As the world continues its push with advanced technologies and smart solutions, the realm of AI continues to prove as being a domain that will dominate the mainstream in the future. The utility it offers, as well as the core advantages it promises, have already been groundbreaking at present, throughout a range of industries and operational areas.
Healthcare, education, supply chains, production, entertainment, and security are just some of the names that are beginning to see groundbreaking shifts through the incorporation of artificial intelligence. After looking at this enormous growth of artificial intelligence, now investors have also started looking toward AI stocks.
Given this compelling trend, some of the largest corporate powerhouses have been diversifying their revenue streams and striving to make use of this promising and revolutionary domain. In 2021, investments in AI grew by over 100% since the last year, reaching almost $94 billion.
As AI continues to expand into different areas, a democratization of the technology will also inevitably take place, allowing small and medium-sized businesses to profit too. In this list, we shed the spotlight on the top AI stocks that will allow investors an opportunity to cash in on the rapid AI craze. The stocks presented here are the best AI names in the market for the final quarter of 2022.
Types of AI Stocks
AI stocks come in various forms, each offering a distinct avenue through which investors can ride along the long-term wave. These are great for investors considering where to buy AI stocks from different avenues, enabling them to tap into this exciting sector.
Some of these are discussed below:
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Artificial Intelligence Companies
Investing in established AI companies with a track record of innovation and successful commercialization can provide exposure to diverse AI applications, from autonomous vehicles to healthcare solutions. These make up the most appealing and best AI stocks in the market.
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Cloud Platforms
Cloud service providers offering AI infrastructure and tools, like Amazon Web Services (AWS) and Microsoft Azure, present investment opportunities to capitalize on the growing demand for scalable and accessible AI solutions across industries.
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Virtual Assistants
Investing in virtual assistant technologies, such as Amazon’s Alexa or Apple’s Siri, can tap into the increasing adoption of voice-activated AI interfaces and the integration of AI-powered assistants in various consumer and enterprise applications.
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Digital Transformation Technologies
Market players should consider to invest in AI stocks that are integrated into digital transformation technologies that optimize operations, improve decision-making, and enhance customer engagement, including automation, analytics, and predictive modeling solutions.
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Neural Networks & Language Models
Another avenue to invest in AI stocks is through the core technology of AI applications by supporting advancements in neural networks and language models, which power various AI-driven solutions and contribute to the development and deployment of cutting-edge AI systems.
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Natural Language Processing Tools
Finally, investors can also consider NLP tools to leverage the importance of understanding and processing human language in AI systems, enabling tasks like sentiment analysis, language translation, and chatbot development, offering opportunities in the growing NLP market.
Factors to Consider When Investing in AI Stocks
When seeking the best AI stocks to invest in, it is essential to navigate the market with a comprehensive understanding of the factors at play. These are discussed below as follows
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Understanding the AI Market Landscape
Investors should have a clear understanding of the AI market, including its size, growth potential, key players, and emerging trends. This knowledge helps in identifying promising investment opportunities and avoiding companies with limited prospects.
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Evaluating Company Fundamentals and Financial Health
Assess the financial strength, revenue growth, profitability, and sustainability of AI stocks, ensuring that the companies demonstrate solid fundamentals for long-term success in the AI industry.
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Analyzing Competitive Advantage and Differentiation
Look for AI stocks that possess a unique competitive advantage, such as proprietary technology, intellectual property, partnerships, or a differentiated product or service, which sets them apart from competitors.
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Assessing Leadership and Management Team
Evaluate the leadership and management team of AI stocks, considering their expertise, experience, strategic vision, and ability to navigate the complex AI landscape effectively.
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Monitoring Market Trends and Technological Advancements
Stay abreast of market trends and technological advancements impacting AI stocks, as the industry evolves rapidly. Investing in companies that adapt to emerging trends and embrace new technologies can position you for long-term success in the AI sector.
List of AI stocks
Berkshire Grey Inc.
To start off our list of AI stocks, we begin with Berkshire Grey Inc., (BGRY) an AI-assisted robotics company.
Berkshire Grey is not only an AI-assisted robotics company that specializes in supply chain automation but also holds a strong presence in the US and Japan.
