10 AI Stocks to Buy Now
Since its launch in November 2022, ChatGPT has unleashed a massive investor interest in artificial intelligence (AI).
That’s because generative AI like the kind developed by ChatGPT shows how powerful this trend has become. And it’s kicked off a race by companies to develop AI programs and systems of their own.
With AI tools, companies can create more efficient manufacturing processes. Reduce waste. Better utilize their workforce.
Even if there are only small gains in those areas, that can add up to billions of dollars in added value for a large company – and trillions across the entire economy.
Already, the market has been looking for the top AI winners. While they’ve already had a run up, AI is so early in its development stages that these stocks have years of big gains ahead of them.
Here are the top 10 AI stocks to buy now:
Top AI Stock #1: Nvidia (NVDA)
Graphics processing units (GPUs) are the key technology for processing data quickly. They’re a key component for AI technologies.
And in the GPU manufacturing game, there’s one runaway winner, Nvidia.
Starting as a GPU provider for the gaming and computer space, AI demand is driving higher-level uses. They’re expanding into data center markets, the automotive space for self-driving cars, and GPUs are critical for successful cryptocurrency mining.
For AI, Nvidia has created the H-100 cloud server GPU. It’s become the industry standard for companies employing AI technology, given its rapid processing speed.
Nvidia is now even using AI tools to better design chips, which could help them expand their lead over competitors in the years ahead.
In short, Nvidia isn’t just the top AI stock … it’s likely going to be the top overall tech stock of the 2020s.
Even though Nvidia’s share price has surged by over 500% in the past few years, its earnings and revenues have grown just as fast.
In other words, even with a big price rally, shares aren’t overvalued. Especially when looking out at their growth potential in the years ahead.
One sign of Nvidia’s continued success? A hefty 48% profit margin. That’s a great level for a software company. For a company in the manufacturing space? It’s incredible.
Nvidia is a must-own stock for the AI trend … and for most of the other tech trends underway today.
Top AI Stock #2: Advanced Micro Devices (AMD)
While Nvidia has a big lead in the GPU space, nearly all chipmakers are benefitting from the booming demand for chips to meet the AI boom.
Among them, the leader for AI chips is Advanced Micro Devices.
They’re transitioning their business to increase exposure to the AI space, but they’re still the big chip leader in the PC market.
To that end, they’ve partnered with companies like Microsoft (MSFT) to supply chips to power their Azure platform.
Given Microsoft’s relationship with ChatGPT, that means AMD could be at the forefront of new developments in the AI space. That makes them the chipmaker best poised to grab market share. In time, they could eventually run neck-and-neck with Nvidia.
AMD is also working on AI-powered PCs. Rather than using a central server and requiring an internet connection, an AI-powered PC could make it easier for everyday users to employ AI in their work and play.
Given its expanding position in AI, the years ahead may be better for AMD than for Nvidia. That makes it a company worth owning as the AI trend takes off.
Top AI Stock #3: Microsoft (MSFT)
For years, tech giant Microsoft has been an investor in OpenAI. They invested $1 billion in the company back in 2019, well before the launch of OpenAI’s flagship product, ChatGPT.
In 2023, they confirmed a multi-billion-dollar investment that makes them a minority partner of the company.
That puts them at the forefront of AI technologies.
Given Microsoft’s existing products, AI integration is a no-brainer. Adding in AI to Microsoft’s Office suite, or in its gaming division, could create better products and improved revenue opportunities.
Microsoft sees itself as being the company to bring the top AI tools, infrastructure, and models to the world, akin to its dominance in operating systems with Windows back in the 1990s.
Currently, Microsoft has a series of AI programs, such as its AI Skills Initiative. This offers free online courses and grants for generating AI and data science.
There’s also a Professional Program, providing hands-on experience in AI systems.
Microsoft is also one of several tech giants working on an AI committee to shape AI policy in in the United States government.
