Recent advancements in artificial intelligence (AI) suggest that we’re getting closer to experiencing the significant changes expected as it becomes more widely used in various fields.
As machines develop the ability to exhibit intelligent behavior, the methods of performing tasks are likely to evolve. This offers an interesting opportunity for individuals looking to invest in high-performing AI stocks.
The year 2023 has seen a notable surge of interest in AI. Its increasing prominence in public discussions aligns with a visible uptick in the value of AI stocks. This may mark the initiation of a lasting pattern. The AI sector, valued at $93 billion in 2022 — a rise of 12% — is forecasted by analysts at IBM to expand by 40% to 80% in the upcoming three years.
Companies producing chips, creating software, and leading in technology could all profit from AI’s growing mainstream adoption. However, just like any substantial transformation, there will be those who thrive and those who don’t.
The subsequent five companies provide compelling grounds for investors to contemplate their stocks. Each of them covers a broad spectrum of the AI realm, holding distinct positions. They are diligently pursuing the role of a dominant player in this crucial sphere of growth.
C3ai.Inc (AI)
As machines become smarter, the way tasks are done is likely to shift, creating an interesting opportunity for those investing in high-performing AI stocks.
AI has captured significant attention in 2023. Its increasing prominence in public discussions aligns with a noticeable surge in the value of AI stocks. This could signal the beginning of a lasting trend. The AI sector, valued at $93 billion in 2022 — a 12% surge — is anticipated by IBM analysts to grow between 40% to 80% in the next three years.
Companies producing chips, crafting software, and leading in technology could all reap rewards as AI becomes more mainstream. However, just like with any significant transformation, there will be those who succeed and those who struggle.
The following five companies provide compelling grounds for investors to explore their shares. Each of them covers a wide spectrum of the AI landscape, holding distinct positions. They are striving to become the dominant force in this pivotal realm of growth.
Microsoft (MSFT)
Prominent American tech giant Microsoft consistently adjusts to emerging trends, echoing CEO Satya Nadella’s belief that AI is the “key technology of our time.” Categorized in the Information Technology sector, Microsoft’s operations include computer software, consumer electronics, and cloud services. Its diverse range of current products positions the company to leverage advancements from its AI research unit, seamlessly incorporating innovative technologies throughout its various divisions.
Alphabet (GOOG)
Most famously known for its search engine prowess, technology powerhouse Alphabet, the parent company of Google, has embraced its identity as an “AI-first” entity since 2018. Throughout 2009 to 2020, Alphabet acquired numerous startups with a strong focus on AI. Recently, the company has introduced a range of AI products, including Bard and Product Studio, tailored to different sectors of the global economy.
Positioned in the Technology Services sector, Alphabet is well-positioned to fully utilize AI’s potential. Its wide array of offerings – spanning digital content, advertising, cloud computing, and apps – primarily engage directly with end-users.
NVIDIA (NVDA)
NVIDIA (NVDA), a well-known chip designer, has carved its own path by utilizing innovative parallel processing technology in GPUs (Graphics Processing Units), solidifying its dominant position in the gaming industry. While graphics chips still make up 59% of NVIDIA’s revenue, the company is looking to broaden its horizons by leveraging its technical expertise to make strides in the AI sector.
Categorized within the Information Technology sector, NVIDIA’s diverse range of sub-sectors mirrors the operations of its various divisions. Particularly attractive to investors is the thriving market for electric vehicles (EVs) and autonomous vehicles, where NVIDIA already holds a technological advantage due to its proficiency with GPUs.
Upstart (UPST)
Founded in 2012, Upstart Holdings Inc harnesses AI technology with the potential to revolutionize the financial sector. The company’s distinctive approach employs AI in the loan approval process, using non-conventional metrics to assist banks and other financial institutions in making well-informed lending decisions.
As a part of the Finance/Consumer Services sector and listed on the NASDAQ exchange, Upstart has garnered favor among both borrowers and lenders. With a remarkable Trustpilot rating of 4.9 out of 5.0, the company has formed partnerships with 83 different banks and credit unions.
Getting Started with AI Stock Investment
If you’re new to the world of stock trading and interested in venturing into AI stocks, your first step is to set up a brokerage account. We suggest Pepperstone as our top-rated global broker.
Afterward, you’ll need to decide how much exposure you want to have in AI stocks. Directly investing in individual AI stocks could potentially lead to significant returns, but it also comes with notable risk, initial costs, and requires thorough research.
Alternatively, you have the option to invest in AI stocks through funds. This approach enables you to spread your investment across various AI companies, thus lessening the risk associated with investing in a single stock. Some of these funds might include Exchange Traded Funds (ETFs) that focus on AI and technology companies.
Keep in mind, it’s crucial to conduct thorough research and carefully consider your investment objectives and risk tolerance before diving into the realm of AI stocks. Seeking guidance from a financial advisor is also advisable for personalized investment recommendations.