Artificial intelligence (AI) is one of the most disruptive and transformative technologies of our time. It has the potential to revolutionize various industries, such as health care, finance, retail, manufacturing, and entertainment. AI can also create new opportunities for innovation, growth, and efficiency.
According to a report by Grand Next Move Strategy Consulting, the global AI market size is expected to reach $2 trillion by 2030, growing twentyfold from $100 billion in 2023. The report cited chatbots, image-generating AI, and mobile applications, as the major AI trend in the coming years.
In this article, we are going to examine what are the best AI stocks to buy in 2023 based on the potential for long-term growth, estimated earnings per share, and other performance indicators.
Here are 10 of the best AI stocks to buy now, based on the consensus opinion of most analysts and experts, and a combination of technical and fundamental factors:
| Stock | Stock Price | Market Cap | EPS (2022) | Projected EPS (2023)* |
|---|---|---|---|---|
| Microsoft | $325.29 | $2420 bln | $6.71 | $9.65 |
| Nvidia | $385.22 | $951.5 bln | $1.74 | $7.78 |
| Amazon | $124.32 | $1280 bln | $-0.27 | $1.58 |
| Alphabet | $122.67 | $1550 bln | $4.56 | $3.44 |
| Tesla | $234.85 | $744.4 bln | $1.93 | $3.44 |
| UiPath | $18.27 | $10.3 bln | $0.15 | $0.34 |
*Source: Yahoo Finance
The 6 best AI stocks to buy: Examining top artificial intelligence investment picks in 2023
If you are wondering what are the best stocks to buy to gain exposure to the rapidly growing artificial intelligence sector,
1. Microsoft Corporation (NASDAQ: MSFT)
Microsoft is a software giant that offers popular products and services, such as Windows, Office, Azure, Xbox, and LinkedIn. Microsoft uses AI and machine learning to improve its offerings, such as speech recognition, natural language processing, computer vision, and gaming.
Microsoft is also a leader in cloud computing, which is a key enabler of AI. Its Azure cloud platform offers various AI services and tools for developers and researchers to create and deploy AI solutions across various domains, such as health care, finance, retail, and manufacturing.
Microsoft has been investing heavily in AI research and development, acquiring several AI startups and launching new AI initiatives, such as the Microsoft AI for Good program and the Microsoft AI for Health program. Microsoft has also invested $10 billion in OpenAI, the company behind the extremely popular ChatGPT chatbot. Aggressive investment in AI could drive significant long-term growth for MSFT.
Microsoft reported $198 billion in revenue and $72 billion in net income in fiscal year 2022. Its commercial cloud segment, which includes Azure and other cloud-based products and services, surpassed $100 billion in annualized revenue for the first time. Microsoft’s AI revenue is not disclosed separately, but it is estimated to be a significant contributor to its overall growth.
Microsoft is one of the best AI stocks to buy in 2023 because it has a strong competitive advantage and a diversified revenue stream. Microsoft’s stock price has increased by more than 20% in the past year and is expected to increase to $355 in by the end of this year.
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2. Nvidia Corporation (NASDAQ: NVDA)
Nvidia is a semiconductor company that designs and manufactures graphics processing units (GPUs), which are specialized chips that not only run gaming engines but can also accelerate the performance of AI and machine learning applications. Nvidia also offers software platforms and tools for developers and researchers to create and deploy AI solutions across various domains, such as gaming, automotive, health care, and robotics.
Nvidia is a leader in the GPU market, with a dominant share of the gaming and data center segments. Nvidia’s GPUs are used by some of the world’s largest cloud service providers, such as Amazon, Microsoft, Google, and Alibaba, to power their AI services and offerings. In addition, Nvidia is one of the largest hardware suppliers for OpenAI, making it one of the potential stocks to buy to invest in ChatGPT.
Nvidia reported revenue of $7.64 billion for the fourth quarter of fiscal 2022, up 53% from a year ago and up 8% from the previous quarter. Its gaming segment revenue was $3.06 billion, up 49% year-over-year, driven by strong demand for its new ADA architecture GPUs. Its data center segment revenue was $2.91 billion, up 81% year-over-year, driven by strong demand for its AI products and services.
According to Yahoo Finance, experts expect Nvidia to earn $$7.78 per share in 2023, up from $1.74 in 2022. Also, the company might soon join the elite $1 trillion market cap alongside Apple, Microsoft, Alphabet, and Amazon.
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3. Amazon, Inc. (NASDAQ: AMZN)
Amazon is an e-commerce behemoth that also operates businesses in cloud computing, digital streaming, devices, and artificial intelligence. Amazon uses AI and machine learning to power its online retail platform, such as product recommendations, pricing optimization, fraud detection, and customer service.
Amazon is a leader in cloud computing, which is a key enabler of AI. Amazon’s AWS cloud platform offers various AI services and tools for developers and customers to create and deploy AI solutions across various domains, such as health care, finance, retail, and media. AWS is the largest and most profitable cloud provider, with over 30% of the global cloud infrastructure market share in 2022. AWS also has a strong competitive advantage, with a high switching cost, a large network effect, and constant innovation.
