Can Stocks Picked by Artificial Intelligence Beat the Market? 3 Stocks to Watch

Autozone

• Market value: $44.2 billion
• AI Score: 9.0
• Low Risk Score: 6.0
• AI Risk/Reward Score: 7.5

Autozone's (AZO) price chart might be a source of frustration for investors these days, but it's flashing some enticing news for traders. According to Danelfin, AZO stock is set to beat the market over the next three months with a minimum of downside risk.

Shares in the auto parts and accessories retailer boast a near-perfect AI Score of 9, per Danelfin's algos, supported by equally high scores for fundamentals and technical indicators. If there's an obvious blemish on AZO's profile, it's that readings for sentiment fell to a neutral score of 5 from a positive mark of 7 over the past month. 

Interestingly, Danelfin has a pretty good track record with AZO stock, correctly identifying past three-month buy signals more than 72% of the time.

Wall Street has long been bullish on AZO stock as a long-term holding, and shares in the auto parts and accessories retailer have more than rewarded that faith. Not only has AZO stock beaten the S&P 500 by wide margins over the past three, five, 10, 15 and 20 years, but it has almost doubled the return of the broader market during its time as a publicly traded company. 

Sadly, the more recent past hasn't been quite as remunerative for Autozone shareholders. AZO stock missed out on 2023's remarkable rally in equities and is now lagging the broader market by about 15 percentage points over the past 52 weeks.

UnitedHealth Group

• Market value: $481.1 billion
• AI Score: 8.0
• Low Risk Score: 8.0
• AI Risk/Reward Score: 8.0

UnitedHealth Group (UNH) typically ranks near the top of the list of analysts' favorite Dow Jones stocks, and well it should. The nation's largest health insurer by revenue and market value has been a buy-and-hold investor's best friend, beating the broader market by wide margins over the past three, five, 10, 15 and 20 years. Heck, over its entire life as a publicly traded company, UNH has outperformed the S&P 500 by 14 percentage points. 

Alas, UNH – as defensive a blue chip dividend stock as they come – didn't participate in 2023's epic equity returns. While the broader market rose 24% on a price basis last year, UNH stock was essentially flat. 

Happily for UNH bulls, Danelfin's algos expect the healthcare sector stalwart to deliver market-beating results over the next three months, and with a minimum of risk. Encouraging developments include sentiment readings that have improved to 8 from a neutral rating of 5 over the past three months, as well as rising scores for fundamentals.

It's also worth noting that Danelfin has a good track record with UNH stock. When the fintech's algo's have caught buy signals for UNH in the past, shares have outperformed the broader market over the following three months almost 70% of the time. 

As attractive as UNH might look as a trade, Wall Street likes it even more as a long-term bet. Of the 25 analysts issuing opinions on the stock surveyed by S&P Global Market Intelligence, 16 rate it at Strong Buy, five say Buy, three call it a Hold and one says it's a Strong Sell. That works out to a consensus recommendation of Buy, with high conviction. 

W.W. Grainger

• Market value: $41.5 billion
• AI Score: 9.0
• Low Risk Score: 7.0
• AI Risk/Reward Score: 8.0

Anyone who is a fan of dividend stocks you can count on for dependable dividend growth is probably already well acquainted with W.W. Grainger (GWW). This member of the S&P 500 Dividend Aristocrats index has increased its dividend for 52 consecutive years and counting. 

Thanks in part to those regular and rising payouts, shares in GWW are a long-time market beater. That's not really news, though. What's more interesting is that GWW is poised to beat the market with a minimum of risk over the next three months, per Danelfin's AI platform.

An AI Risk/Reward score of 8.0 suggests that GWW will outperform the broader market over the shorter term – and will do so with comparatively low risk. The stock boasts a near-perfect score for fundamentals going back to April 2022. Meanwhile, readings of technical strength vaulted to 9 from 6 over the past month. Such action bodes well for the GWW's price performance in the nearer term, per Danelfin's assessment.

Be that as it may, folks with longer horizons should know that the Street gives GWW a consensus recommendation of Hold. Of the 16 analysts covering the stock, three call it a Strong Buy, 11 have it at Hold and two slap Sell ratings on the name. 

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