AI stocks have already had such a stellar run in 2023 that it’s fair to ask if there’s anything left. The answer, of course, is yes. We are still very much in the early stages of the generative AI boom. It’s a boom that promises to reshape our world and touch on many aspects of our lives in general. This has led to the rise of the best AI stocks to buy in August.
Just how much AI changes our world remains to be seen. Similarly, how it changes our lives also remains a mystery. Whatever the outcomes, it’s sure to increase productivity and that will create growth that will positively affect a multitude of things stock prices included.
So with that said, here are the best AI stocks to buy in August.
One of the most obvious reasons to invest in Nvidia (NASDAQ:NVDA) stock now is Q2 results. The firm won’t release its second quarter results until Aug. 23. The anticipation leading up to that date is sure to create opportunities, especially for short-term traders. Beyond short-term trading opportunities, Nvidia remains the most important AI stock, period.
Nvidia is already a high-volatility stock and there’s never been as much interest in its quarterly results as those set for Aug. 23. Everyone wants to know if the king of AI can reach $11 billion in sales spurred on by AI’s emergence.
The upside here is that as I write this article Nvidia’s shares are trading near $445. Declining U.S. creditworthiness has edged share prices slightly lower and that’s an opportunity given how dominant Nvidia has been this year. All of the commonly-cited value metrics used in stock valuation don’t matter in the case of NVDA shares. AI is promising to be a once-in-a-generation paradigm shift. And Nvidia is the leader of that paradigm shift within the stock market.
The same argument applies to C3.ai (NYSE:AI) and its stock just to a lesser degree. The enterprise AI firm is set to release second-quarter results a week after Nvidia. It’s all about playing the waiting game and reacting accordingly. Like Nividia, C3.ai had some of the wind taken out of its sails on the credit downgrade. That is arguably creating a buying opportunity.
It’s a contrarian pick at this point to be sure. A lot of investors have grown skeptical of C3.ai arguing that the AI angle is overblown and that the firm’s fundamentals don’t justify its price. Speculators largely are betting that prices will fall and short interest in the stock is sky high.
Revenue grew by less than 6% during the first quarter at C3.ai. However, the firm has been identified as among the leading enterprise AI picks. Any news that suggests C3.ai has made progress on that front between now and Aug. 30 is likely to create a lot of money for traders.
Oracle (NASDAQ:ORCL) is known for database management and enterprise resource planning among other things. The stock has also garnered a lot of attention for AI lately. It is certainly worth considering in that regard.
For one, Oracle’s cloud revenue growth is outpacing its overall growth. The firm’s most recent earnings report showed that while revenue increased by a healthy 17%, cloud revenue grew by 54%(1). That’s important because cloud AI integrations are set to become a prime area for growth overall.
Oracle is fundamentally different from the previous two stocks in this article in that it’s more mature. It offers a dividend as does Nvidia but with a yield that is roughly 30X greater. Oracle was already headed in the right direction when it finished its fiscal year months ago with record revenues of $50 billion. The promise of AI is very likely to send it higher as AI meets data centers and the cloud and new value is created in those areas.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.