Artificial intelligence seems to be everywhere these days. Once upon a time, AI was a thing of science fiction. Now, companies from all sorts of different industries are actively developing and using AI. It only makes sense that investors would want to get in on this record growth.
AI is expected to contribute $15.7 trillion to the global economy in five years. Healthcare, logistics, technology, and entertainment are likely to be the biggest impacted industries, but you have to consider the AI development industry, too.
Out of all these sectors, there are tons of companies that are developing AI or using it in their existing products. It can be hard to figure out which ones are best! Luckily, with just $500, you can gain some exposure to AI and the change it’s likely to bring. We’ll take a look at our nine favorite AI stocks below, giving you plenty of options to choose from.
1. Alphabet (GOOGL)
Alphabet (NASDAQ: GOOGL) is a massive company in the tech industry, so it is no surprise that they have become a leading player in AI, too. They’ve been developing AI for years and have recently started integrating AI into their existing platforms. For instance, you’ll now find AI answers to some Google questions. Google’s voice-activated assistant (aptly named “Google Assistant”) has also had some AI upgrades to help with accuracy.
Alphabet’s cloud platform has also begun offering a range of AI-related tools. While only time will tell if these tools are considered “worth it” to businesses, this does show that Alphabet is actively integrating AI across its current offerings.
Alphabet is also very popular with new investors overall. It’s in several beginner-friendly ETFs, for instance.
2. Meta Platforms (META)
Meta Platforms (NASDAQ: META) is best known as Facebook, despite their name change. They’ve undergone a significant rebranding to reflect their shifting focus away from social media and towards the “metaverse.” The metaverse, as Meta visualizes it, is still in its early stages, but it’s likely that AI will play a crucial part in building it.
Currently, Meta Platforms is using AI in many of its current products, such as personalized ad targeting and content recommendations. While the company isn’t developing AI directly or selling AI-related tools, they are absolutely using AI.
3. Amazon (AMZN)
Amazon (NASDAQ: AMZN) is an e-commerce giant, but that isn’t all they are. This company has slowly grown into a major player in the AI space. They’ve begun integrating AI into their current recommendation engine, which recommends products based on what users have purchased and looked at.
They also offer a cloud computing platform called Amazon Web Services, which has started offering AI-oriented tools. It’s slowly become a popular choice for companies looking to build AI applications. Amazon is actively exploring other ways to utilize AI, such as in its home devices.
4. Apple (AAPL)
Apple (NASDAQ: AAPL) is renowned for its innovation, so it’s very likely we’ll see it dive into AI, too. Their virtual assistant, Siri, is the most obvious place they’ve used AI currently. This company has upgraded Siri with AI to improve its understanding of user requests. Facial recognition technology, such as Face ID, is another area where Apple has excelled, utilizing AI for secure authentication and unlocking features.
It’s just small things that the company uses AI for now, but it’s also investing heavily in AI research and development. Many AI applications are being made behind-the-scenes, and we’ll probably see more of Apple’s AI in the future.
5. NVIDIA (NVDA)
NVIDIA (NASDAQ: NVDA) is a huge player in the AI hardware space. AI may seem completely virtual (and a bit magical). However, AI needs hardware to power it and run all the operations. These operations can be massive.
NVIDIA creates top-level graphics processing units (GPUs). Despite the name, these processing units are used for all sorts of things (like data mining, but that’s another story!). They’ve become particularly useful in training complex AI models thanks to their ability to handle very complex amounts of data.
As the demand for AI grows, the hardware needed to run all of these programs will become increasingly needed. NVIDIA is likely to scoop up at least some of these sales if not most of them.
For companies similar to NVIDIA, take a look at our new report, “The Next NVIDIA.”
6. C3.ai (AI)
C3.ai (NYSE: AI) is one of the pure-play AI companies on this list. It’s focused on directly developing AI for many different industries. If you want to take advantage of AI development directly, consider this company seriously. They offer a platform that allows businesses to train and operate AI applications.
Its main target industries are energy, manufacturing, and healthcare – all industries that will likely utilize AI in the future.
7. Palantir Technologies (PLTR)
Palantir Technologies (NYSE: PLTR) is a data analytics company that helps organizations use and learn from their data. It’s very popular with government clientele, though many commercial clients also turn to it with massive datasets. After all, even if you’ve collected all the data in the world, you need some program to help sort through it. There is simply too much data for humans to sort through!
As you can guess, AI is very helpful for this task. AI can help sort through complex data and provide actionable information to Palantir’s clients. While this may not be a very fun or interesting company, they do make a compelling investment.
8. Microsoft (MSFT)
While Microsoft (NASDAQ: MSFT) is mostly known as a hardware giant, this company has made significant investments in AI research over the last few years. The most obvious example is in their cloud computing platform, Azure, which now provides a comprehensive suite of AI services. It has become a direct competitor to Amazon Web Services.
Microsoft has also integrated AI into many of its current products, such as Office. If you use any of their products, you may have noticed a few free upgrades over the last year or so.
They’ve recently acquired GitHub, a platform for software development, too, potentially putting them in an even better position to help companies develop AI.
9. Adobe (ADBE)
Adobe (NASDAQ: ADBE) is a creative software company, which may seem like the furthest thing from AI. However, they’re already integrating AI into their products to make things like image editing easier. Adobe’s Creative Cloud suite incorporates AI to provide intelligent features like automatic object selection, image enhancement, and content generation.
Since Adobe is already such a well-known name, they’re in a very good position to take advantage of AI advancements.
Should You Invest in AI
AI is the biggest thing in the news, but that doesn’t mean everyone should rush to invest in it. Since AI is still so new, there are a lot of unknowns involved. We don’t know if AI has any staying power or if governments will implement regulations that may cut AI profits down. All of these unknowns lead to a lot of risk.
We only recommend investing in pure AI stocks if you’re willing to lose it all. Don’t invest anything into AI stocks that you can’t afford to lose. In a way, it’s a bit like gambling!
However, we also added several well-established companies to this list. Microsoft isn’t going anywhere, even if its AI development falls through the floor. If you’re less risk-tolerant, choose one of these larger companies.
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