Even though it’s one of the largest companies on earth, Microsoft’s investment in OpenAI pays off, the company could continue to see the massive growth continue.
Top AI Stock #4: Meta Platforms (META)
Meta Platforms is best known as the holding company for the social media sites Facebook and Instagram.
Social media sites have come under fire in recent years, as their algorithms have created a system that causes users to come back again and again. So it should be no surprise that Meta is developing its own AI programs as well.
Meta’s AI division is working on everything from generative AI systems, which can be immediately tested out on its social networks.
That includes AI programs that can now generate videos from text prompts. Such tools could continue to keep eyeballs on social media platforms, where the users generate content.
Meta is also a player in the machine learning space. Those systems can be used to develop new ideas faster than what a team of humans can do alone.
Plus, Meta’s focus on virtual spaces could make it a leader in AI for the metaverse. While that part of the business hasn’t taken off as Meta has hoped, better AI tools could lead to the successful launch of a metaverse platform in time.
With the success of its existing social media platforms, Meta has the ability to invest billions into AI projects.
It’s already showing some early success, which may allow them to improve their core business and find ways to expand into new ones. That would allow the company go grow even larger in the years ahead as a top AI play.
Top AI Stock #5: Alphabet (GOOG)
Among the top tech players, Google has been slower in developing AI technologies.
The company, which still has nearly 90% of the global search engine market, can use AI tools such as voice prompts, to allow users to search the web without having to type in text on a screen.
Google is developing Project Astra, a digital assistant, powered by AI. One of the early tools is the ability to use a smartphone’s camera to identify the source of noises, and the ability to help users find misplaced items.
Google is also working on new technologies that can employ AI. While smartphones are still the standard handheld tool, Google Glass and other technologies could become leaders in the “wearables” part of the AI market.
While Google is developing AI tools focused on maintaining its market share, there could be some further gains ahead for Google.
That’s because Google has a history of innovation on other projects. That includes the user-friendly Gmail platform, or the Android operating system, which has become the dominant operating system for non-Apple smartphones.
In short, while Google has been a late bloomer in the AI race among the big tech players, it may come up with some surprising applications that become an industry standard. And that could do much to lift shares.
Top AI Stock #6: Oracle (ORCL)
Database giant Oracle (ORCL) is rapidly shifting to providing key services in the AI space. The company has spent the past few years shifting from physical database solutions to cloud infrastructure, and AI is the next step.
The company’s AI services allow developers to apply AI applications to their business operations, and Oracle’s database cloud severs are already running with Nvidia H100 GPUs, putting them as the industry leader.
Oracle’s AI services include the use of large language models and machine learning to best customize a user’s experience. That also allows for improved forecasting and labelling on datasets for further training AI models.
To grow this business, Oracle has invested over $2 billion in contracts with AI startups, which could lead to further breakthroughs.
That includes Cohere, which can provide private and secure generative AI services. While systems like ChatGPT are available for anyone to use, Oracle could carve out a strong niche in privacy-centered AI services.
Analysts have a moderate buy rating on the stock. While not expected to be the hypergrowth AI play as the semiconductor space, Oracle has posted strong revenue growth in the past few years as it’s shifted from physical databases to cloud services. AI stands to accelerate that trend.
Top AI Stock #7: Palantir Technologies (PLTR)
Originally created to sift through the world’s surging amount of data, Palantir Technologies (PLTR) is at the forefront of the AI trend.
Palantir deploys software programs, largely for the intelligence community, to provide signals intelligence from large data sets. AI and machine learning tools are utilized to speed up the process and create a more efficient business over time.
The company was founded on the idea of identifying the next terrorist target after noting how airline stocks were heavily shorted before the 9/11 attacks.
The company’s use of AI systems to sift through this data has made it a nearly leader in AI, and its tools could expand beyond government customers to corporate ones as well. Commercial revenues grew 32% over the past year, indicating strong demand for the company’s products in that market.
