In late 2023, I published three articles outlining top stocks to buy, according to artificial intelligence. We’ve long known that markets leave exploitable “clues,” and our publishing partners at TradeSmith have developed an AI-powered system to seek these out.

The results have been stunning.

By combining TradeSmith’s stock-picking system with our bottom-up analysis, we’ve achieved 20% gains on average!

Some of these picks were obvious… at least in hindsight. James Hardie Industries (NYSE:JHX) is a top-quality construction goods maker that’s seeing a resurgence in housing demand. Its shares rose 45% within two months of our recommendation. Others were less clear. Sight Sciences (NASDAQ:SGHT) has lost money every year since going public in 2018… yet our AI system was able to time its purchase just right to achieve 2X returns.

The latest version of TradeSmith’s AI system, which their team is calling “An-E 2.0,” can boost returns even higher… turning 7.79% gains into 900% gains, among others.

Here’s a preview of five surging stocks that “An-E 2.0” and our team at InvestorPlace.com believe are set to rise over the next month.

1. Adobe (ADBE)

Yiannis Zourmpanos notes that Adobe (NASDAQ:ADBE) will likely become a strong Magnificent 7 contender in the coming months. The company is a leader in digital media, and its growth in cloud-based file management has been exceptional. In 2023, the company saw shares rise 77%.

Within this segment, creative revenue amounted to $3 billion, growing by 12% year-over-year. Meanwhile, Document Cloud revenue reached $721 million, suggesting a 17% year-over-year increase.

The company’s Creative Cloud suite remains the industry standard. Especially for creative professionals, small businesses, and enterprises. Similarly, Adobe’s ongoing investment in product advancements is coupled with its rapid pace of AI model development. This empowers users to create and monetize content more extensively.

Adobe is also relatively cheap following a double-digit pullback in February. The firm now trades at less than 30 times forward earnings, compared to the 35X multiples seen by similar software firms.

Historically, these types of stocks then continue their upward rise. High-quality stocks often fall for no reason on profit-taking, but we usually see a swift recovery after that.

This fact is not lost on An-E 2.0, which awards Adobe a 5% upside by mid-March. And for investors willing to hold on for longer, a bottom-up analysis suggests they will likely see 15% average annual gains as Adobe continues to convert its rapid growth into tangible earnings.

2. Meta Platforms (META)

Shares of Facebook parent Meta Platforms (NASDAQ:META) tumbled 75% in 2022 after spending on digital advertising suddenly dried up. A recent upgrade to Apple’s iOS privacy rules made it harder for Facebook to target users, and advertisers pulled back as a result.

Since then, Meta’s management have adjusted. The company rebuilt their ad technology to sidestep these restrictions and began to market itself to a new set of advertisers. Chinese e-commerce retailers Temu and Shein alone accounted for about 3% of Meta’s total growth last year. Shares recovered to their prior peaks by the end of 2023.

Facebook’s recent blowout earnings now put the social media firm on a new leg of growth. TradeSmith’s AI system expects another 4.4% return by mid-March.

Much of Wall Street agrees, Joel Baglole observes at InvestorPlace.com. He writes this week that analysts at Bernstein have lifted their price target from $375 to $435, and that the 47 analysts covering Meta Platforms have a strong buy rating overall. An uptick in digital advertising surrounding the 2024 elections should boost Meta’s earnings as much as 34% this year.

However, Dana Blankenhorn rightly urges some caution, especially around AI mania:

Meta Platforms is called a sure-thing winner in the AI race… [but] where will the money come from? Advertising?

What’s making the headlines, its use of Facebook and Instagram images to create new images, are just a sideline. It’s something of a magic trick. Critics can focus on Meta’s development of user tools while the money comes rolling in from better ad targeting.

Together, that tells us Meta will be a strong tactical play for the next several months. But because shares are likely overvalued, be sure to take profits off the table as the business cycle runs its course.

3. Arista Networks (ANET)

Arista Networks (NYSE:ANET) is a wide-moat firm that provides high-speed networks for data centers. Cloud computing sites require immense speeds of 100 gigabits or more, and Arista’s products have vaulted it ahead of incumbent Cisco Systems (NASDAQ:CSCO) in that space.