With a focus on automating industrial manual processes, BGRY benefits from tailwinds such as e-commerce demand, competitive pressures, and labor scarcity.
The company has achieved a 12% compound annual growth rate, and in Q2 2022 alone, experienced remarkable year-on-year revenue growth of 420%.
With major clients like Walmart, Target, and FedEx, Berkshire Grey is positioned as a leading player in the AI industry with excellent growth potential.
Microsoft Corporation
The second stock on our list of AI stocks is the software kingpin, Microsoft Corporation (NASDAQ: MSFT). Microsoft, at this point, is a household name, given its leadership in the operating software domain.
Microsoft possesses the financial strength and wide reach to extend its influence into the AI space.
With its AI-as-a-Service approach, Microsoft aims to make AI tools accessible to non-programmers, potentially transforming sectors like healthcare, education, and retail. Azure Cognitive Services, a key project, offers AI packages for integration.
With substantial cash reserves and liquid investments, Microsoft has the capability to execute its ambitious AI strategy, making it an excellent choice for investors seeking a robust stock with short-term AI leadership potential.
Snowflake Inc.
Moving on, we take a look at the cloud-based data platform provider, Snowflake Inc., (NASDAQ: SNOW) a US-based multinational company.
Snowflake offers a competitive advantage by supporting AI processes and fast analysis of unstructured data.
With impressive revenue growth of 83% year-on-year and a net revenue retention rate of 171%, Snowflake demonstrates strong customer monetization and a sustainable business model.
As a result, SNOW is a compelling stock choice for investors looking to capitalize on the AI-led growth wave, backed by its unique technology and market performance.
C3.ai Inc.
Next up, at number four on our list is the AI enterprise software company, C3.ai Inc., (NYSE: AI). C3.ai is a company with an international presence valued by the market at $1.6 billion.
C3.ai specializes in predictive modeling for functions like fraud detection and asset replacement. With a unique partner ecosystem approach, C3 collaborates with industry leaders to deliver industry-specific products, driving two-thirds of its revenue.
Despite the recent stock performance, its customer count is growing by 50% and topline growth amounts to 38%. Overall, C3 presents an attractive opportunity for investors seeking a potentially undervalued AI stock poised for future growth.
ZoomInfo Technologies Inc.
Next up on our list of AI stocks is ZoomInfo Technologies Inc. (NASDAQ: ZI). ZoomInfo leverages AI to deliver smart solutions and maximize efficiency for clients.
As a market leader with strong pricing power and an impressive 80% gross margin, ZoomInfo stands out in its industry.
With a growth-oriented business model and a diverse partnership ecosystem including innovative clients like Uber, Shopify, and Zoom, ZoomInfo is poised for substantial growth.
Guided by a projected 45% growth rate and increased free cash flows, ZoomInfo is an attractive AI stock for investors seeking a rising star with minimal competition and a strong market position.
Salesforce
Salesforce Inc. (NYSE: CRM) is an excellent AI investment due to its established record of innovation and growth. As a CRM market leader, it has become a prominent provider of AI-powered solutions.
With its AI platform, Einstein, businesses of all sizes enhance customer relationships, sales, marketing, and service.
When considering where to invest in AI stocks, Salesforce is compelling given its history of innovation, a vast customer base of over 150,000 clients for extensive data training, diverse AI solutions like Einstein Vision and Discovery, and strong financial performance.
With these factors, investors seeking AI exposure should consider Salesforce for long-term growth potential.
Okta
Okta is an attractive AI investment as a leading provider of AI-powered identity and access management (IAM) solutions. With a large and growing IAM market, Okta’s strong competitive position and financial performance make it a compelling choice.
The company’s focus on innovation, broad customer base, and strategic partnerships with major tech companies further enhance its growth potential.
Investors seeking AI exposure should consider Okta for its industry leadership, innovation-driven approach, and wide customer reach, making it a solid investment opportunity.
Nvidia
The computing and graphics giant, NVIDIA Corporation (NASDAQ: NVDA) worth almost $1 trillion is another phenomenal AI pick to consider.
NVDA’s data center revenue has been surging due to AI’ total addressable market expansion and a new product cycle, despite weaker enterprise/cloud spending.