The company’s Artificial Intelligence Platform (AIP) is powered by GPD-4, and is used for defense and war planning strategies.
The platform uses data from a number of sectors, including government, healthcare, and financial markets to predict potential attacks and defenses to those attacks.
Palantir has been publicly traded for a few years now, and the company is finally starting to turn a profit. Revenues are growing at a double-digit rate, and an increased go-to-market strategy is leading to an increased number of long-term government contracts.
Top AI Stock #8: Adobe (ADBE)
Content creation is a huge growth component of the digital landscape. AI tools can help expand on that by creating content from simple, but increasingly complex, prompts.
That could prove a boon to digital media software giant Adobe (ADBE).
Best known for running the PDF standard for documents, Adobe also operates Photoshop and Illustrator for image creation.
While some investors have seen the company at risk of AI, the truth has been the opposite so far. 2023 was a solid year for Adobe, with double-digit top line growth and strong profit margins.
As Adobe management has noted, the increase in text-to-image creation from generative AI tools simple means more content that needs to be edited. That’s a boon for the Adobe and the digital creation industry as a whole, not a threat.
Adobe is also introducing AI tools for its software to increase the east of use and expand the features available to users.
One such tool is an AI assistant that can help companies better understand and exploit the data that gets embedded in PDF files. Tools such as this could be a huge boon for corporate customers, who could see an increase in workplace productivity.
Shares have been a laggard in the big-tech AI boom, but the fear surrounding Adobe is likely to subside in time as they continue to embrace AI technology and see continued double-digit growth.
Top AI Stock #9: C3.ai (AI)
C3.ai is a smaller play in the AI space that could have huge growth ahead.
That’s because C3.ai is an AI software company that provides businesses with the ability to design, develop, and deploy their own AI applications.
For companies that don’t want to take an “off the shelf” approach to AI, C3.ai can provide ample solutions.
The company’s tools include analysis-ready data sets, customer relationship management (CRM) solutions, inventory optimization tools, supply chain network risk tools, sustainability tools, and much more.
That’s a robust suite of products that can be tailor-made to fit a company’s specific AI tool needs.
Currently, C3.ai is inking deals with several large companies, including energy firms, defense contractors, and even the big tech players like Amazon, Google, and Microsoft.
C3.ai rebranded to push into the AI space in 2019, and as such, it’s still operating like an early-stage company. That means there’s a high growth potential, but investors looking for profits now may have to wait a while.
As long as C3.ai can continue to build up a list of large corporate partnerships, sales should improve in time.
Unlike many of the businesses that have benefitted from the AI boom so far, C3.ai is a small-cap play, with a market cap of about $3 billion.
As a pure player in the industry, shares could see a massive jump higher based on its size. Plus, it’s also small enough that a big player may be willing to pay a sizeable premium to acquire the company.
Top AI Stock #10: BigBear.ai (BBAI)
With a market cap under $500 million, BigBear.ai (BBAI) is the most speculative AI play today.
But it stands to see massive growth. That’s because BigBear provides AI-powered decision intelligence solutions, which could make it a leader in digital security in the AI age.
The company’s tools are designed to better visualize the impact of changes that are made, often from using raw or even incomplete data.
With BigBear’s tools, users can make better decisions that improve the overall outcome, and in a fraction of the time.
That includes tools related to national security, supply chain management, biometrics, and digital identity.
Most of the company’s customers are government agencies, such as the U.S. Air Force, but they’ve expanded into the commercial space as well, with over 160 corporate clients.
BigBear has tremendous opportunities to expand simply through government contracts. But the overall AI security space offers tremendous upside in the coming years.
BigBear sees its niche of AI security as a $45 billion market today, which can grow to over $130 billion by the end of the decade.
With a rising need for strategic planning services, improved supply chain security, and protection from digital threats, BigBear is a small play today that could become a dominant player in just a few years.