Without a doubt, many artificial intelligence (AI) investors are kicking themselves for missing out on Nvidia’s big gains, thinking which other AI stocks are profitable to buy. There are many besides Nvidia that are few of the top AI socks to invest in. Artificial intelligence, automation and robotics are changing nearly every industry. AI is changing the face of every sector in the market. In the past year, the world got a firsthand look at remarkable advances in AI technology from OpenAI, Microsoft and Google. The AI stocks performed quite well in 2023 and are still trending in 2024.
One should understand that when thinking of which AI stock to invest in there is so much more than semiconductors. With the breadth of AI investing options, the industry should continue to bring opportunity. For example, the mortgage finance company Rocket Companies, Inc. (NYSE:RKT) uses AI for mortgage banking, underwriting, and servicing. In 2023, The company piloted an AI virtual assistant with 325 mortgage bankers and outbound client calls.
Artificial intelligence revolution
The artificial intelligence (AI) revolution has hit the ground running since last year, and there seems to be no end in sight to it in the near future.
It’s no surprise, then, that the Nasdaq CTA Artificial Intelligence & Robotics Index, a benchmark for the AI industry as a whole, is up about 12% in the last year. AI technology gave a boost to a range of AI companies. One of the top AI stocks that gained good profits were The Invesco Dynamic Software ETF (IGPT) that gained over 30% in 2023 compared to the S&P 500’s 25% growth.
Best opportunity to earn with AI stocks?
At a macro level, generative AI remains a priority spending area for companies. After all, AI is powering some of the most profound innovations in multiple sectors. Automatic video generation, molecule development, advanced driver assistance systems (ADAS), robotic process automation and battlefield intelligence are all technologies being powered by AI.
The AI trade is alive and well, as Nvidia’s (NASDAQ:NVDA) earnings proved on February 21. It was one of the most awaited earnings reports this earnings season. Fortunately, the chip maker, regarded as the bellwether of AI stocks, delivered solid results.
Companies are seeing tremendous opportunities to lead this revolution and are investing heavily. They are investing in AI infrastructure and buying chips required for training and inference. Some are directing computers and talent to develop large language models and applications that leverage AI. These investments have created a once-in-a-generation opportunity for some AI stocks.
Which are the best AI stocks to buy?
The following top 4 AI stocks have set themselves apart as leaders and will continue to do so in 2024. Their quarterly results were beyond expectations and highlighted their AI growth stories which were secular.
Nvidia (NVDA)
One of the best AI stocks to buy without a doubt is high-end chipmaker Nvidia which provides the massive processing power needed to run advanced AI applications. Nvidia was the best-performing stock in the entire S&P 500 in 2023, and shall continue the run through 2024. It is largely due to the company’s AI exposure.
On February 21, 2024, Nvidia reported another stellar quarter exceeding consensus estimates. The company reported record Q4 FY2024 revenues of $22.1 billion, beating analysts’ consensus estimates by $1.48 billion. The revenue number represented an impressive 265.3% year-over-year (YoY) growth rate.
Microsoft Corp. (MSFT)
After announcing a $1 billion investment in ChatGPT maker OpenAI in 2019, Microsoft increased its investment to $13 billion in January 2023 and integrated ChatGPT into its Bing search engine shortly thereafter. In September 2023, Microsoft announced it is integrating its AI products into a single AI experience called Microsoft Copilot. OpenAI has reportedly recently made impressive breakthroughs with its new AI model called Q* (pronounced “Q star”). Analyst Joseph Bonner says Microsoft’s dividend is safe and its ongoing investments in cloud services and AI position the company for long-term growth.
Alphabet Inc. (GOOG, GOOGL)
Google and YouTube parent company Alphabet uses AI and automation in virtually every facet of its business, from ad pricing to content promotion to Gmail spam filters. Google launched its Bard AI chatbot in March 2023. In September, Google integrated Bard into its full suite of tools, including YouTube, Google Drive and Google Flights. In December, Google announced Gemini, its most capable AI model that incorporates different types of media.
Amazon.com Inc. (AMZN)
Amazon has integrated AI into every aspect of its business, including targeted advertisements, marketplace search and recommendation algorithms, and Amazon Web Services. The company offers a wide range of AI and machine learning services to its cloud customers, including advanced text analytics, automated code reviews and chatbots. In September, Amazon integrated generative AI capabilities into its Alexa personal assistant that allows it to express opinions. Analyst Jim Kelleher says the integration of AI technology may be a shot in the arm for Amazon’s slowing AWS growth.
More AI stocks list to invest in
Other than the above four, for investors which other AI stocks to buy. Here is the list of few best AI stocks that one can invest in and would be profitable:
- Taiwan Semiconductor Manufacturing Co. Ltd. (TSM)
Taiwan Semi recently said demand for high-end AI chips will help fuel 20% revenue growth for the company in 2024,
- Adobe Inc. (ADBE)
Alexandru Costin, the company’s vice president of generative AI, told TechRadar that Adobe is transitioning from a software company to an AI company. As per analysts generative AI investments will help Adobe rapidly expand its total addressable market.
- ASML Holding NV (ASML)
ASML is the only major producer of the extreme ultraviolet (EUV) lithography equipment necessary to produce advanced AI chips. As per its CEO, demand for premium tier edge devices and generative AI applications will accelerate ASML’s EUV equipment sales growth in 2024 and 2025.
- International Business Machines Corp. (IBM)
For years, IBM has been developing ways to adapt its AI supercomputer Watson to revolutionize health care, finance, law and academia.
- Palantir Technologies (PLTR)
After the latest earnings report, Palantir Technologies (NYSE:PLTR) received widespread praise from Wall Street. The company has leaned into the AI moment by conducting AIP boot camps.
- Super Micro Computer (SMCI)
Over the past year, one of the best-performing AI stocks has been Super Micro Computer (NASDAQ:SMCI) up over 992%. The firm is seeing soaring demand for its AI plug-and-play servers. With unparalleled demand and market share gains, Super Micro is one of the best AI stocks.
AI stocks present investors with the opportunity to tap into one of the most popular technology trends today. With companies across virtually all industries and sectors exploring ways to integrate AI into their operations, firms that are focused on the hardware and software required to run AI programs stand to benefit. Knowing which AI stock to buy becomes of utmost importance as there are significant risks to investing in AI stocks, including the uncertain future of the industry and the potential dangers of AI technology itself.
