7 Top Artificial Intelligence Companies to Invest in 2024

7 Best Artificial Intelligence Stocks of 2024

Top artificial intelligence companies to invest in

Artificial Intelligence (AI) has suddenly become ubiquitous. You can thank the company ChatGPT for sparking the current wave of interest in AI applications in November 2022. The startup behind ChatGPT is called OpenAI, and the company earned a valuation of $29 billion amid the surge of interest in its AI mechanism.

For investors willing to take risks, AI stocks could be the next big thing. Just be aware that other hot new technological trends, such as cryptocurrency and the metaverse, haven't always yielded good results for investors in recent years. The risks of investing in AI stocks are high.

If you're ready to take the risk, here are seven of the best AI stocks to consider. Keep in mind that there are a million different ways to use AI, so many of the stocks we've chosen are household names that are embracing this rapidly evolving technology rather than pure AI plays.

Microsoft Corp. (MSFT)

Microsoft is the second-largest company in the world by market capitalization, and it views artificial intelligence as a crucial part of its future. The company has made several investments in OpenAI, the latest being $10 billion following the launch of ChatGPT.

Microsoft's long-term partnership with OpenAI is part of the company's broader push into the field of AI. The company recently integrated AI into its Bing search engine and Edge browser, and it seems that MSFT's use of this advancing technology will only expand.

Amazon.com Inc. (AMZN)

Amazon is integrating artificial intelligence technology into its entire business. The most prominent examples of AMZN's AI efforts are the Alexa voice-controlled technology and the automated Amazon Go grocery stores.

But Amazon also uses AI under the hood. Its wildly successful Amazon Web Services, with revenue of $80 billion in 2022, employs AI for various functions. One notable example is Amazon SageMaker, a machine learning tool that can be used by data engineers and developers.

Nvidia Corp. (NVIDIA)

Nvidia, the chip manufacturer, is another major tech company through which you can access AI, and it may be an even more lucrative play in the market than many other options on this list.

Graphics Processing Unit (GPU) chips from Nasdaq are crucial for various stages of machine learning as they typically require immense computational power.

This has led to Nvidia holding a key position in the world of artificial intelligence. In particular, its A100 chip commands a significant share of the artificial intelligence market, becoming one of the most crucial hardware components in the entire industry.

Nvidia had a successful first quarter, with its stock price sharply rising after the company's earnings exceeded expectations. The company even stated that it is reaping substantial benefits from the boom in the field of artificial intelligence.

C3.ai Inc (AI)

C3.ai stands out from other companies on this list as a pure AI play - meaning the company is entirely focused on artificial intelligence applications. Just look at its name and ticker symbol.

Instead of manufacturing chips or investing in AI, C3.ai's business is built around AI itself. The company offers Software as a Service (SaaS), allowing companies to leverage artificial intelligence for their specific needs.

However, these stocks come with increased risk. C3.ai has not yet turned a profit. One common criticism of artificial intelligence and technology startups, in general, is that profitability can be challenging to achieve. The market value of C3.ai is also significantly lower than other companies on this list. While the company's stocks have more than doubled this year, the risks are undoubtedly high.

Alphabet Inc. (GOOGL)

Tech giant Google and its parent company, Alphabet, are also not staying behind in the AI craze. Google's cloud computing platform offers a suite of AI products, and the company claims that "AI is in our DNA." Alphabet has launched its own chatbot, Bard, which will compete with OpenAI's ChatGPT, and it is currently being tested in the US and the UK.

The presentation of Bard in February demonstrated both the emergence of AI and the risks for investors. The chatbot made a mistake in a promotional video, and GOOGL shares dropped by 9% after the company's event also failed to impress investors.

Google has been criticized for not integrating AI into its search system quickly, but it seems the company will pay more attention to this area in the future.

Micron Technology Inc. (MU)

Micron Technology is another indirect way to bet on artificial intelligence.

The company manufactures memory chips that are actively used in artificial intelligence. Many AI processes require a large amount of memory due to the enormous volumes of data they generate. In theory, this should increase the demand for Micron chips.

However, as is known, the demand for memory chips is unstable, and this also affects Micron's stocks. In December, the company announced a 10% workforce reduction and warned that "profitability will remain a question mark throughout 2023."

The company remains hopeful that further development of artificial intelligence will help boost demand for its products in the long term, but for now, investors will have to contend with stock price fluctuations.

Tesla Inc. (TSLA)

"The goal is not to be a car company," said Tesla's controversial CEO, Elon Musk, once, and Tesla's choices confirm this statement. Currently, the company is expanding its presence in the field of artificial intelligence.

Although Tesla cars are not yet fully autonomous, they still use artificial intelligence to make a range of autonomous driving decisions. It is planned that this experience will deepen in the future, which will also bring Tesla into the world of robotics.

As always with Tesla, its critics will point out one thing: despite its confident CEO claiming otherwise, it is indeed an automotive company. This means it has to sell cars.

Therefore, despite diving into artificial intelligence, Tesla's profit margin and ultimately its stock price still depend on customers buying its electric vehicles.

Methodology

This methodology aims to identify companies influenced by the rapidly evolving field of artificial intelligence.

All these companies have been able to take advantage of the favorable conditions that have developed this year for the stocks of technology companies. Although many of them are major companies that do not need introduction, some of them are less significant and exhibit greater volatility.

As investors saw in 2022, these stocks are characterized by high volatility and increased risk. The list is based only on companies with positive and growing revenues over the past three years, in part because positive revenues are not always easy to find among new technology companies.

In 2022, most of these stocks experienced significant declines. If investors want to enter this unstable arena, the best option is a prudent allocation of stocks within a diversified portfolio.