Which Chat GPT Stock Should You Buy? (Best Chat GPT Stocks)

At the moment, it’s not possible to buy Chat GPT stock, as the company that created it, OpenAI, is not publicly-traded. However, you can buy stocks like Microsoft and Nvidia, which could perform well if Chat GPT continues its explosive growth.

What is Chat GPT and why would you want to invest in it?

Chat GPT is a chatbot powered by artificial intelligence (AI) that was initially released as a prototype in November of 2022. Chat GPT is based on GPT-3.5 and GPT-4, which are large language models (LLMs) created by OpenAI.

Immediately after its release, Chat GPT impressed experts and laymen alike with its ability to create impressively detailed text. The chatbot can assist users in a variety of tasks such as writing, translations, coding, learning about new topics, and more.

Chat GPT has almost single-handedly caused a huge spike in public interest for artificial intelligence and its implications for society, and has put significant pressure on tech giants like Google and Meta to accelerate their work on AI technologies.

As of the time of writing, Chat GPT is accessible to users who create a free account. The free version is based on the GPT-3.5 model, but OpenAI also offers a premium version that utilizes the more powerful GPT-4 model. 

How to invest in Chat GPT stock?

Chat GPT isn’t publicly traded, since OpenAI is a private company. So, the public doesn’t have a way of investing in OpenAI or Chat GPT directly. However, there are stocks that are likely to benefit from the growth of Chat GPT and artificial intelligence more broadly. 

Microsoft (MSFT)

Arguably, the most direct way of getting exposure to OpenAI and its products is by investing in Microsoft. This is because Microsoft is a major investor in OpenAI, and is integrating it in products like Bing, Edge, Azure OpenAI, Microsoft 365 and more. 

Microsoft invested $1 billion into OpenAI in 2019, and then made another investment into the company in 2021. In early 2023, Microsoft announced that it was investing an additional $10 billion into OpenAI. Reports have stated that Microsoft was looking to acquire a 49% stake in OpenAI, but this hasn’t been confirmed so far.

Microsoft is currently the second largest company if the world. With a market capitalization of $2.2 trillion, Microsoft is only surpassed by Apple, another US-based tech titan. Microsoft has been a strong performer as of late, as it’s posting a +23.6% year-to-date growth at the time of writing. Will Microsoft continue to climb? Check out our Microsoft price prediction page for MSFT stock forecasts.

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Nvidia (NVDA)

You could also get exposure to the growth of Chat GPT by investing in NVIDIA. This is because NVIDIA’s graphics processing units are heavily used in the training of OpenAI’s GPT models. In addition to being used by OpenAI, NVIDIA is also set to benefit from the growth of artificial intelligence technology as a whole.

The spike in interest for AI technology has been one of the catalysts for Nvidia’s impressive rally in 2023. As of April 26, 2023, NVDA has seen a 90% increase in the price of its stock on a year-to-date basis. If you’re interested in possible scenarios for NVDA stock’s future, check out our Nvidia price prediction page.

Nvidia is currently the seventh largest company in the world, thanks to a market capitalization of $672 billion. 

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Alphabet Inc (GOOG)

Investing in Alphabet Inc, the parent company of Google, could also be a good play if you think technologies like Chat GPT will become increasingly lucrative in the future. Google has been investing in artificial intelligence technology for a long time, and established a division dedicated to AI in 2017.

Google has released its own AI-powered chatbot called Bard in response to the meteoric rise of Chat GPT. Bard is based on the LaMDA family of large language models (LLMs). It is widely considered as one of the best alternatives to ChatGPT thanks to its fast response times and the ability to generate visual content.

Although OpenAI’s Chat GPT chatbot is currently more powerful than Bard, it would be foolish to underestimate Google in the field of artificial intelligence. In addition, Google is gradually introducing new functionality to Bard — in April 2023, Bard received an upgrade that made it capable of generating code in more than 20 programming languages.

At the time of writing, Alphabet Inc is the fourth most valuable company in the world, boasting a market capitalization of $1.3 trillion.

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AI ETFs

There’s a number of ETFs (exchange-traded funds) that give investors exposure to the artificial intelligence sector. These investment products provide diversified exposure, which can be a benefit depending on your preferred investing approach.  

Some examples of ETFs that invest in AI-related companies include Global X Robotics &  Artificial Intelligence ETF, iShares Robotics and Artificial Intelligence ETF, WisdomTree Artificial Intelligence UCITS ETF, and Xtrackers Artificial Intelligence and Big Data UCITS ETF.

One thing to keep in mind is that different AI ETFs can vary quite significantly in terms of what is considered AI and which companies they invest in. Unlike S&P 500 ETFs which are designed to track the S&P 500 index, the methodology of AI ETFs varies a lot from product to product.

C3.ai (AI)

C3.ai is a company that provides AI-powered software for enterprise customers. The company’s AI solutions are used across a broad spectrum of industries, ranging from manufacturing and utilities to healthcare and financial services.

C3.ai’s biggest customer at the time of writing this article is oil company Baker Hughes, which was the source of almost a third of C3.ai’s revenue in the most recent quarter. The company has worked with major players such as Shell, Raytheon and Koch, as well as the U.S. Army and the U.S. Air Force.

C3.ai’s product suite is divided into three main lines: 

• C3 AI Applications – A variety of applications specialized for use cases such as CRM, energy management, inventory optimization, demand forecasting and more
• C3 AI Platform – A platform that allows enterprises to build and deploy their own AI-powered applications
• C3 Generative AI – AI-powered knowledge source for enterprise clients

The company trades on the New York Stock Exchange under the ticker AI, and has a market capitalization of roughly $3.3 billion. 

Pegasystems (PEGA)

Pegasystem is a United States-based software company that was founded in 1983. Today, the company is primarily known for its low-code platform powered by AI, which allows customers to create applications with as little coding required as possible. Pegasystem provides tools for CRM (customer relationship management), customer onboarding, streamlining operations and other use cases.

Pegasystem’s solutions are used in a variety of industries, including financial services, insurance, healthcare, communications and many others. The company’s products have been used by Citi, HSBC, and even U.S. government agencies such as the FBI and the ATF. 

Pegasystems went public in 1996 on the NASDAQ stock exchange under the ticker PEGA. The company currently commands a market capitalization of about $3.8 billion, although PEGA stock took a massive nosedive throughout 2022. 

The bottom line — You can’t invest directly in Chat GPT stock, but you can invest in AI

Investing in OpenAI and Chat GPT is currently not possible for retail investors, since OpenAI is a privately held company. However, there’s still ways to indirectly get exposure to the growth of Chat GPT. 

You could invest in Microsoft, which owns a significant share of OpenAI, or Nvidia, which provides much of the infrastructure that makes Chat GPT possible. Alternatively, you could invest in companies like Google which are building their own competitors to Chat GPT, or exchange-traded funds that are designed to provide exposure to the artificial intelligence sector as a whole.

For more investment ideas, you can check our selection of the best AI stocks to buy in 2024.