Top 3 Artificial Intelligence Stocks Right Now (ARK Invest's Big Ideas 2023)

Top 3 Artificial Intelligence Stocks Right Now (ARK Invest's Big Ideas 2023)

We can see that the world around us is changing rapidly thanks to the advancement of technologies like self-driving cars, reusable rockets, and human-like robots. 

Nonetheless, one technology powers them all; we are talking about artificial intelligence. 

Artificial Intelligence has changed our lives in many ways, just like how smart phones or the internet has done in the past. 

Moreover, artificial intelligence now allows us to make money through investments. 

So that we can invest in the best corporations worldwide that are taking advantage of the new AI boom, especially as their stock prices dropped over 25% in the last 12 months. 

In this article, we will go over why you should buy into AI stocks, some terminology that you will come across in the AI world, and finally, reveal the top 3 AI stocks that you should buy right now! 

So first up, why should you invest in AI stocks?

Why should you invest in AI stocks?

The rising influence of artificial intelligence in our daily lives is documented. However, there is more to these stocks than their influence right now. 

Artificial Intelligence is a fundamental force behind most inventions and innovations seen in many sectors of the economy. 

In recent years, AI-powered tools have changed the way most companies do their business. 

Also, it has enabled humans to explore areas that were considered to be off-limits previously, this would include exploring other planets and learning about the potential value of mineral deposits in space. 

Besides, companies use Artificial Intelligence to automate processes that were formally expensive and time-consuming. 

Therefore, these companies can save both money and time. The money and time can be used to complete other essential tasks that are the revenue drivers so that these companies will become more profitable. 

Speaking of profitability, AI can help corporations launch new products and services, attaining a competitive advantage over their peers in the industry. 

Ultimately, AI-powered products are smarter, more efficient, and provide better user-friendly interfaces than their conventional peers. 

So companies that use them provide greater customer satisfaction and enhanced customer retention than those that rely on traditional products. 

Other than that, people can use artificial intelligence to improve customer service. 

An example is using AI-powered chatbots that respond to customers quickly and provide personalized suggestions. Better customer service will drive sales and increase profits. 

Therefore, corporations that use AI-powered customer service chatbots will become more profitable. 

Finally, AI helps create new technologies that are safer for the environment, more efficient, and more elegant than what is available presently such as self-driven automobiles, smart homes, and crewless aircraft. 

And these products can revolutionize most industries. 

So, investing in AI company stocks is investing in the future of technology, and to a greater extent, the future of the world. 

However, when it comes to the world of AI, there are some key terms that are frequently thrown around that you should be aware of.

Essential terms to know

As a potential investor in artificial intelligence, it is beneficial to know some essential terms that may sound like jargon but are crucial to any investor in the AI industry. 

Here, we will explain 3 of the most important terms in my opinion starting with the first one:

Machine learning

    • This is the ability of computers to adapt and update processes by evaluating data and statistics. 
    • Usually this is used behind chatbots and predictive text, language translation apps, the shows Netflix suggests for you, and how your social media feeds are presented. 
    • It powers autonomous vehicles and machines that can diagnose medical conditions based on images.

    Neural Networks

      • This is a method in AI that teaches computers to process data similar to the human brain.
      • It’s a type of machine learning process, called deep learning, that uses interconnected nodes or neurons in a layered structure that resembles the human brain.
      • The end result is that it can learn from its mistakes and improve upon them, thus it attempts to solve complicated problems like summarizing documents or recognizing faces, with greater accuracy.

      Generative AI

        • This is an AI algorithm that generates new outputs based on the data they have been trained on. 
        • It uses a type of deep learning called generative adversarial networks and has a wide range of applications, including creating images, text and audio. 
        • I know this sounds complicated, especially if you are not familiar with it, but one example is ChatGPT, where it would be able to write an article from the data that was fed to it. 
        • Or you might have heard of DALL-E 2 or Midjourney, where it is able to generate images based on the text you tell the program. 
        • While there are concerns about the impact of AI on the job market, there’s also potential benefits such as freeing up time for humans to focus on more creative and value-added work.


        Okay, enough with the technical jargons, let’s move on to what you all came here for. 

        What are the top 3 AI stocks to buy in right now? 

        Now before we get to that, just a quick reminder that, while buying AI stocks allows you to benefit from the expansion and advancement of a rapidly evolving technology. 

        It is also important to conduct your own research and understand the risks associated with investing in AI stocks before you buy. 

        For example, did you know that AI stocks are relatively volatile when compared to the market index? 

        Now this could be due to many factors working behind the scenes like the macroeconomic conditions and other specific technological advancement impacting certain segments within the AI industry. 

