This year might go down in the annals of investing as the year of artificial intelligence (AI) stocks. The explosion of interest in AI lit a fire beneath several stocks, including some of the biggest names in the market.

Many of these AI stocks racked up their biggest gains earlier in the year but have slowed down more recently. However, one of Cathie Wood's favorite AI stocks is skyrocketing late in the year. Is UiPath (PATH -0.96%) a no-brainer buy right now?

One of Wood's favorite AI stocks

We don't have to guess that UiPath is one of Wood's favorite AI stocks; we can know for sure. The Ark Invest CEO has made it abundantly clear in public statements that she really likes the stock. For example, in October she spoke at CNBC's Financial Advisor Summit and identified UiPath as one of her top AI picks.

Ark Invest laid out its case for UiPath in an August report, which argued that lesser-known AI companies are likely to be the bigger winners instead of the current mega-cap players.

It specifically listed two stocks that could be part of "AI's sleeper wave." UiPath was one of them. The Ark Invest report said, "We maintain high conviction in UiPath's ability to integrate Robotic Process Automation (RPA) into many business processes across large enterprises globally."

Perhaps more importantly, Wood has put her money where her mouth is. UiPath ranks as the second-largest holding overall for her Ark Invest exchange-traded funds (ETFs). The stock makes up nearly 7.5% of her total Ark Invest portfolio.

Five of the Ark Invest ETFs own positions in UiPath. It is the third-largest holding of Wood's flagship Ark Innovation ETF. It's the second-largest position in the Ark Autonomous Technology & Robotics ETF. UiPath ranks as the fourth-largest holding in the Ark Fintech Innovation ETF. And it holds down the No. 5 spot in the Ark Next Generation Internet ETF and the Ark Space Exploration & Innovation ETF.

Why UiPath is sizzling hot

UiPath stock was already a big winner heading into the final week of November, up more than 40% year to date. It certainly didn't hurt that UiPath received multiple accolades that raised its profile, including IDC Marketscape naming it as a leader in intelligent document processing and Time magazine selecting UiPath Clipboard AI as one of the best inventions of 2023.

But the main reason UiPath is sizzling hot right now is the company's third-quarter update, announced on Nov. 30. Revenue was $326 million, up 24% year over year. Its dollar-based net retention rate was a high 121%. The company posted adjusted earnings of nearly $69.1 million, more than 2.5 times higher than the result in the prior-year period.

Investors especially liked UiPath's guidance for the fourth quarter: The company predicted revenue of between $381 million and $386 million. The midpoint of this range reflects year-over-year growth of 24%.

The buzz around autonomous agents built using generative AI and UiPath's new Autopilot product is another major factor. Co-CEO Daniel Dines explained in the third-quarter conference call: "It's clear that the world is going into that direction. And again, we are really in a very good position to take advantage of it."

Is the AI stock a no-brainer buy right now?

Some could think that UiPath is perhaps overhyped. After all, the stock now trades at a forward earnings multiple of 48.5. With the tremendous gains it has delivered so far this year, it's also hard to make the case that UiPath is still a part of an AI "sleeper wave."

But I suspect that this stock still has plenty of room to run. There are still a lot of business processes left to automate. UiPath arguably offers the best technology to achieve that goal. I think that this hot AI stock will end up being a two-bagger in 2023. And I predict that it will add to those gains substantially over the next few years.

UiPath probably isn't a no-brainer buy. The stock won't be a great fit for every investor, especially those who are risk-averse. However, it's nonetheless a good stock to buy, in my opinion.