Moreover, supply is increasing significantly for data center-related products, positioning NVDA to capitalize on generative AI demand. This makes NVDA a prime option for those considering where to invest in AI stocks.
Nvidia’s robust enterprise demand for AI and accelerated computing outweighs macro headwinds, and NVDA’s H100 chip is preferred for AI training and inference.
The company also boasts high-profile partnerships with Meta, Microsoft, Google, and Oracle, which is further fueling NVDA’s growth.
As the AI market expands, NVDA’s position in generative AI and accelerated computing makes it an enticing investment with expectations of continued growth and higher stock performance in the upcoming quarters.
BigBear.ai
BigBear.ai Holdings (NYSE: BBAI) is a promising investment due to its fast growth and strong alignment with AI and machine learning.
With a focus on autonomous systems, cybersecurity, and supply chain logistics, BigBear.ai offers valuable customer insights.
By leveraging big data, the company empowers customers to make informed decisions and achieve their operational objectives effectively.
With its diverse range of services and a commitment to leveraging AI technologies, BigBear.ai is well-positioned to capitalize on the growing demand for data-driven solutions, making it an attractive investment opportunity.
Vertiv Holdings
Vertiv Holdings (NYSE: VRT) presents a compelling investment opportunity due to its strong presence in the data center market.
With NVIDIA’s positive comments on the exponential growth of generative AI, Vertiv’s expertise in areas like thermal management and control positions it well to benefit from the shifting data center landscape.
As the demand for accelerated computing driven by generative AI intensifies, existing data center capacity will need to be optimized and repurposed.
Vertiv is poised to capitalize on this trend as data center operators strive to extract more computing power from tight spaces and increase rack densities.
With a growing market and increasing computing requirements, Vertiv stands as a promising investment in the data center industry.
SentinelOne
SentinelOne (NYSE: S) is yet another exceptional investment choice in the dynamic cybersecurity sector.
With its AI-driven autonomous endpoint protection and strategic partnerships with industry giants like Amazon Web Services and Microsoft, the company is well-positioned for robust growth.
In Q4 2022, SentinelOne achieved an impressive 92% YoY revenue growth, showcasing its resilience and financial prowess.
With its Singularity platform and strategic acquisitions, SentinelOne is a frontrunner in the rapidly expanding cybersecurity market, projected to reach $266.2 billion by 2027.
Although facing competition and evolving threats, SentinelOne is expected to outperform market expectations, making it an attractive investment opportunity.
Digital Realty
Digital Realty (NYSE: DLR) is an excellent AI investment due to its global presence in data centers, positioning it to benefit from the AI revolution. Unlike many AI-focused tech stocks, DLR offers investors a meaningful yield, making it an attractive choice.
With over 5,000 customers, including industry giants like Microsoft and Meta Platforms, DLR provides colocation and interconnection solutions across 28 countries and 300 facilities.
Following its acquisition of Telx, DLR’s expanding international footprint solidifies its position as a top data center provider. As AI continues to evolve, DLR stands to gain from the incremental growth opportunities in this nascent field.
Marvell Technology
The data infrastructure and semiconductor company, Marvell Technology (NYSE: MRVL) is a compelling AI investment based on its strong performance and optimistic outlook.
The company’s recent earnings release showcased significant growth in AI-related revenue, with management raising guidance and projecting a CAGR of 100% in AI revenue from FY23 to FY25.
Marvell’s leading solutions in networking, including PAM4 optics and DSP, are well-positioned to support the increasing demands of AI data centers.
With cloud service providers retooling their architecture and the importance of AI rapidly rising, Marvell stands to benefit from this substantial opportunity. The company’s focus on bandwidth and cloud-optimized solutions further solidifies its position in the AI market.
iRhythm Technologies
iRhythm Technologies (NASDAQ: IRTC) presents a strong investment opportunity in the AI space due to its leading position in the US ambulatory cardiac monitoring market.
Moreover, IRTC’s unique tech, Zio monitors, which runs with advanced AI and machine learning algorithms, enables high-precision detection of arrhythmias.
The innovative Zio XT and Zio AT patch monitors provide extended wear time and incorporate Bluetooth technology for mobile cardiac telemetry.
