Artificial intelligence (AI) can increase global productivity and help businesses generate more revenue. Those two outcomes and others have captivated investors who seek to beat the market.
It’s hard to find an industry that performed as well as AI last year. It may also be challenging to find a sector that can keep up with artificial intelligence stocks in 2024. These stocks won’t go parabolic and will have good years and bad years.
However, many of the catalysts that fueled 2023’s rally are still in play this year. It’s possible for these three AI stocks to soar higher as they capitalize on the artificial intelligence boom.
Even now, it can be argued that Nvidia is still an undervalued stock. The company’s continued growth, business opportunities, 28 forward P/E ratio, and 0.56 PEG ratio form the foundation for this argument.
This company has been one of the best performers in the stock market. Shares are up by 241% over the past year and have gained 1,328% over the past five years. The company has even notched a 19% year-to-date gain. Most indexes have eked out low-single-digit gains this year, if that.
The firm is in a class of its own and has the potential to become the world’s most valuable company. It has grown the most out of the top artificial intelligence players and leads by a wide margin.
If Nvidia wants to become the world’s most valuable publicly traded company, it will have to contend with heavyweights: Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL). The two stocks have been jockeying for the top spot with Microsoft having a slight edge at the time of writing.
A 70% gain over the past year and a 268% gain over the past five years make Microsoft stock look appealing for long-term investors. The company’s artificial intelligence initiatives can fuel more gains and reward investors who accumulate shares.
Microsoft’s Azure has an AI platform that helps developers build apps at enterprise scale. The company has built-in tools to help developers create more effective AI and construct AI workflows.
The company also benefits from the rise of AI through its investment in OpenAI and Microsoft Copilot. Copilot is a new feature that has been built into Microsoft Office Products to increase productivity. The firm is a leading AI stock that continues to deliver double-digit year-over-year revenue and earnings growth.
Alphabet (GOOG, GOOGL)
Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is well-known for its search engine. Google is the world’s most popular website with its own YouTube right behind it. These platforms rely on artificial intelligence to provide consumers with relevant search results. YouTube also recommends videos similar to the one the viewer is currently watching to increase the amount of time people spend on the website.
Attention is money for any company, and Alphabet has demonstrated that it can keep attention for several hours in a given day. While ad revenue is still growing, the company is diversifying into other areas, such as cloud computing, to achieve higher growth rates.
Google Cloud offers several AI and machine learning products to help people use generative AI, gather data, and perform other tasks. Alphabet is also at the forefront of quantum computing through AI which can become the next megatrend. Quantum computing is still in its early innings, but artificial intelligence is heating up right now.
Alphabet stock gives you exposure to those sectors, the company’s vast advertising business, and other business segments.