bets. Speaking at an investor conference in Munich, Wood emphasized that there are more promising opportunities in the AI space, as reported by Bloomberg.
In January, Wood’s Ark Innovation ETF (ARKK) cut its holdings in Nvidia stock, thereby missing out on the remarkable upswing in its value. Wood perceives Nvidia’s valuation as expensive and suggests exploring companies that have largely remained off the mainstream radar.
Wood recommends investing in UiPath (NYSE:PATH) and Twilio (NYSE:TWLO) instead of Nvidia to capitalize on the AI boom.
While Wood holds an optimistic outlook on PATH and TWLO stocks, let’s delve into the recommendations of Wall Street analysts to find out what’s ahead for these companies.
What is the Future of UiPath Stock?
UiPath stock has gained over 28% year-to-date, benefitting from the implementation of its new go-to-market approach aimed at enhancing productivity, promoting the platform, and focusing on customers who offer enduring growth prospects. Thanks to its fresh approach, its customers with $1 million or more in ARR (annual recurring revenue) increased more than 30% year-over-year to 254 in Q2.
UiPath’s management remains upbeat and expects Generative AI to be a tailwind to its business. However, BMO Capital analyst Keith Bachman expects PATH stock to stay range-bound due to the “issues of the longer-term impact of GenAI” and increased competition from Microsoft (NASDAQ:MSFT). Bachman reiterated a Hold on UiPath stock on September 7.
UiPath stock has four Buy and eight Hold recommendations for a Moderate Consensus rating on TipRanks. Analysts’ average price target of $19.50 implies 19.71% upside potential from current levels.
What is the Forecast for Twilio Stock?
Twilio stock is up about 20% year-to-date as investors cheered its efforts to reaccelerate growth in the Data and Applications business, cut back losses, and make advancements toward its path to profitability. Further, the company’s CEO, Jeff Lawson, remains optimistic about AI’s potential and views AI as “an accelerant for Twilio’s vision.”
Echoing similar sentiments, HSBC analyst Stephen Bersey sees promise from AI. However, Bersey imitated coverage on TWLO stock with a Hold recommendation on September 15. While he expects TWLO to be a beneficiary of AI, the uncertainty regarding the demand for cloud and digital transformation keeps the analyst sidelined.
TWLO stock has received eight Buy, 12 Hold, and two Sell recommendations for a Moderate Buy consensus rating. Analysts’ average price target of $67.65 implies 15.6% upside potential from current levels.
