5 AI Stocks You Need on Your Watchlist

The AI sector is a very lucrative market to invest right now. The technology has existed for a long time but only began gaining traction with the release of ChatGPT and other similar programs that practically showed how AI can change our lives. 

In the past years, significant progress has been made in the AI space, with the market size hitting over $40 billion in 2022. Yet, we are only just beginning to explore the full potential of the technology.

Bloomberg Intelligence predicts that the AI sector could explode to $1.3 trillion in the next decade, which represents a whopping 6,400% growth opportunity in market size. 

In the near term, the growth would be driven by training infrastructure. However, in the medium-to-long term, it could shift to inference devices for large language models (LLMs), digital ads, specialized software and services, according to BI’s research. 

The analysis somewhat hints to investors where to position for investment opportunities. But with so many companies jumping on the AI bandwagon, picking the next tech giant or AI stocks feels more like a game of chance.

Thus, we will approach the question of “the best AI stocks to invest in right now” by focusing on the early major players in the AI market. With that said, below are some of the best AI stocks that can give you exposure to the $1.3 trillion growth opportunity in the AI market.

5 AI Stocks to Watch Right Now

1. Nvidia

Nvidia (NASDAQ: NVDA) isn’t just about gaming anymore. They hold an 81% market share in AI chips used in cloud and data centres, making them the undisputed leader in this rapidly growing field. The company’s powerful GPUs are perfect for training and running complex AI algorithms. 

Nvidia boasts impressive financial performance with consistent revenue growth, exceeding expectations with over 200% increase in the recent quarter.

2. Microsoft

Microsoft (NASDAQ: MSFT0 has been on a tear, and investors are increasingly bullish on the tech giant for several reasons, one of them being their strategic investment in OpenAI, the maker of ChatGPT and the newly-released Sora, a text-to-video application. 

Azure, Microsoft’s cloud platform, is a close second to Amazon Web Services (AWS) and is growing rapidly. AI businesses are flocking to cloud solutions for scalability, flexibility, and cost savings, and Microsoft has been capturing a significant share of this booming market.

3. C3.ai

Going by early mover advantage, C3.ai (NYSE: AI) is an Enterprise AI that deserves a shoutout. It was founded in 2009 and offers more than just individual AI tools. The company provides a comprehensive “Application Platform” that streamlines the entire AI development and deployment process for businesses.

 By delivering their applications through a “Software-as-a-Service” (SaaS) model, C3.ai makes their offering accessible and scalable for businesses of all sizes. This subscription-based model also provides recurring revenue, boosting investor confidence in the company’s financial stability.

4. Palantir

Palantir Technologies’ (NYSE: PLTR) new offering, Artificial Intelligence Platform (AIP), is what draws AI investors’ attention to the company. AIP streamlines data integration, analysis, and deployment of AI models, making it easier for customers to leverage AI’s power.

While Palantir has faced criticism for its previous lack of profitability, recent quarters have shown positive changes. In 2023, the company recorded a net income of $210 million, marking its first year of profitability. The company is growing revenue and narrowing losses as its customer counts grow amid AIP. 

5. Alphabet Inc. 

Alphabet (NASDAQ:GOOGL) stands out for AI investors seeking long-term winners. Alphabet, through DeepMind and its other research labs, sits at the forefront of AI research, boasting numerous breakthroughs in natural language processing, computer vision, and reinforcement learning.

The sheer volume and diversity of data Google possesses is unparalleled. Search queries, YouTube watch history, Google Maps data – this treasure trove fuels their AI engines, leading to superior performance and personalization in their products.

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