Join Whatsapp Group

Join Telegram Group

Top AI Stocks to Buy

4.8/5 - (5 votes)

Top AI : Computers demonstrate exceptional proficiency in tasks involving numerical computations; however, they often struggle with activities that come naturally to humans, such as language processing, visual perception, object manipulation, reasoning, planning, and learning.

(AI), along with its branches like deep learning and machine learning, leverages computer systems to execute activities that traditionally demand human intelligence. Examples include tasks like generating language and recognizing facial features. The aim is to equip machines with the capability to emulate and perform tasks that, until now, were exclusive to human cognitive abilities.

How do companies use artificial intelligence?

Artificial intelligence, or AI, is forged through machine learning, a process that entails training a system with vast amounts of data. Subsequently, the trained system uses this knowledge to draw inferences about new data it encounters.

A straightforward illustration is an image detection system. The system is exposed to images containing specific objects, learning how to identify them in other images. The more instances it encounters, the more refined and accurate its detection capabilities become.

Advertisement

Companies harness AI in two primary ways. Many tech firms deploy it to enhance their existing operations, powering applications like robotics, self-driving cars, and virtual assistants. For instance, utilizes AI to filter spam in Gmail, employs it to suggest products to customers, and Netflix relies on AI for content creation and recommendations.

In recent times, OpenAI's ChatGPT has showcased the advancements in generative AI, a subset of AI capable of generating texts, images, sounds, and ideas. This model can proficiently answer questions, compose poems, and has even successfully navigated bar and medical exams, underscoring the immense potential of large language models.

Some companies directly profit from AI by offering hardware, software, services, or expertise required for the . These are recognized as true AI stocks and encompass the companies listed and described below.

Five AI stocks to buy in 2024

1.

Nvidia, a leading graphics chip company, has capitalized on the AI surge by establishing its graphics cards as the default standard in data centers globally. The training phase of machine learning demands substantial computing power, a requirement well-met by graphics processing unit (GPU) chips. Originally designed for rendering video games, GPU chips effectively support both the training and inference phases of machine learning.

Advertisement

Nvidia's data center business now constitutes the majority of its revenue, primarily due to the rise of generative AI. As a provider of essential components for AI infrastructure, Nvidia experienced a significant revenue boost, doubling in the second quarter of 2023 and driving a surge in its stock value.

The company's chips are particularly favored for handling demanding workloads, such as those required by large language models. Nvidia recently unveiled an upgraded version of its AI computing platform, the HGX H200, scheduled for deployment by major cloud infrastructure services in 2024.

Nvidia has also directed its attention to self-driving cars, developing hardware and software platforms capable of powering both driver-assistance features and fully autonomous driving. Given the immense data processing demands of self-driving vehicles – analyzing data from multiple sensors and cameras in real time to detect objects and make complex decisions – Nvidia's platform stands out for its exceptional computing power.

In addition to its prowess in AI, Nvidia's professional visualization segment, encompassing its omniverse, holds significant potential. While specialized processors tailored for AI might eventually challenge Nvidia's graphics cards, the company currently enjoys a favorable position in the market.

Advertisement

2. Alphabet

Alphabet, having anticipated the AI revolution, has made strategic moves over the years, most notably acquiring the AI research lab DeepMind in 2014. The company is at the forefront of autonomous vehicles through its subsidiary Waymo, which has successfully deployed driverless cars transporting passengers in cities like San Francisco and Phoenix.

In response to the emergence of ChatGPT as a potential threat to Google Search, Alphabet introduced Bard AI, its own AI chatbot. Despite initial concerns about a challenge to its search dominance, Alphabet seems to have navigated these waters successfully.

Given that information forms the core of its business, Alphabet's emphasis on AI is not surprising. The company has introduced AI tools for Google Cloud and Google Workspace, including a generative AI assistant designed to assist in email composition. Moreover, Alphabet's customer acquisition strategy in the cloud revolves around AI, with a specific focus on attracting AI startups to its cloud infrastructure service.

AI is woven into the fabric of Alphabet's operations, contributing to enhancements in its search engine and YouTube. In the latter case, AI aids in pinpointing relevant sections of videos, streamlining user access to specific content.

Advertisement

3.

