In December, investors should watch five AI stocks: IBM, Microsoft, Nvidia, and Tesla. These stocks represent the five biggest AI businesses listed in the US. The investing theme of 2023 has been Artificial Intelligence (AI). After what feels like an eternity of disruptive technology, cryptocurrencies, Web3, Blockchain, and the Metaverse, the tech world is finally ready to move on to the next big thing. Artificial intelligence (AI) is quickly overtaking these earlier ideas as the primary motivator for major IT companies, especially now that ultraloose monetary policy is over. In 2023, the S&P 500 has gained nearly all of its value due to the actions of just seven companies—all of which may be riding the AI wave to varying degrees.
But AI might be different from the others. Many different industries are already making use of AI in their day-to-day operations. This includes many more than just the ones listed below, such as the arts, retail, security, manufacturing, self-driving cars, healthcare, warehousing, and entertainment.
We are constantly analyzing every sports event, every Netflix recommendation, and every supermarket rewards buy to bring you more and better data. Even though customers have had a vague idea for some time that AI is doing more and more manual labor, the sector’s investment catalyst has only come. In no time, the OpenAI chatbot ChatGPT attracted over a million users in only five days, serving as the spark in question. Reaching the same milestone took Facebook 10 months and Netflix 3.5 years.
With over 100 million users, it has taken the world by storm and has investors wondering if this breakthrough would render copywriting, accounting, personal training, and software development jobs obsolete. Naturally, there has been some upheaval on OpenAI’s board of directors as of late. Many experts have voiced concerns about potential ethical issues stemming from the increasing power of models.
The investment outlook is cloudy due to high interest rates and the apparent end of quantitative easing. Hundreds of expensive failures follow each ChatGPT breakthrough in the costly field of artificial intelligence development.
Thus, bigger blue chips may be the ideal AI stocks to own—diversifying your portfolio is always a good idea if your AI ventures don’t pan out. Nevertheless, it should be mentioned that there are experts who believe that the significant US equities are part of an artificial intelligence bubble that will burst at some point.
Never assume that a trend will continue just because something has worked in the past. Although these are the top American AI companies, we’ve left out Apple and a few others since experts can’t agree on whether they are AI.
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Top artificial intelligence stock picks
With a market capitalization of $2.84 trillion and as one of the first global computer powerhouses, it is unsurprising that the US juggernaut Microsoft ranks first among the finest artificial intelligence stocks to watch. Before launching ChatGPT, the corporation had a solid relationship with OpenAI, and since 2019, it has invested $13 billion.
Bing, Microsoft’s native search engine, has integrated the chatbot into its services to capture Google’s strangling market share. Microsoft is granting OpenAI access to its cloud centers to boost ChatGPT’s processing power.
Microsoft may soon get its worth since rumors persist that OpenAI is considering an $86 billion IPO following CEO Sam Altman’s return.
- Alphabet
It has a market Capitalization of $1.72 trillion. Even though Alphabet Inc., Google’s parent company, controls 84% of the worldwide search market share, Yahoo was also formerly dominant. When it introduced its competing chatbot, Bard, in 2023, the same year it laid off hundreds of workers, Alphabet made a humiliating gaffe.
The LaMDA programming language, which Bard uses, has been developed by Google since 2021. Despite claims that Bard was rushed to market to compete with ChatGPT, the titan is expected to resolve these difficulties soon.
Keep in mind that many of Google’s present-day operations already make use of AI. It also has DeepMind, an artificial intelligence project it bought in 2014, and its Generative Language API, which is focused on programming.
The market capitalization is worth $1.19 trillion. Nvidia is synonymous with high-end computing, cellphones, and automobiles, among other electronic devices. Nvidia is also one of the most valuable chipmakers in the world. Nvidia’s stock has increased by 235% so far this year, reaching $ 480. The firm’s price-to-equity ratio is 63, which is exceptionally high. Despite this, the most recent quarterly results report was another success.
Even with the release of their most cutting-edge deep learning chips, NASDAQ-listed Nvidia may be cheap. Companies like Alphabet and Meta, the owner of Facebook, are already using them to power AI applications accessible to users and those within the company.
With AI gaining popularity, the demand for these chips is skyrocketing. Moreover, there is a significant economic barrier to entry, giving Nvidia a broad economic moat around its market position as the go-to AI solution. Its chips are so cutting edge that the US government sometimes restricts exports.
The market capitalization is $758M. Although CEO Elon Musk has been in hot water recently due to legal issues and media attention, electric vehicle pioneer Tesla may be able to recover to its late 2021 glory days because of impressive AI developments.
The debut of the Cybertruck has been a recent driver and could drive significant further growth through 2024. The company is eyeing potential expansions in India and Europe, which has led to a 124% recovery in its share price year-to-date.
With the imminent introduction of a robot taxi service, the company aspires to achieve fully autonomous driving in the long run. Also, in development is Optimus, a humanoid robot that Musk believes has the potential to outperform Tesla’s automotive operations in terms of value eventually. Nevertheless, China’s economic slowdown may affect this year’s short-term profitability.
IBM has a current market capitalization of $142B. IBM offers various AI-based services, from mainframe computing to nanotechnology, and is an expert in software and hardware. From 1993 to 2021, it generated more US patents than any other firm, and its 19 locations made it the biggest industrial research firm on the planet.
The corporation just completed the installation of the first “utility-scale” quantum system in the region, a 127-qubit system, at the University of Tokyo. Boehringer Ingelheim, a behemoth in the German biotech industry, has also stated that it will use IBM’s artificial intelligence technologies to speed up its drug discovery processes. Other apps may be on the way.