        Now if you understand all this, then without further ado, let’s dive into the first stock, which is:

        Microsoft

        Microsoft Corporation is a global technology company. It has been around for decades and is one of the most valuable players in the technology world. 

        You have to be living under a rock to not know Microsoft and its products. 

        Microsoft creates, licenses, and sells computer software, personal computers, and consumer electronics. 

        It is one of the leading firms in the artificial intelligence sector through its AI program, Azure, which offers cloud-based artificial intelligence services and tools to businesses and software developers worldwide. 

        Recently, Microsoft has had an increasing portfolio of AI-powered products and services, giving the company the competitive edge to attract customers and retain old ones. 

        The company's 2023 Q2 adjusted earnings per share (EPS) was $2.32, higher than analysts' projected $2.29 per share. 

        In addition, the company declared an increased revenue of $52.7 billion for Q2 2023, that’s a 2% increase in revenue from 12 months ago. 

        So what makes Microsoft an AI stock, you asked? 

        Well, Microsoft has been investing in OpenAI, the company behind ChatGPT since 2019. 

        ChatGPT has the potential to revolutionize how we use the internet and change everything we do online, including writing emails, drafting sales reports, and inputting transactions. 

        Recently, Microsoft announced it would extend the partnership with OpenAI and its goal is to make AI accessible to people worldwide through its Azure cloud-based platform. 

        With such commitment to AI-powered tools, investors can expect higher earnings per share in the coming months and years. 

        Therefore, purchasing Microsoft stocks now would be a very wise investment capable of bringing financial independence in a short time. 

        Now, the second stock on the list is:

        Alphabet

        A list containing AI stocks wouldn’t be complete without discussing Google's parent company, Alphabet. 

        AI plays a crucial role in Alphabet’s core business, including recommendations and results on Google Search, YouTube, and other applications such as Google Translate. 

        In recent years, the company has significantly increased its investments in AI. This is all for its R&D process to produce better and more capable AI technology that will help its end users. 

        It’s hard to imagine a world without Google Search. According to the company, people carry out billions of searches daily; over 15% of them are new searches that no one has ever seen. 

        A few years ago, Google launched a neural network-based technique called bidirectional endorsed representations from transformers (BERT). This software helped Google understand the reason behind the new searches. 

        This tool is one of the ways Alphabet continues to leverage the benefits of AI to enhance the experience of its customers. 

        Ultimately, a major part of Alphabet’s growth has been tied to the use of AI. Without the excellent user experience offered by Google, it can be difficult to stay relevant with multiple search engines popping up in the marketplace. 

        Fortunately, the company’s investment in AI-powered technology has improved its services, retaining billions of customers. 

        And that makes Alphabet one of the leading companies in digital advertising, representing over 75% of its business last year. 

        Currently, Google shares are down 26% compared to a year ago, so this could be a great opportunity for investors to buy the stock. 

        The last stock on the list is:

        Amazon

        Amazon has been a household name for more than a decade. 

        Shareholders have enjoyed incredible investment returns in the last few years because of their growing revenue and cash flows. 

        The company increased its capital expenditures in the last five years, which grew to more than $60 billion a year prior. Most of the company's expenditure is funding large investments in technology and data centers. 

        One critical area where Amazon uses AI is its Amazon Web Services (AWS), a cloud service business. 

        AWS is the largest cloud services provider with over 30% market share. It also represents around 15.6% of Amazon’s 2022 Q4 revenue. 

        The Amazon AI-powered service provides several benefits to companies that use it, including improved security and personalized recommendations. 

        Besides the integration with AWS, Alexa (Amazon’s voice assistant) also benefits from the use of AI. Alexa can provide many benefits such as better security, companionship to lonely people, and detect acoustic sounds such as shattering glass. 

        With such impressive capabilities, Amazon can offer retail services that are seemingly impossible today in the 30 year timespan. 

        With just these two offerings, Amazon has been able to leverage AI to a great extent. We haven’t even mentioned its 250 million loyal Prime subscribers, coupled with a wide range of offerings, and excellent customer service. 

        Ultimately, the company’s ability to monetize data through AI to provide suggestions, accurate search results and content continue to drive Amazon’s retail business. 

        This makes it a viable investment option for every investor for the long term.

        The increased potential of artificial intelligence is exciting. 

        Some of its applications could revolutionize most sectors of the economy, including cybersecurity, healthcare, and foreign intelligence. 

        However, it would be best for investors in AI stocks to keep their holdings for the long term to fully realize its benefits.

        - Ivan