What are the five best AI stocks to invest in for 2023?
5 best AI stocks to invest in 2023
Recent breakthroughs in artificial intelligence (AI) signify that we are inching closer to the profound economic and societal transformations anticipated from its widespread application.
As machines become capable of intelligent behaviour, the way tasks are carried out is likely to change. This presents an intriguing prospect for those investing in top-performing AI stocks.
AI has gained considerable attention in 2023. Its rising prominence in public conversations is matched by a noticeable increase in the value of AI stocks. This could be the start of a long-term trend. The AI industry, valued at $93bn in 2022 — a 12% increase — is projected by IBM analysts to grow between 40% to 80% over the next three years.
Chip manufacturers, software developers, and tech giants could all benefit from AI becoming more mainstream. But as with any significant change, there will be winners and losers.
The five firms detailed below offer compelling reasons for investors to consider their shares. Each spans the breadth of the AI industry, having established a unique position. They are striving to become the dominant player in this important growth sector.
C3ai.Inc (AI)
C3ai.Inc provides an extensive portfolio of AI solutions to its customers. Some of these tools empower users to create their own programming, while others are ready-made platforms that deliver an all-in-one solution. This array of services is perfectly suited for companies aiming to embrace and leverage AI’s potential within their specific industries.
The real threat that many conventional businesses face is the risk of being rendered obsolete by AI advancements.
To stay in the competitive race, numerous firms are adopting C3ai.Inc’s ready-to-use AI software suites. These have seen successful implementations in diverse organizations, including the likes of Philips and the US Air Force.
Their financial performance indicators are also showing an uptick. According to the Fiscal Year 2023 Annual Financial Report, the company registered a revenue of $266m, marking a year-over-year growth rate of 5.6%. Learn how to invest in this stock in three simple steps >
Microsoft (MSFT)
Renowned US technology powerhouse, Microsoft, consistently adapts to emerging trends, underscoring CEO Satya Nadella’s assertion that AI is the “pivotal technology of our era.” Classified within the Information Technology sector, Microsoft’s business encompasses computer software, consumer electronics, and cloud services. Its broad spectrum of existing offerings paves the way for the company to capitalize on discoveries made by its AI research team, seamlessly integrating new technologies across its many departments.
The corporation boasts a solid financial foundation and substantial liquidity, making it capable of comfortably investing in cutting-edge technologies. Its Q3 2023 fiscal year revenue tallied up to $52.9bn, showing a 7% year-over-year increase. Strong revenue streams foster continued investment in research and development endeavors, with the company’s Microsoft Research AI team now comprising over 5,000 computer scientists and engineers.
Microsoft’s decision to pour $10bn into Open AI’s Chat GPT product forecasts profitable synergies across other divisions of the corporation. AI start-ups leveraging ChatGPT are likely to find Azure as their preferred platform. Additionally, Microsoft 365 software is poised to benefit from AI-centric enhancements. Learn how to invest in this stock in three simple steps >
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Alphabet (GOOG)
Primarily recognized for its search engine capabilities, tech titan Alphabet, Google’s parent entity, has been defining itself as an “AI-first” corporation since 2018. From 2009 to 2020, the company acquired numerous AI-focused startups, and more recently, it has been introducing an array of AI products, such as Bard and Product Studio, aimed at various segments of the global economy.
Positioned within the Technology Services sector, Alphabet is well-equipped to fully harness AI’s capabilities, given that its offerings – encompassing digital content, advertising, cloud computing, and apps – predominantly interact directly with the end-users.
The financial outcomes for Q1 2023 indicate that certain branches of the corporation are facing challenges. Case in point: YouTube’s advertising revenue dipped to $6.69bn from the previously reported $7.07bn in Q3 of 2022. This dip underscores Alphabet’s focus on AI as a strategic tool for boosting the company’s performance. Learn how to invest in this stock in three simple steps >
NVIDIA (NVDA)
NVIDIA (NVDA), a renowned chip designer, has carved its niche by employing innovative parallel processing technology in GPUs (Graphics Processing Units), solidifying its hegemony in the gaming industry. Even though graphics chips still account for 59% of NVIDIA’s revenue, the company aims to diversify its operations by capitalizing on its technical prowess to make headway in the AI sector.
The company’s classification within the Information Technology sector echoes the diverse range of sub-sectors its various divisions operate in. Particularly appealing to investors is the thriving EV and autonomous vehicles market, where NVIDIA already enjoys a technological advantage, courtesy of its proficiency with GPUs.
Although supply-side issues have put pressure on profit margins in the chip industry, these issues are likely to resolve in due course. Despite the operational challenges, NVIDIA’s headline earnings continue to demonstrate resilience. As per the Q1 2024 fiscal year earnings report, the revenue stood at $7.19bn, exceeding analysts’ expectations of $6.52bn. Learn how to invest in this stock in three simple steps >
Upstart (UPST)
Established in 2012, Upstart Holdings Inc leverages AI technology with the potential to drastically reshape the financial sector. The company’s unique approach employs AI in the loan approval process, allowing non-conventional metrics to aid banks and other financial institutions in making informed lending decisions.
Established in 2012, Upstart Holdings Inc leverages AI technology with the potential to drastically reshape the financial sector.
The company’s unique approach employs AI in the loan approval process, allowing non-conventional metrics to aid banks and other financial institutions in making informed lending decisions.
Being part of the Finance/Consumer Services sector and listed on the NASDAQ exchange, Upstart has earned favor among both borrowers and lenders. The company boasts a stellar 4.9 out of 5.0 rating on Trust pilot and maintains partnerships with 83 different banks and credit unions.
Upstart is still in the nascent stages of its growth trajectory. While it did record a profit in Q3 2021, the most recent earnings report indicates a current loss. Nonetheless, it’s important to highlight that the company’s earnings per share (EPS) have surpassed analysts’ projections in three of the past four quarters. Learn how to invest in this stock in three simple steps >
Investing in AI stocks
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