Experts name 4 top ASX artificial intelligence shares

E&P analysts nominate four ASX tech stocks likely to benefit from the AI boom.

| More on:
A corporate female wearing glasses looks intently at a virtual reality screen with shapes and lights representing Block shares going up today

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

ASX artificial intelligence shares are certainly on the radar of many investors these days.

The rise of ChatGPT and the skyrocketing gains of the US Magnificent Seven tech stocks have contributed to AI shares becoming the next big global investment theme.

So, which ASX shares are likely to benefit?

E&P Financial Group analysts provide the answer.

Which ASX artificial intelligence shares is E&P backing?

As reported in The Australian, E&P analysts have nominated four ASX shares that are likely to benefit from the coming artificial intelligence boom.

Specifically, they say the need for infrastructure like data centres and networking services will benefit NextDC Ltd (ASX: NXT), Megaport Ltd (ASX: MP1), and Macquarie Technology Group Ltd (ASX: MAQ) shares.

In a note to clients, E&P said:

… the size of demand for data centre space coming down the line is enormous.

In the last 12 months a lot of investors in the ASX were shocked by deals that arrived that were measured in the 30-plus megawatt range.

We believe this number will look quite small in a couple of years' time.

Which ASX share among this trio offers a potential 30% upside?

The analysts say NextDC shares are worth $22.94 apiece, which is 31% above the current share price.

E&P said NextDC has an advantage in today's supply-restricted market.

There isn't really a modern data centre business that is a loser from the trend, however NextDC's secured land and existing capacity is a valuable asset in an environment where supply is difficult.

Their network ecosystem will mean they will have certain business opportunities around inferencing that other operators may not be eligible for.

E&P is not alone in its conviction on these three ASX artificial intelligence shares.

RBC Capital Markets also believes these shares will be winners in the ASX artificial intelligence revolution.

The broker said:

The improvements should accelerate and stimulate demand for company/hyperscaler activity for AI workloads.

In turn, we believe likely future demand beneficiaries in the Australian listed technology space are NextDC, Macquarie Technologies and Megaport.

Macquarie says Megaport shares are a buy right now. Following the company's half-year results, the top broker retained its outperform rating and upped its 12-month share price target to $18.

The Megaport share price is currently $15.08, so this implies a potential upside of almost 20% for investors.

Megaport reported a staggering 785% improvement in EBITDA and a 43% jump in gross profits for the half.

Goldman Sachs has a buy rating on Macquarie Technology with a 12-month share price target of $93.

Macquarie Technology shares are currently trading for $79.41, implying a potential 17% upside.

… and the fourth stock?

E&P says the fourth artificial intelligence share that should be on investors' minds today is the ASX 200's biggest tech stock, Wisetech Global Ltd (ASX: WTC).

The analysts say Wisetech is likely to benefit from the software side of the artificial intelligence boom.

E&P said:

[Wisetech is] extremely well positioned for this trend, with a decent swath of AI capabilities already, and a completely unique data capability to build from.

Fund manager Wilson Asset Management invests in Wisetech shares via its WAM Leaders Ltd (ASX: WLE) listed investment company (LIC).

The fundie recently commented:

We remain positive on WiseTech as we see the company continuing to gain market share in a large industry, led by its technology platform and new product launches as the company continues to invest in its product and technology for future growth.

Motley Fool contributor Bronwyn Allen has positions in Macquarie Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group, Macquarie Group, Megaport, and WiseTech Global. The Motley Fool Australia has positions in and has recommended Macquarie Group and WiseTech Global. The Motley Fool Australia has recommended Megaport. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Technology Shares

rising asx share price represented by drone flying in the air
Technology Shares

What's happening with Droneshield shares today?

In the last two trading days Droneshield shares leapt 19% then tumbled 16%. So, what’s happening today?

Read more »

A man looking at his laptop and thinking.
Technology Shares

Guess which ASX 200 founder just sold off $18 million worth of company shares

Should investors be worried about this share sale?

Read more »

A skydiving man in a jester hat and carrying a burger and sauce, pokes out his tongue at the camera, indicating all is not lost when you're falling.
Technology Shares

Why is the Droneshield share price crashing 19% on Monday?

Investors are sending shares in Droneshield down 19% in morning trade.

Read more »

A woman holds her hand out under a graphic hologram image of a human brain with brightly lit segments and section points.
Technology Shares

1 ASX artificial intelligence (AI) stock that could help turbocharge your portfolio

Analysts at Goldman Sachs are raving about this AI stock.

Read more »

a group of tech people gather around a computer operated by a young woman while the group looks on in support.
Technology Shares

Brokers say this rapidly growing ASX 200 tech stock is a strong buy

Big returns could be on the cards for owners of this stock.

Read more »

A corporate female wearing glasses looks intently at a virtual reality screen with shapes and lights representing Block shares going up today
Technology Shares

Here are 'blue-sky valuations' for these hot ASX 200 tech stocks

These ASX 200 tech stocks could have huge potential according to analysts.

Read more »

A person sitting at a desk smiling and looking at a computer.
Technology Shares

'You could make a decent amount of money' from this ASX 200 tech stock

This stock could be an underrated play.

Read more »

A woman sits at her computer with her hand to her mouth and a contemplative smile on her face as she reads about the performance of Allkem shares on her computer
Technology Shares

What's happening with the NextDC share price on Thursday?

NextDC is raising $1.32 billion to accelerate its data centre developments amid the rapid growth of AI.

Read more »