These advancements improve efficiency and diagnostic capabilities, reducing the need for inconclusive tests. Despite short-term challenges, iRhythm’s compelling long-term outlook, revenue expansion opportunities, and profitability potential make it an attractive investment.
Advanced Micro Devices
Advanced Micro Devices (NASDAQ: AMD) is a compelling AI investment due to its strong position in the semiconductor market and its focus on AI capabilities.
The company’s upcoming AI event is expected to drive further momentum for the stock, and AMD’s CEO Lisa Su has demonstrated a long-term commitment to the competitive semiconductor market.
With increased investment in research and development, AMD is well-positioned to capitalize on the growing demand for AI tools and chips.
The company’s expansion in the server and desktop markets, along with its strategic acquisitions, indicate its growing popularity and potential for market share gains.
As the demand for AI continues to rise, AMD has the potential to become a significant player in the AI chip market, further driving its growth.
AudioCodes
AudioCodes (NASDAQ: AUDC) presents a potential AI investment opportunity due to its Voice AI business line.
The company is investing considerably in developing conversational AI capabilities, which can enhance customer satisfaction by integrating telephony channels into text-based chatbots.
With strong growth projected in this segment, AudioCodes is well-positioned to benefit from increasing demand for Voice AI solutions.
The company’s competitive advantage lies in its lack of strong competitors in this field and the potential to connect its Voice AI product to cognitive services like ChatGPT.
If a fraction of ChatGPT’s vast user base chooses AudioCodes’ devices, it could lead to a significant sales boost.
Shutterstock
Shutterstock (NYSE: SSTK), the illustrative and digital content provider, presents a promising AI investment opportunity due to its strategic partnership with OpenAI.
This collaboration allows OpenAI’s tools to be integrated into SSTK’s platform, enabling customers to generate AI content based on keyword inputs. The partnership has already shown significant results, with increased subscriptions and content on the platform.
By leveraging the current interest in AI, this partnership provides SSTK with marketing advantages.
If SSTK can successfully convert a portion of the new platform users into customers of their other product offerings, the partnership will not only yield short-term benefits but also provide long-term advantages of being seamlessly integrated with AI technology.
Accenture
Accenture (NYSE: ACN), the professional consultancy, is a stock that presents a compelling AI investment opportunity due to its collaboration with Salesforce to accelerate generative AI deployment in CRM technologies.
This partnership demonstrates Accenture’s commitment to AI innovation and positions it as a leader in implementing and optimizing AI solutions.
By establishing an acceleration hub for generative AI, Accenture, and Salesforce aim to streamline and enhance CRM capabilities for clients across industries.
Additionally, Accenture’s acquisition of Flutura, an industrial AI company, strengthens its AI capabilities in the industrial sector, allowing it to deliver more value to clients and capitalize on the growing trend of digital transformation and sustainability.
These initiatives have the potential to drive increased revenues and profitability for Accenture, making it an attractive pick among AI stocks.
NICE
NICE ltd. (NASDAQ: NICE) is positioned as a strong player in the field of conversational AI, which presents an exciting opportunity for investors.
The company’s custom-built AI engine, Enlighten, integrated into its CXone platform, showcases its commitment to leveraging AI technology in customer experience management.
NICE’s focus on cloud adoption and improving cloud margins is a positive sign, indicating its ability to capitalize on the AI-driven digital transformation wave.
While there may be challenges associated with AI’s impact on margins and profitability, NICE’s innovative approach and industry-specific domain expertise make it well-positioned to succeed in the AI space.
By closely monitoring NICE’s financial performance and market adoption, investors can potentially benefit from its growth potential in the AI sector.
Machine Learning Stocks
While AI has all its factors of appeal and dynamic strengths, the following are some powerful AI picks that excel specifically in the machine learning realm:
- AdTheorent Holding Company, Inc. (NASDAQ: ADTH)
- AgileThought Inc. (NASDAQ: AGIL)
- PagerDuty Inc. (NYSE: PD)
- Semantix Inc. (NASDAQ: STIX)
- Kubient Inc. (NASDAQ: KBNT)
Investment Strategies for AI Stocks
Setting appropriate investment strategies for AI stocks is crucial to maximize returns and manage risks effectively in the dynamic and rapidly evolving AI market, ensuring alignment with your financial goals and risk tolerance.