Amazon uses AI to enhance its suite of products by providing personalized recommendations based on individual preferences, purchase history, and browsing behavior, using AI chatbots and virtual assistants to enhance customer experience, improving warehouse operations with robots and computer vision, and more.
According to analysts, Amazon is expected to earn $1.58 per share in 2023, up from $-0.27 in 2022. A diversified portfolio of products and services and a strong presence in the AI sector could help drive long-term growth for Amazon.
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4. Alphabet (NASDAQ: GOOG)
Alphabet is the parent company of extremely popular web services like Google and YouTube. Alphabet is one of the leaders in AI research and development, and uses AI in various products and services, such as search, advertising, cloud computing, image and speech recognition, and more.
Alphabet’s Google Search and YouTube platforms use AI and machine learning to deliver relevant and personalized ads to users. Its Google Ads and Google Marketing Platform products use AI and machine learning to help advertisers optimize their campaigns and measure their effectiveness.
Alphabet is also a leader in the cloud computing market, which is a key enabler of AI. Its Google Cloud platform offers various AI services and tools for developers and customers to create and deploy AI solutions across various domains, such as health care, finance, retail, and media.
Alphabet has been investing heavily in AI research and development, acquiring several AI startups and launching new AI initiatives, such as the Google Brain team and the Google AI Quantum team. In addition, the new AI-powered Bard chatbot, which is currently in beta testing, is Alphabet’s answer to Microsoft’s ChatGPT-powered Bing.
Alphabet reported revenue of $282.8 billion for the fiscal year 2022, up 10% from a year ago. Its Google segment revenue was $279.8 billion, up 11% year-over-year, driven by strong growth in its advertising and cloud businesses. Analysts are projecting Alphabet to earn $5.33 per share this year, up from $4.56 in 2022.
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5. Tesla (NASDAQ: TSLA)
Tesla is an electric vehicle (EV) company that also operates businesses in battery technology, solar energy, and artificial intelligence. It uses AI and machine learning to power its self-driving cars, which are among the most advanced and popular in the market (although they are still quite far from full autonomy). Tesla reportedly also uses AI and machine learning to optimize its battery performance, energy management, and manufacturing processes.
Tesla is a leader in the EV market, which is a key driver of AI. Its EVs feature a full self-driving (FSD) system that uses AI and machine learning to navigate complex road scenarios and traffic conditions. Its FSD system also enables its robotaxi service, which allows Tesla owners to share their cars with other users and earn income.
Tesla sold more than 1.3 million EVs in 2022, which is a record high for the company. In addition, the number of electric vehicles is projected to increase significantly in the coming years, making TSLA a potentially good long-term investment due to its dominant position in the EV market.
Tesla reported revenue of $24.3 billion for the fourth quarter of 2023, up 35% from a year ago. Its automotive segment revenue was $22.5 billion, up 40% year-over-year, driven by strong demand for its Model 3 and Model Y vehicles.
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6. UiPath Inc. (NYSE: PATH)
UiPath is a software company that provides a cloud-based platform for enterprise automation. UiPath uses AI and machine learning to help customers automate various business processes, such as finance, accounting, human resources, customer service, and IT. UiPath also offers AI services and tools for developers and customers to create and deploy AI solutions across various domains, such as document understanding, computer vision, and natural language processing.
UiPath went public in April 2021. It raised $1.3 billion in an initial public offering (IPO) on the New York Stock Exchange (NYSE), making it one of the most successful IPOs in Wall Street History. The company’s valuation reached $35 billion in 2021, up from$1.1 billion just three years prior.
UiPath is a leader in the robotic process automation (RPA) market. Its RPA platform enables customers to build, manage, and run software robots that can mimic human actions and interact with various applications and systems. Its RPA platform also integrates with other AI technologies, such as conversational AI, machine learning, and cognitive automation, with the aim of automating repetitive digital tasks normally performed by people
UiPath reported revenue of $289 million for the first quarter of 2023, up 18% from a year ago. Its annual revenue in 2022 was $1.06 billion, up 13% year-over-year. According to analysts, PATH has an average recommendations score of “Buy”.
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The bottom line: These are the best AI stocks to buy now
The artificial intelligence sector is one of the quickest-growing industries right now. The growth potential of AI is apparent to regular consumers, regulators, and investors alike. While no one knows for sure how AI tech will shape the future, virtually everyone agrees that we are at ehe cusp of massive changes. With that said, here are companies that are key actors in the AI revolution:
- Microsoft – A leading software, cloud computing, and web search company
- Nvidia – The world’s most valuable semiconductor manufacturer
- Amazon – The world’s leading e-commerce and cloud computing company
- Alphabet – The world’s biggest search engine and online advertising company
- Tesla – The leading electric vehicle manufacturer and renewable energy company
- UiPath – A robotic process automation software development company
If you are interested in building a more diversified stock portfolio that isn’t focused solely on AI, check our selection of the best stocks to buy in 2023. For those looking for dividend stocks, check the 12 best long-term “Dividend Aristocrats”.
It is worth noting that the cryptocurrency sector has seen a massive influx of AI-related projects in recent months, with several projects emerging as the best AI coins to buy in 2023.
Source: https://coincodex.com/article/28330/best-ai-stocks-to-buy/