3 of the Best AI Stocks to Buy Right Now
Remember when cloud computing became the hot new buzzword on Wall Street? While this industry continues to expand, another new term is being spun around financial blogs, Twitter Inc (NYSE:TWTR) and weekly magazines: artificial intelligence. So what is this new technology and what are some of the best AI stocks to buy?
First thing’s first: artificial intelligence uses machine learning, deep learning and other processes that allow computers to perform tasks that generally require human intelligence. So a robotic arm at a manufacturing plant is not in itself an AI function. That said, AI isn’t necessarily in the form that many us envision when we hear the term, like a fully functional robot capable of world domination.
Instead, AI tasks can be anything from speech recognition, translation and anticipation, to visual perception and/or reaction to real-time information, events or scenarios. Put simply, AI can be used to interpret everything from a human voice to a busy road (via an autonomous car) to data analytics being pulled from the cloud.
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Just like the could, investors suspect that AI will not be a short-term trend. It will last for many years and make many investors plenty of money. Here’s the thing though, bigger companies are snapping these smaller AI companies. The reasoning varies, but it all boils down to the same question: where does that leave us in the hunt for the best AI stocks to buy?
Best AI Stocks to Buy #1: Nvidia Corporation (NVDA)
Nvidia Corporation (NASDAQ:NVDA) isn’t necessarily leveraging artificial intelligence into a consumer product offering. However, the hardware maker serves as the vital backbone to a number of different companies in a number of different industries.
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Nvidia plays a huge role in gaming, data centers, graphic cards, cloud-computing, machine learning and autonomous driving. Due to its reach and near-domination in its key end markets, NVDA is one of the best AI stocks to buy in my mind.
Nvidia will continue to extract large sums of revenue from companies looking to compound on the ever-growing potentials of artificial intelligence and other growth markets. As these capabilities expand, more data and more power will be necessary. Powering all that will come down to companies like Nvidia.
That’s why there’s so much upside in the stock.
Best AI Stocks to Buy #2: Microsoft Corporation (MSFT)
The old Microsoft Corporation (NASDAQ:MSFT) very well may have missed the upcoming growth in the AI revolution. But no longer is MSFT held back by key leaders missing the mark. Instead, CEO Satya Nadella has successfully navigated Microsoft into a number of key markets, both with consumers and businesses.
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The company has quickly become the No. 2 player in cloud-computing, just behind Amazon.com, Inc. (NASDAQ:AMZN) and ahead of Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL).
In fact, last fall we highlighted a notable shift in MSFT’s growth strategy, peppering its annual report with new AI references. One excerpt reads: “Our strategic vision is to compete and grow by building best-in-class platforms and productivity services for an intelligent cloud and an intelligent edge infused with AI.”
Look for MSFT to play a role in the future of AI.
Best AI Stocks to Buy #3: Salesforce (CRM)
It’s tempting to go with a smaller company here, such as Box Inc (NYSE:BOX). But I like the diversity that larger companies provide along with having exposure to this budding industry. The thing that’s hard about AI though? It’s capabilities are growing in exponential fashion, making it hard to grasp how quickly the industry is advancing. It also makes it hard to figure out what it means for our lives and our dollars.
Take Salesforce.com, inc. (NASDAQ:CRM) for example. From the company’s most recent conference call (bold emphasis added):
“In fact, our innovation in artificial intelligence is delivering incredible value to our customers. Salesforce Einstein now delivers nearly 2 billion predictions every day, and that’s a doubling of our daily predictions just last quarter.”
I really like the companies that can fuse cloud-computing with AI because it unleashes so much potential. While MSFT does its own cloud analytics, CRM handles the work for both AMZN and GOOGL. As they grow, so too does CRM and its services. AI plays right into that hands of that growth. CRM is a perfect buy-on-dips stock.
There are a lot of choices when it comes to finding the best AI stocks to buy. These are just three of them, but they are high-quality companies with lots of potential in the future.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell held a position in BOX and CRM.
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