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What a difference a year makes. While fears of an economic downturn triggered a dramatic sell-off in tech stocks in 2022, the artificial intelligence (AI) boom has reignited investor optimism in 2023. Countless tech companies’ stocks have surged this year, with their gains primarily driven by their prospects in AI.

The launch of OpenAI’s ChatGPT late last year highlighted how far the technology had come, with the potential to advance numerous industries, from consumer products to healthcare, manufacturing, education, and more. According to Grand View Research, the AI market hit $137 billion in 2022 and is projected to expand at a compound annual rate of 37% through 2030.

Even as many companies have pivoted their businesses to AI development this year, the sector still has much to offer new investors. As the proverb goes, “The best time to plant a tree was 20 years ago. The second-best time is now.” It’s not too late to profit substantially from this budding market, and there’s no time like the present.

So, here are three top artificial intelligence stocks to buy right now.

1. Advanced Micro Devices

The debut of ChatGPT sent Nvidia shares skyrocketing thanks to its lucrative role as primary supplier of the chips that allow the platform to operate. However, its success also highlighted how far behind Advanced Micro Devices (NASDAQ: AMD) had fallen in AI. As a result, AMD has doubled down on its AI expansion in 2023, making various acquisitions and developing the technology needed to challenge Nvidia’s dominance next year.

The company will begin shipping what it calls its most powerful graphics process unit (GPU) ever in 2024, a chip meant to compete directly with Nvidia’s offerings. AMD has big hopes for the new chip as the market is in desperate need of competition. AI-minded companies have been calling for alternatives to Nvidia’s chips for months as more options and supply should reduce the cost of AI chips.

In AMD’s third-quarter earnings call on Oct. 31, CEO Lisa Su said that the company expects to hit about $400 million in data center GPU revenue in Q4. However, it projects that figure will exceed $2 billion in 2024 as its AI chip sales soar.

AMD has massive potential in AI over the long term, and its stock is a compelling option ahead of the company’s AI chip launch.

2. Microsoft

Microsoft (NASDAQ: MSFT) has emerged as one of the most exciting AI companies this year, and offers arguably the most earnings potential in the industry over the long term. It was an early investor in AI, sinking $1 billion into OpenAI in 2019. Microsoft has since increased that figure by $10 billion, taking a 49% stake in the start-up.

OpenAI’s technology, paired with potent Microsoft brands such as Office and Azure, could be a winning combination that presents endless earning opportunities. As businesses and consumers increasingly look for ways to boost efficiency with the help of AI, Microsoft could become a go-to provider as it continues to add AI tools across its popular product lineup.

The tech giant is already seeing promising growth thanks to AI. In its fiscal 2024 first quarter, which ended in September, Microsoft’s revenue increased by 13% year over year, exceeding Wall Street forecasts by close to $2 billion. That rise came alongside a 13% bump in productivity revenue and a 19% increase in cloud sales.

Microsoft is gradually making moves to monetize its AI expansion and has solid prospects with the millions of users its services attract and access to OpenAI’s AI models.

3. Amazon

Like AMD, Amazon (NASDAQ: AMZN) started the year on the back foot. In its case, the challenge was the head start that Microsoft had in AI. However, it has used its vast financial resources and dominance in cloud computing to carve out a powerful position in the AI space.

Amazon owns the world’s biggest cloud infrastructure platform with Amazon Web Services (AWS), serving prominent clientele such as Meta Platforms, Sony, and Netflix. Meanwhile, it is rapidly expanding its AI cloud services, adding a range of new tools this year to meet the growing demand for such features.

In addition to AI potential in the cloud market, Amazon’s research in the industry will likely offer a boost to its e-commerce business. The company has used AI tools for years for tasks such as tracking shopping trends, recommending products to customers, and improving shipping logistics. Amazon’s developing AI tech will likely help the company retain its dominance in online retail and profit from the sector’s long-term growth.

Amazon is on a promising growth trajectory, outperforming analysts’ revenue estimates by more than $1.5 billion in Q3 as sales rose 13% year over year. That growth was primarily provided by the company’s North American and international segments, which posted revenue increases of 11% and 16%, respectively. Alongside an expanding venture into AI, the company could be unstoppable in the coming years, and you won’t want to miss out.

10 stocks we like better than Advanced Micro Devices
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Dani Cook has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Amazon, Meta Platforms, Microsoft, Netflix, and Nvidia. The Motley Fool has a disclosure policy.

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