What a change in just one year! In 2022, worries about the economy going down caused a big drop in the value of tech stocks. But now, in 2023, the excitement about artificial intelligence (AI) is making investors feel positive again. Many tech companies’ stocks have gone up a lot this year, mainly because of their potential in AI.
Last year, OpenAI launched ChatGPT, showing how advanced AI has become. It has the potential to improve many industries, like products we use, healthcare, making things, education, and more. According to Grand View Research, the AI market was worth $137 billion in 2022 and is expected to grow by 37% every year until 2030.
While a lot of companies have shifted to developing AI this year, there are still great opportunities for new investors in this sector. As the saying goes, “The best time to plant a tree was 20 years ago. The second-best time is now.” It’s not too late to make significant profits from this growing market, and there’s no better time than the present.
So, here are three excellent stocks in artificial intelligence that you can buy right now.
1. Advanced Micro Devices (AMD)
The introduction of ChatGPT caused Nvidia’s shares to soar because they’re the main supplier of the chips that make the platform work. However, this success also highlighted how Advanced Micro Devices had fallen behind in AI. As a result, in 2023, AMD is focusing more on expanding in AI. They’re acquiring different companies and working on the technology to challenge Nvidia’s dominance next year.
In 2024, AMD will start selling what they call their most powerful graphics processing unit (GPU) ever. This chip is designed to directly compete with Nvidia’s offerings. AMD is optimistic about the new chip because the market really needs more competition.
Companies interested in AI have been asking for alternatives to Nvidia’s chips for months. Having more options and supply should help reduce the cost of AI chips.
During AMD’s earnings call for the third quarter on October 31, CEO Lisa Su mentioned that the company anticipates reaching approximately $400 million in revenue from data center GPUs in the fourth quarter. However, they predict that this number will surpass $2 billion in 2024 as sales of their AI chips take off.
AMD has significant potential in the field of AI in the long run, making its stock an attractive choice, especially leading up to the launch of the company’s AI chips.
2. Microsoft
Microsoft has become one of the most exciting AI companies this year and arguably offers the most potential for earnings in the industry in the long term. The company was an early investor in AI, investing $1 billion in OpenAI in 2019. Since then, Microsoft has increased its investment by $10 billion, now holding a 49% stake in the startup.
The powerful technology from OpenAI, combined with Microsoft’s well-known brands like Office and Azure, could create a successful combination that opens up numerous opportunities for earnings. As businesses and consumers increasingly seek ways to enhance efficiency with the help of AI, Microsoft could become a preferred provider by continually integrating AI tools across its popular product lineup.
The technology giant is experiencing significant growth, thanks to AI. In the first quarter of its fiscal year 2024, ending in September, Microsoft’s revenue rose by 13% compared to the previous year, surpassing Wall Street predictions by nearly $2 billion. This increase was accompanied by a 13% boost in productivity revenue and a 19% rise in cloud sales.
Microsoft is slowly taking steps to capitalize on its expansion in AI, and it has strong potential with the millions of users its services attract and its access to OpenAI’s AI models.
3. Amazon
Amazon, faced challenges at the beginning of the year. In Amazon’s case, the hurdle was Microsoft’s early advantage in AI. However, Amazon has effectively utilized its extensive financial resources and dominance in cloud computing to establish a strong presence in the AI field.
Amazon possesses the largest cloud infrastructure platform globally with Amazon Web Services (AWS), catering to major clients like Meta Platforms, Sony, and Netflix. At the same time, the company is swiftly growing its AI cloud services, introducing several new tools this year to address the increasing demand for such features.
Beyond the potential for AI in the cloud market, Amazon’s research in the industry is likely to positively impact its e-commerce business. For years, the company has been using AI tools for tasks like monitoring shopping trends, suggesting products to customers, and enhancing shipping logistics.
The evolving AI technology at Amazon is expected to help the company maintain its dominance in online retail and capitalize on the sector’s long-term growth.
Amazon is on a promising path of growth, surpassing analysts’ revenue estimates by over $1.5 billion in Q3, with a 13% year-over-year increase in sales. This growth was mainly driven by the company’s North American and international segments, which experienced revenue increases of 11% and 16%, respectively. With an expanding focus on AI, Amazon could be an unstoppable force in the upcoming years, and it’s an opportunity you won’t want to miss.
Summary
In the past year, investing in artificial intelligence (AI) has become a game-changer. Thanks to innovations like OpenAI’s ChatGPT and efforts from companies like Microsoft, AMD, and Amazon, AI is reshaping industries faster than expected. If you’re an investor, now is the time to explore the opportunities in AI and adapt to the changing market.
