Hi tech is the cool kid of investment sectors, offering an unbeatable combination of cutting edge chic and long-term stock market returns. It’s understandable; our digital world has clearly passed a point of no return in the integration of tech with our daily lives. Tech companies, whether large or small, are clearly in a position to gain from this trend, offering the products and innovations that will facilitate and expand the growth of our high-tech footprint. Artificial Intelligence, or AI, is at the forefront the tech wave. AI systems, which allow machines to learn from experience, adapt to change, and process more information faster than ever before, are powering the evolution of tech. New AI systems are making possible autonomous vehicles, personalizing sales and marketing, and speeding up the networked systems that hold the digital universe together. From an investor standpoint, the companies that are building and using AI systems now are in position for gains in the near future. AI is here, and it’s only going to expand its presence. With this in mind, we’ve opened up the TipRanks database to get the scoop on three “Strong Buy” stocks, according to the analyst community, which are making profitable use of AI technology, and jockeying for position out of the gate. iCAD, Inc. (ICAD) We’ll start in the medtech segment, where iCAD produces solutions, including advanced image analysis, radiation therapy, and workflow to facilitate early identification and treatments for cancer. iCAD offers a comprehensive platform of hardware and software. The company’s ProFound AI Risk tool is an integrated platform that streamlines the diagnosis and treatment of breast cancer; the VeraLook platform uses similar advanced technology to improve image processing in the detection of colon polyps. Medical technology is in high demand, and iCAD’s AI-powered platforms take common diagnostic tools and improve their accuracy. It’s part of a natural trend in medtech, of greater integration of tools and treatments. The field, like much of the medical industry, is growth, and iCAD reported $10.5 million in revenues for 4Q20, a sequential gain of 47%, which was powered by a 70% sequential gain in product revenue from ProFound AI. Year-over-year, quarterly revenue was up 11%, and the ProFound AI sales, in particular, gained 21%. Covering this stock for Oppenheimer, analyst Francois Brisebois sees ProFound AI as powerful gainer for the company. “We believe growth investors will be rewarded over the years as ICAD gains further share in a growing TAM by providing transformative AI-driven breast cancer detection products as well as targeted, efficient, cancer therapy solutions (quality over quantity). We believe ICAD represents an attractive vehicle for investors looking for exposure to biotech innovation themes and AI data growth waves. Ultimately, while ProFound AI Risk is in its very early stages of launch, we believe it represents a great example of AI’s potential in changing treatment paradigms,” Brisebois opined. Unsurprisingly, Brisebois rates ICAD an Outperform (i.e. Buy) along with a $27 price target. This figure implies a 63% one-year upside. (To watch Brisebois’ track record, click here) The unanimous Strong Buy consensus rating on ICAD shares shows that Wall Street is in broad agreement with Oppenheimer’s analyst; there are 7 Buy-side ratings on ICAD shares. The $21.57 average price target implies an upside of 30% from the $16.55 trading price. (See ICAD stock analysis on TipRanks) Baidu, Inc. (BIDU) Not every high-end AI stock is based in the US. Shifting our view to China, we’ll take a look at Baidu, the Asian giant’s largest search engine. In fact, Baidu is the largest internet search platform in the world’s largest language, used daily by well over 1.3 billion people. Baidu has a massive userbase, and just because Western and Chinese internet systems aren’t interconnected doesn’t mean that Western investors should overlook BIDU stock. Baidu’s gains are driven by a series of initiatives. The company benefits, like Google, from placing targeted ads on the search platform, ads that are powered by AI software. In addition, Baidu has been expanding the potentialities of its AI, moving into cloud computing and autonomous vehicles. In the past year, the company has even begun launching an autonomous vehicle system, the 14-passenger Apolong bus, in Guangzhou. In February, Baidu reported 4Q20 earnings and revenues, with slightly mixed results. The top line revenues came in at $4.6 billion, just below the forecast of $4.7 billion, but was still up 12% year-over-year; EPS on the other hand, at $3.08, slipped 25% yoy despite beating the forecast by over 10%. Among BIDU’s bulls is Fawne Jiang, a 5-star analyst with Benchmark, who writes: “BIDU is making great strides monetizing new AI initiatives including smart transportation and intelligent driving, which should fuel the Company’s longer-term growth. We believe BIDU is well positioned to grow into a meaningfully expanded TAM capitalizing on growth opportunities in cloud, smart transportation, intelligent driving and other AI initiatives.” In line with these upbeat comments, Jiang rates BIDU as a Buy, and sets a $385 price target that indicates confidence in a 65% upside potential. (To watch Jiang’s track record, click here) With 14 recent Buy ratings, opposed to only 4 Holds, the BIDU shares have earned a Strong Buy from the analyst consensus. The stock is selling for $232.68, and its $343.44 average price target implies ~48% upside from that level. (See BIDU stock analysis on TipRanks) Five9 (FIVN) Let’s look into the cloud now, where Five9 offers a scalable contact center platform using an AI cloud technology. Contact centers have been a successful growth segment in the past couple of decades, and cloud computing has changed the way we use software. AI, by making computers smarter and data analysis faster, more efficient, and more accurate, has revolutionized both; contact centers using AI ‘smart’ clouds can track and route calls, process information, and direct callers and service agents to each other faster for better results. In 4Q20, the most recent reported, the company showed 39% year-over-year growth in revenue, to $127.9 million – a company record. EPS, however, was negative, with the loss hitting 11 cents per share. This was an unfortunate turnaround from the 1-cent EPS profit posted in the year-ago quarter. On a more positive note, the company finished 2020 with $67.3 million in operating cash flow, up 31% from the prior year. Also of interest to investors, Five9 on March 4 announced that it has been selected as the cloud computing vendor for CANCOM, a leading UK IT company. The partnership makes Five9 the platform that CANCOM will use to expand its call center services, and gives Five9 a strong foothold in the European market. Weighing in for Craig-Hallum, 5-star analyst Jeff Van Rhee noted, “Digital transformations have been kicked into high gear by COVID and the genie is not going back in the bottle. In addition, FIVN has been very aggressive over the past few years moving to public cloud for the entire stack and layering in outstanding AI capabilities. Demand for AI was noted to be playing an extremely important role in many of the largest deals… there’s little doubt about the momentum, performance, and remaining opportunity for FIVN.” Van Rhee puts a Buy rating on the stock, along with a $215 price target implying a 40% one-year upside. (To watch Van Rhee’s track record, click here) Once again, we are looking at a Strong Buy stock. The analyst consensus rating here is based on 17 recent reviews, including 15 Buys and 2 Holds. Shares are trading for $153.81 and have a $202.31 average price target, making the 12-month upside ~32%. (See FIVN stock analysis on TipRanks) To find good ideas for AI stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.