The recent splurge on AI-related cloud computing now promises a new leg of growth. We’re seeing firms like Super Micro Computer (NASDAQ:SMCI) rise 1,000% or more, driven by insatiable demand for new AI-optimized servers. And these new sites are driving strong growth to Arista’s already formidable business.

Larry Ramer at InvestorPlace.com writes that Arista Networks is seeing a secular tailwind from edge AI, which the Silicon Valley company has wisely invested in.

Edge AI devices are connected to the internet and have their own AI rather than relying on distant data centers and the cloud…

ANET markets “hardware for localized data centers” and “infrastructure software for managing local networks enabled by edge computing.” As a result, it’s well-positioned to benefit from the proliferation of Edge AI.

That’s likely why TradeSmith’s AI system now awards a 4.2% upside for Arista by mid-March. Demand for AI products is booming, and investors are belatedly buying up companies they see as “the next Nvidia.”

Please note that Arista Networks does trade at a slight premium to its justified value. So, much like Meta Platforms, this is a tactical play to ride current trends higher.

4. ServiceNow (NOW)

ServiceNow (NYSE:NOW) is a top-tier workflow automation platform that helps businesses with repetitive processes. The firm’s Now Platform is used for everything from helping new workers complete onboarding tasks to managing customer service operations.

Artificial intelligence has now put growth at the Silicon Valley firm into overdrive. Its most recent quarter saw a 25.6% increase in sales, driven by adoption of its generative AI products. Fortune 500 managers know they should be using AI and machine learning (ML) to streamline their workflows, and ServiceNow provides out-of-the-box products that cater to this exact need.

The result is a hypergrowth firm that could turn $1,000 into $1 million, according to Michael Que at InvestorPlace.com. He notes how ServiceNow’s early lead in AI-driven workflow automation creates a natural moat to its business:

Over time as the platform operates and gathers more data, the company becomes more proficient in predicting ways to prioritize tasks. Although it’s not being widely recognized, ServiceNow actively employs machine learning to revolutionize work processes. ServiceNow is a stock with a long runway ahead but has massive upside potential.

A recent pullback in share prices now gives ServiceNow a 3.4% upside by mid-March, according to TradeSmith’s AI model.

5. Nvidia (NVDA)

Finally, TradeSmith’s system highlights an “obvious” pick for investors: Nvidia (NASDAQ:NVDA).

It’s a curious choice, since the chip designer surged another 15% after announcing stunning earnings. But demand for the company’s AI chips has been so red-hot that the “An-E 2.0” system believes another 3.9% gains are in the works by mid-March. Nvidia has also roughly quadrupled the prices it charges for flagship processors, increasing profits at virtually no additional cost.

Nvidia’s fundamental story also remains strong, as I outline in my recent $1,600 target-price thesis for the chipmaker. The company uses a proprietary platform to link its processors together, which means developers must create code that uses this particular standard. Over time, that makes switching away from Nvidia’s chips increasingly difficult because every legacy application must get recoded for new systems. (Almost half of the U.S. financial system, for instance, still runs on ancient COBOL code because rewriting code is so time consuming).

Though the AI poster child looks pricey today, history tells us that there’s still more upside ahead.

Riding the AI Wave

You’ll quickly notice that every pick chosen by “An-E 2.0” is an AI company of one sort or another.

That’s no mistake. AI models typically seek out patterns, which means past events are assumed to repeat.

Consider the lessons “learned” from previous booms. During the dot-com era, Cisco (which briefly became the most valuable firm in the world) took more than four years to play out. A similar rush into commodity stocks during the mid-2000s saw companies like mining/steelmaking firm Cleveland-Cliffs (NYSE:CLF) inflate to incredible valuations. Applying the same logic to Nvidia today suggests another several years of gains ahead.

Of course, we need to be careful about relying on history alone. That’s why these recommendations have been backed up with fundamental analysis by our team. But AI is exceptionally powerful at seeing patterns that others might miss. And today, it’s predicting a continued surge in AI-related stocks.

On the date of publication, Thomas Yeung held no positions in any stock mentioned in this piece. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.