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Long-Term Investing vs. Short-Term Trading
It is crucial to determine your investment horizon and risk tolerance to decide between long-term investing or short-term trading strategies.
For long-term investors, focus on the potential growth and fundamentals of AI stocks, while short-term traders may capitalize on market volatility and short-term price movements.
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Diversification and Portfolio Allocation
Investors targeting the AI sphere should spread their investments across a range of AI stocks to manage risk effectively
Diversification helps mitigate the impact of individual stock volatility and industry-specific risks, creating a balanced portfolio that can weather fluctuations in the AI market.
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Dollar-Cost Averaging
Investors may also employ dollar-cost averaging by regularly investing a fixed amount in AI stocks over time.
This strategy helps reduce the impact of short-term market volatility, allowing investors to accumulate shares at different price points, potentially leading to a more favorable average purchase price.
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Setting Realistic Investment Goals
It is also critical for investors to define clear and realistic investment goals aligned with their risk tolerance and broader financial objectives.
One must consider factors like expected returns, time horizon, and desired level of involvement to guide your decision-making when evaluating the question “Is AI a good stock to buy”.
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Monitoring and Rebalancing Portfolios
Investors should continuously monitor AI stocks and their performance against their investment goals.
To do this, one must periodically rebalance their portfolio by adjusting allocations based on changing market conditions or maintaining the desired risk-return profile, ensuring the investments remain aligned with the investment strategy.
Future Trends and Growth Opportunities in the AI Industry
Knowing about future trends and growth opportunities in the AI industry is crucial for informed decision-making and positioning investments to capitalize on emerging technologies and market shifts.
Knowledge of these trends would allow AI investors to maximize the potential for long-term profitability and stay ahead in the competitive AI landscape. The following are the most important trends to keep track of in the present age:
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AI Adoption in Healthcare and Medicine
The increasing adoption of AI in healthcare presents investors with opportunities to support innovative solutions for a range of healthcare-related functions.
These include diagnostics, personalized medicine, drug discovery, and telemedicine, as the industry seeks to improve patient outcomes and operational efficiencies.
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AI Applications in Autonomous Vehicles
The integration of AI in autonomous vehicles opens avenues for investment in a number of lucrative domains.
The most phenomenal of these is the self-driving car concept and intelligent transportation systems. Together these are set to revolutionize the transportation industry, improving safety, efficiency, and mobility while transforming the way people & goods are transported.
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AI in E-commerce and Personalized Recommendations
AI’s role in e-commerce offers investment potential, as AI-powered recommendation engines enhance customer experiences, enable targeted marketing, and optimize supply chain management.
These transformations are contributing to surges in sales growth and customer loyalty in the competitive e-commerce landscape.
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AI-driven Automation and Robotics
Investments in AI-driven automation and robotics technologies cater to the growing demand for enhanced productivity and efficiency across industries.
These solutions automate repetitive tasks, optimize operations, and drive cost savings, making them attractive investment prospects.
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AI for Natural Language Processing and Virtual Assistants
Natural language processing and virtual assistants are experiencing significant growth, driven by the increasing demand for voice-controlled devices and conversational AI.
Investing in AI technologies that understand and interact with human language opens opportunities in areas such as customer service, virtual agents, and voice-activated applications.
Conclusion
AI is, by every market analyst’s estimation, proving to be a revolutionary game-changer for a wide array of different industries. This opportunity is not something present only in the distant future, but is already prevalent in different forms throughout different areas, resulting in groundbreaking results.
For this reason, investors would do well to consider immediate investment in the most promising stocks that hold substantial exposure to AI. The AI stocks listed in this list are each highly promising and are very likely to be flying in the final quarter of 2022.
Frequently Asked Questions
Where To Buy AI Stocks?
AI stocks can be bought from online brokerage platforms and traditional brokerage firms. They provide investors with accessible options to participate in the growth of the AI industry.
Is AI A Good Stock to Buy?
AI is a good stock to buy due to its potential for growth and innovation, with increasing adoption across industries and the transformative impact of AI technologies on various sectors.
Where To Invest in AI Stocks?
Investors can consider investing in AI stocks through stocks of AI-based application companies, cloud platforms, virtual assistant applications, neural networks, or natural language processing systems.
