Is it a good idea to invest in AI stocks?
The AI journey is in its early stages, and past performance is no guarantee of future returns, but we think today's leading AI infrastructure companies, such as the data center and cloud providers and the semiconductor manufacturers, should continue to grow as the market develops.
NVDA is the best-performing AI stock over the past year. Earnings per share, or EPS, had a big leap higher in 2023, and analysts project strong EPS growth going forward. It has the highest forecasted 5-year EPS growth on the list.
However, investing in AI companies is not without challenges and risks, especially from a legal regulatory perspective. AI is a complex and dynamic field that raises various ethical, social and legal issues, such as data protection, privacy, security, bias, accountability, transparency and human rights.
We believe that the AI thematic still has a long way to run. However, investments must abide by strict valuations and where they fail to do so, capital will be moved towards those opportunities that are not yet fully priced.
Buffett owns two AI stocks in his Berkshire Hathaway portfolio. He has positions in six other AI leaders thanks to Berkshire subsidiary New England Asset Management. All eight AI stocks could deliver solid long-term returns, but three are the most likely big winners.
| Company (Ticker) | Sector | Market Cap |
|---|---|---|
| MicroStrategy (MSTR) | Technology | $20.71B |
| Nvidia (NVDA) | Technology | $1.91T |
| C3.ai (AI) | Technology | $2.53B |
| Meta Platforms (META) | Communication services | $1.23T |
When Elon Musk created his artificial-intelligence startup xAI last year, he said its researchers would work on existential problems like understanding the nature of the universe. Musk is also using xAI to pursue a more worldly goal: joining forces with his social-media company X.
| AI Stocks With the Most Momentum | ||
|---|---|---|
| Price ($) | Market Cap ($B) | |
| Super Micro Computer Inc. (SMCI) | 1,025.06 | 60.0 |
| MicroStrategy Inc. (MSTR) | 1,876.99 | 31.8 |
| Applovin Corp. (APP) | 71.09 | 24.3 |
Some of the best AI stocks that you can buy with less than $5 are Nerdy (NRDY), BigBear.ai Holdings (BBAI) and FiscalNote (NOTE). These stocks are poised to see considerable growth in the future.
What are the 10 best stocks to buy right now?
- Cisco Systems Inc. (ticker: CSCO)
- Comcast Corp. (CMCSA)
- Telus Corp. (TU)
- Unilever PLC (UL)
- Sony Group Corp. (SONY)
- Toronto-Dominion Bank (TD)
- Solventum Corp. (SOLV)
- Essential Utilities Inc. (WTRG)
| Ticker | Company | Performance (Year) |
|---|---|---|
| NVDA | NVIDIA Corp | 221.39% |
| SYM | Symbotic Inc | 53.19% |
| UPST | Upstart Holdings Inc | 46.67% |
| PRCT | Procept BioRobotics Corp | 41.03% |
Nvidia stock is not a buy right now. However, if the stock climbs above its flat base, it would be a buy. A stronger rebound from the 10-week line also would put Nvidia in a buy zone.
Gates' unsurprising top AI stock
You probably won't be surprised in the least by Gates' top AI stock. Almost 34% of the Gates Foundation Trust's portfolio is invested in Microsoft (MSFT -1.27%). The billionaire co-founded the technology company and served as its CEO for 25 years.
Chips Outperform Software As AI Stocks
Semiconductor companies such as Nvidia (NVDA), Arm Holding (ARM) and Advanced Micro Devices (AMD) remain top-performing AI stocks. Meanwhile, the PHLX Semiconductor Sector index is up 18% in 2024. Nvidia stock has surged 78% in 2024. Arm stock has jumped 75%.
Musk launched the startup last year as an alternative to Open AI, which he co-founded and later left over philosophical differences about how to profit from the technology. xAI's product, a chatbot named Grok, is developed using social media posts on X, the network formerly called Twitter, which Musk also owns.
| Name | Price | Price Change |
|---|---|---|
| JAGX Jaguar Animal Health | $0.15 | $0.026 (14.47%) |
| PRSO Peraso, Inc. | $1.56 | $0.02 (1.3%) |
| GOEV Canoo | $3.01 | $0.08 (2.73%) |
| LGVN Longeveron | $2.40 | $1.13 (32.01%) |
Microsoft, Apple, Nvidia, Alphabet, Amazon, and Meta Platforms are in the club now. All of them are artificial intelligence (AI) leaders.
OpenAI is not publicly traded on NYSE or NASDAQ in the U.S. To buy OpenAI's stock you need to be an accredited investor.
Strongest AI delivers data-driven products and solutions that help athletes maximize performance and competition organizers deliver memorable live and virtual experiences.
What AI is Jeff Bezos investing in?
Yet Amazon founder Jeff Bezos recently placed a bet on Perplexity AI, a startup that, despite the daunting odds, is taking on the search giant. “Startups are all about being bold,” Perplexity CEO Aravind Srinivas recently told Fortune.
Tech Giants And AI Powerhouses
One of the most direct ways to invest in AI is through established technology giants and AI-focused companies. Companies such as Google's parent company Alphabet, Microsoft and Nvidia have been at the forefront of AI innovation.
Elon left OpenAI, saying there needed to be a relevant competitor to Google/DeepMind and that he was going to do it himself. He said he'd be supportive of us finding our own path. In late 2017, we and Elon decided the next step for the mission was to create a for-profit entity.
| Stock | 2024 return through March 31 |
|---|---|
| Avidity Biosciences Inc. (RNA) | 182% |
| Arcutis Biotherapeutics Inc. (ARQT) | 206.8% |
| Janux Therapeutics Inc. (JANX) | 250.9% |
| Trump Media & Technology Group Corp. (DJT) | 254.1% |
Investors looking to capitalize on the AI trend might wish to focus on companies meaningfully contributing to the AI boom. The most popular AI-focused stocks on the NYSE or the Nasdaq for February 2024 include Phunware, Tesla, Advanced Micro Devices, Ford, and SoFi.
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