The artificial intelligence boom has propelled industry behemoths like Meta Platforms, Alphabet, Tesla and Adobe onto this list of top-rated AI stocks and others to have on your watchlist. META, TSLA, ADBE and Google stock and the others shown here all hail from today's Top 20 industry groups.
Each company is also outpacing at least 95% of all stocks in terms of key stock-picking factors.
In a further sign of this blossoming AI lovefest, Meta, Tesla, Alphabet and a slew of other AI stocks also made this month's list of new buys by the best mutual funds. That institutional demand has lifted Google stock into a buy zone as META stock climbs beyond its latest buy range. Tesla stock is trying to recharge and get back above its 50-day moving average.
Other watchlist-worthy, highly rated stocks tapping into the AI zeitgeist include Dropbox, Airbnb, MakeMyTrip, Super Micro Computer, Applied Materials and KLA, which is expanding the boundaries of artificial intelligence.
Both Airbnb and MakeMyTrip, which is collaborating with Microsoft on generative AI, have established footholds in the AI space. MakeMyTrip has booked a new breakout, while ABNB stock looks to reserve a space back above its 50-day line. KLA and DBX stock have both climbed beyond buy range from their most recent breakouts.
AMAT stock is also extended but has retreated to test support at its 10-week line. SMCI stock short-circuited after its Aug. 8 earnings report, gapping down below its 50-day moving average.
Meta Stock, Tesla, Google Generate Spot Among Top AI Names
To make this screen of top stocks to watch in the top-ranked industries, each company must meet the following criteria:
- Industry group rank: between 1 and 20 (on IBD's 197 industries list).
- Composite Rating: 95 or higher.
- EPS Rating: 80 or higher.
- Relative Strength Rating: 80 or higher.
- SMR Rating: A or B.
- Accumulation/Distribution Rating: A or B.
- Current share price: $12 or more.
- 50-day average volume: 400,000 shares or more.
Including Meta stock, Airbnb, Adobe, Dropbox and MakeMyTrip, several names on this stock screen earn the highest-possible 99 Composite Rating. Google stock earns a near-perfect 98 rating, while Tesla stock is not far behind with a 97.
Ratings, or course, can change as stocks run into trouble. Airbnb, for example, is likely due for an adjustment as it continues to slide after reporting earnings on Aug. 3.
Scan the list below and click the symbols to check the stock chart for any bases and buy zones.
Best AI Stocks And More In The Top-Ranked Industries
| Company | Symbol | Comp Rating | EPS Est Cur Yr % | EPS Rating | RS Rating | SMR Rating | A/D Rating |
|---|---|---|---|---|---|---|---|
| Airbnb | 99 | 14 | 80 | 89 | A | B- | |
| Adobe | 99 | 16 | 96 | 96 | A | A | |
| Ceridian HCM | 99 | 61 | 96 | 85 | B | B | |
| Dropbox | 99 | 20 | 98 | 88 | A | A- | |
| Meta Platforms | 99 | 41 | 80 | 98 | B | A+ | |
| MakeMyTrip | 99 | 292 | 81 | 93 | B | A- | |
| Modine Manufacturing | 99 | 48 | 88 | 99 | B | A+ | |
| Applied Materials | 98 | -4 | 88 | 92 | A | B- | |
| Emcor | 98 | 31 | 97 | 96 | B | B | |
| Alphabet | 98 | 24 | 90 | 88 | A | B | |
| Pinnacle Finl Partners | 98 | -4 | 92 | 84 | A | B | |
| ACM Research | 97 | 48 | 99 | 90 | A | B | |
| ITT | 97 | 14 | 93 | 87 | B | A- | |
| LegalZoom.com | 97 | 119 | 98 | 92 | B | B- | |
| Martin Marietta | 97 | 46 | 97 | 89 | B | B | |
| PulteGroup | 97 | 9 | 98 | 97 | A | B- | |
| Super Micro Computer | 97 | 12 | 95 | 99 | A | B | |
| Atlassian | 97 | 12 | 98 | 90 | A | B- | |
| Tesla | 97 | -17 | 94 | 90 | A | B- | |
| Trane Technologies | 97 | 20 | 92 | 85 | A | B- | |
| Iron Mountain | 96 | -8 | 83 | 82 | A | B | |
| Owens Corning | 96 | 6 | 89 | 96 | B | B | |
| Opera | 96 | 729 | 81 | 99 | B | B | |
| Veeco Instruments | 96 | -180 | 86 | 96 | B | A | |
| Core & Main | 95 | -1 | 90 | 93 | A | B+ | |
| Griffon | 95 | 6 | 88 | 93 | B | B | |
| KB Home | 95 | -30 | 83 | 95 | B | B+ | |
| KLA | 95 | -12 | 88 | 92 | A | B- | |
| VMware | 95 | 41 | 81 | 93 | A | B |
Data as of Aug. 11, 2023
Build Your Watchlist With Stock Ratings And Stock Lists
Running stock screens with the IBD Stock Screener or MarketSmith is an effective way to streamline your research.
You can also zero in on the best stocks to watch using IBD stocks lists based on a wide range of preset filters. You'll find top-rated stocks meeting the criteria of the IBD 50, IBD Sector Leaders, IBD Big Cap 20, IPO Leaders and more.
Meta stock and Tesla stock, for example, earn a spot on the IBD Big Cap 20.
Once you've put together potential stock picks for your watchlist, you'll want to evaluate your ideas with IBD Stock Checkup. With pass, neutral or fail ratings for each of your stocks, IBD Stock Checkup provides a detailed look at both the fundamental and technical health of the companies on your watchlist.
Additionally, based on the CAN SLIM system, the Composite Rating provides an overall score that takes into account each of the IBD ratings. The single score considers how a company and its stock are performing in terms of annual and quarterly earnings growth as well as its relative strength vs. the rest of the market. The score also accounts for sales, profit margins and institutional demand.
But note that you should not buy a stock solely on its ratings or placement on one of IBD's stock lists. No matter how compelling a company's story may seem, savvy investors will always check the technical action in the stock chart before buying.
Check The Chart To Know When To Buy Meta Stock And Others
Using stock lists helps you zero in on the best stocks to watch. Stock ratings look under the hood to diagnose a company and its stock's fundamental and technical health. Both stock lists and stock ratings help you understand what to buy. But to fully understand when to buy stocks, take a look at the stock chart.
It's also critical to understand what type of environment you're currently in. Is it a bull market when most stocks go up? Or a bear market when most stocks go down? Or is it a volatile, choppy and uncertain time when the market indexes tend to fail to make any sustained headway? That was the case for much of 2022.
Use stock charts to evaluate both the market indexes and individual stocks. Charts will help you pinpoint the best time to buy stocks by identifying support and resistance, as well as buy points and buy zones. Using charts also helps you identify warning signs and when to sell stocks.
So when searching for potential stock picks and stocks to watch, always check the charts. They provide the most unbiased diagnosis of a stock's health.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