Microsoft has garnered significant attention lately, particularly due to its partnership with OpenAI. The tech giant initiated investments in the tech startup back in 2019 and recently injected an additional $10 billion into OpenAI, closely following the launch of ChatGPT.

One notable outcome of this collaboration is the introduction of a revamped version of Microsoft's Bing search engine, leveraging the capabilities of ChatGPT. The company is actively integrating GPT features across its extensive product portfolio, spanning its Azure cloud infrastructure service, Edge web browser, Office productivity software suite, Bing, and Copilot for Microsoft365.

CEO Satya Nadella has consistently emphasized his vision of AI as the next major computing platform. The substantial $10 billion investment in OpenAI reflects Microsoft's commitment to AI and its recognition that leading this transition is crucial to avoid being left behind, as was the case with mobile technology.

Beyond these initiatives, Microsoft is harnessing AI in diverse applications. In healthcare, it's deploying AI for automated clinical documentation to streamline paperwork and administrative tasks. Additionally, Microsoft is empowering customers to build custom AI tools through its Azure platform, showcasing its commitment to providing versatile and accessible AI solutions.

Advertisement

4. Amazon

Amazon stands out as a company extensively leveraging AI across its diverse operations. Founder and Executive Chairman Jeff Bezos has been a vocal advocate for AI and machine learning, and despite Amazon's origins as an online retailer, technology has always been central to its identity.

The scope of Amazon's AI applications is extensive, ranging from the widely recognized voice-activated technology Alexa to the cashierless Amazon Go grocery stores. Amazon Web Services Sagemaker, a cloud infrastructure tool, is pivotal for deploying high-quality machine learning models. The company has also introduced Bedrock, a service designed for constructing AI applications, invested in Anthropic AI, the creator of the AI chatbot Claude, and developed its own AI chips, Inferentia and Trainium.

Amazon's e-commerce prowess is underpinned by AI, with algorithms steering top-notch recommendation engines for e-commerce, video streaming, and music streaming. The company also utilizes AI for determining product rankings.

The efficiency of Amazon's logistics operations benefits significantly from its AI capabilities, aiding in scheduling, rerouting, and other enhancements to delivery accuracy and efficiency. Amazon's longstanding pursuit of drone delivery represents another potential application of AI for the tech giant. While quantifying the exact impact of AI on Amazon's business is challenging, it is undoubtedly a pivotal component of the company's competitive edge.

Advertisement

Throughout its history, Amazon has consistently embraced emerging technologies, from e-commerce and e-books to cloud computing, video streaming, and voice-activated technology. AI serves as a fundamental infrastructure, enabling Amazon to swiftly and effectively venture into new business domains.

5.

C3.ai stands out as a potentially pure-play AI stock on the stock market, as indicated by the “ai” in its name and ticker. Unlike other companies mentioned earlier, which are diversified tech giants or chipmakers with AI-related businesses, C3.ai places artificial intelligence at the core of its entire focus.

Operating as a software-as-a-service (SaaS) company, C3.ai provides software enabling companies to deploy extensive AI applications. The tools offered by the company assist customers in accelerating software development, reducing costs, and mitigating risks, with applications spanning various industries.

One notable application is C3 AI Readiness, used by the U.S. Air Force to predict aircraft systems failures, optimize spare parts identification, and enhance mission capability. European utility company Engie leverages C3 AI for analyzing energy consumption and optimizing energy expenditures.

Advertisement

C3.ai has also ventured into generative AI, introducing a suite with enterprise search as its inaugural product. This allows customers to use a natural language interface for locating and retrieving relevant data across all of an enterprise's information systems.

Positioning itself as a first mover in its industry, C3.ai claims to be unaware of any direct competition with a comprehensive end-to-end enterprise AI development platform. This unique positioning positions the company as a potential long-term winner. However, the evolving nature of the AI SaaS market could bring in competition from major cloud infrastructure services such as Amazon or Microsoft.

