No matter how well or poorly the stock market is performing, you can always count on a next-big-thing investment creating a buzz on Wall Street. In 2023, that next-big-thing investment is artificial intelligence (AI).

AI involves utilizing software, systems, and machines to handle tasks normally overseen by humans. The machine-learning capabilities of AI give the technology broad application and mean its growth potential isn't confined to any one sector or industry.

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Although estimates vary wildly regarding the rate of AI adoption and eventual market value, Grand View Research foresees substantial growth. A recently released report calls for a blazing compound annual growth rate of 37.3% for the global AI market between 2023 and 2030. 

This potential certainly isn't lost on Wall Street institutions, analysts, and pundits. According to Wall Street, the following three artificial intelligence stocks possess upside potential (based on issued price targets) of between 54% and 675%.

Tesla: Implied upside of 675%

The first AI stock that at least one Wall Street pundit believes can skyrocket is electric vehicle (EV) manufacturer Tesla (TSLA 3.66%). In a published report, Ark Invest CEO Cathie Wood made the case for Tesla shares to reach $4,600, or $1,533.33 per share after accounting for the 3-for-1 stock split Tesla enacted last August. If eventually achieved, this would represent 675% upside from where shares ended on March 3.

Tesla is incorporating AI into its business in a variety of ways. The most obvious is Tesla utilizing AI with the Level 2 full self-driving (FSD) software used in its EVs. While Tesla's EVs aren't fully autonomous, they are able to use sensors and machine vision cameras to make split-second decisions based on surrounding vehicles, pedestrians, and obstacles. The data Tesla collects from the hundreds of thousands of its EVs on the road should help the company map out future improvements in both its FSD software and AI-focused FSD chips

On an even more futuristic scale, Tesla is venturing into robotics. CEO Elon Musk has opined that Tesla Bot (known officially as Optimus), a robotic humanoid being designed to handle repetitive tasks, could one day be as commonplace in homes as in industrial settings. 

However, Tesla's AI ambitions are a long way from becoming reality. While Musk has never lacked for far-reaching innovations, delivering on his promises has been nothing short of a struggle. Investors have a tendency to bake Musk's promises into Tesla's valuation while ignoring the fact that Musk has punted innovations further down the line on multiple occasions.

The biggest issue for Tesla is that it's just a car company. Almost the entirety of its gross profit is reliant on selling EVs and, to a lesser extent, leasing and selling renewable energy credits. The remainder of Tesla's ventures are low-margin and lose money. Until this changes, Tesla is grossly overvalued as just a car company, and highly unlikely to reach Wood's moonshot price target.

CrowdStrike Holdings: Implied upside of 86%

The second AI-driven company that one Wall Street analyst believes could soar over the next year is cybersecurity stock CrowdStrike Holdings (CRWD -1.46%). Analyst Trevor Walsh of JMP Securities foresees CrowdStrike reaching $235 per share, which would equate to 86% upside from where the company ended this past week. 

AI is absolutely integral to what CrowdStrike does to protect to end users from various cyber threats. The company's cloud-native platform, Falcon, leans on AI and machine-learning capabilities to oversee trillions of events each week. Every single event adds to Falcon's database and makes it more efficient at recognizing and responding to potential threats over time.

The true test of Falcon's worth can be seen in CrowdStrike's quarterly gross retention rate. Even though there are cheaper cybersecurity solutions available for end users, CrowdStrike's gross retention rate has climbed from 93% to more than 98% between early fiscal 2018 and the end of fiscal 2022. Existing subscribers are willingly paying more for CrowdStrike's cloud-based software-as-a-service (SaaS) solutions.

But that's not all. In addition to staying loyal to CrowdStrike, the company's 21,146 subscribers have been steadily adding to their initial purchase. More than five years ago, fewer than 1 out of 10 subscribers had purchased four or more cloud-module subscriptions. As of the company's fiscal third-quarter report for 2023, 60% of its 21,146 clients had purchased at least five cloud-module subscriptions. These add-on sales have pumped the company's adjusted subscription gross margin to almost 80%. 

As one final note, cybersecurity has effectively become a basic necessity service. Hackers and robots don't take time off from trying to steal sensitive data just because Wall Street had a bad day. The defensiveness of enterprise-based cybersecurity needs, coupled with a high-margin, subscription-driven operating model, may very well allow CrowdStrike to eventually make a run at JMP Securities' high-water price target.

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Meta Platforms: Implied upside of 54%

The third artificial intelligence stock set to soar, based on the prognostication of at least one Wall Street analyst, is social media giant Meta Platforms (META -1.00%). The company formerly known as Facebook recently had a $285 price target slapped on its shares by analyst Ivan Feinseth of Tigress Financial. If Feinseth is correct, Meta's stock offers up to 54% upside from where it closed last week.

There are a number of ways Meta is attempting to utilize AI to improve its existing operations and jump-start new sales channels. A good example would be Meta using machine-learning software and natural language processing to monitor and remove violent, sexually explicit, and hate-filled speech on its platforms. 

Another example occurred this past August, when Meta launched Advantage+, a machine-learning solution designed to help advertisers more effectively reach their audience. Advantage+ helps eliminate the costly and time-consuming manual creation of ads and can automate up to 150 combination ads at once. The result is that businesses can more quickly determine what advertising aspects and price points are hitting home with consumers. 

Although Meta's AI ambitions also include its Oculus virtual reality device, the company's operating results show it's still very much ad dependent. Last year, all but $3 billion of its $116.6 billion in revenue came from advertising. 

Then again, this isn't a bad thing. Even though ad revenue naturally tapers during economic contractions, the U.S. and global economy spend a disproportionate amount of time expanding. Given that more than half of the world's adult population visits a Meta-owned social media asset -- Facebook, WhatsApp, Instagram, or Facebook Messenger -- each month, it's bound to possess strong ad-pricing power more often than not.

Though it could be some time before AI solutions become a meaningful portion of Meta's revenue, a $285 price target for such a dominant social media stock is certainly feasible at some point in the future.