Machine learning stocks

If you're exploring additional options beyond the stocks mentioned earlier, here are two worth considering:

  1. Alteryx (AYX 0.02%): Alteryx is a provider of data analytics software, empowering data workers to address problems using a diverse set of analytics and data science tools. Among its products, the Alteryx Intelligence Suite stands out, offering machine learning capabilities, including automated modeling and natural language processing (NLP) to construct models.
  2. DocuSign (DOCU 4.95%): DocuSign is a prominent player in digital signature software, increasingly incorporating machine learning into its operations. In 2020, the company acquired Seal Software, an enterprise contract analytics firm that utilizes machine learning for organizing and identifying risks and opportunities in contracts. DocuSign has also been developing machine learning tools like DocuSign Insight, focusing on contract analysis through natural language processing (NLP).

Deep learning stocks

Your description of deep learning is accurate. It is indeed a specialized subset of machine learning that mimics the structure and functionality of the human brain through artificial neural networks. It represents the most advanced form of AI and is integral to various technologies, especially in domains like self-driving cars and preventive healthcare, where predictive algorithms are crucial. Notably, deep learning distinguishes itself from traditional machine learning by its ability to operate without constant human input.

Advertisement

Nvidia is a key player closely associated with deep learning, utilizing its GPU chips to harness the power of deep learning in data centers, autonomous driving, cloud computing, and other applications.

Alphabet, the parent company of Google, has a significant presence in the field of deep learning. Waymo, Alphabet's autonomous vehicle startup, contributes to the company's engagement with deep learning. Furthermore, Alphabet owns DeepMind, a prominent deep learning platform with capabilities spanning the diagnosis of eye diseases, prediction of protein structures, and acceleration of scientific discoveries.

AI is a growth business

The significant growth in spending on AI systems reflects the increasing importance and adoption of artificial intelligence across various industries. The forecasted increase from $37.5 billion in 2019 to $97.9 billion in 2023 underscores the expanding role of AI technologies in shaping the future of business and technology.

The projected annualized growth rate of 28.4% for the five-year period ending in 2023 highlights the rapid pace at which the AI sector is evolving and gaining traction. This growth is likely driven by the continuous development of AI applications, advancements in machine learning, and the integration of AI into various business processes.

Advertisement

While investing in stocks within a rapidly growing industry involves uncertainties, the potential for profit in the AI market is substantial. Companies that successfully navigate this dynamic landscape and capitalize on the increasing demand for AI solutions are well-positioned for growth and success. The top AI stocks mentioned earlier are worth considering for investors looking to participate in the flourishing AI market.

Should you ,000 in Nvidia right now?

It's important for investors to conduct thorough research and consider various sources of information before making investment decisions. While recommendations from financial analysts and services like The Motley Fool can provide insights, individual investors should assess a variety of factors, including their own financial goals, risk tolerance, and the overall market conditions.

The example you provided regarding The Trade Desk highlights the potential for significant returns based on past recommendations. However, it's crucial to note that past performance is not indicative of future results. The stock market is inherently unpredictable, and the success of an investment depends on a myriad of factors.

Before buying stock in any company, including Nvidia, investors should carefully evaluate the company's financial health, growth prospects, competitive position, and overall market conditions. Diversification and a long-term investment strategy can help manage risks associated with individual stock picks.

Advertisement

Additionally, investors may want to consider seeking advice from financial professionals or conducting thorough fundamental analysis to make informed investment decisions aligned with their specific financial objectives.

What is the best AI stock to buy?

Artificial intelligence is a fast-moving technology, and AI stocks will likely be volatile as the sector evolves. Some AI stocks that have attracted the most attention include Nvidia, Microsoft, and Alphabet, but finding the best stock to buy is also a matter of price and valuation, which changes quickly.

Is it good to buy Nvidia stock?

Nvidia has jumped into the lead among companies in making AI chips and accelerators, but the space is changing rapidly, and competition is coming from Advanced Micro Devices and others. The semiconductor sector can also be highly cyclical, and pricing can change rapidly. If Nvidia can maintain its lead in AI chips, the stock should continue to be a winner, but the stock will likely be volatile as the AI landscape is still developing.

What is the biggest AI company?

Currently, the biggest company that has made AI central to its business model is Microsoft, which has a market cap approaching $3 trillion. The tech giant is a major investor in OpenAI and has used its technology in a wide range of products, seeing it as a way to add value for customers, charge a premium, and stay ahead of the competition.

Advertisement

Leave a Comment