AI has been used by large corporations for many years now. But artificial intelligence has been mostly hidden from public view. One of the most important developments in 2022 was the release of ChatGPT to the general public. Now it could be the best time to start investing in AI stocks.
PS This is not an investment advice, just as I see things playing out. Do your research and consult professionals.
For the first time, people could see how AI can help them in their everyday lives. This is one of the reasons why the AI revolution is so important. I will change every job.
If your work involves coming up with ideas and solving problems, you will see a lot of change in the next couple of years.
Let’s take a look at what businesses can get the most out of improvements in artificial intelligence and what drives the share prices. You can also follow some of these businesses on Twitter.
You can check the live protfolio here https://app.composer.trade/symphony/pbvScFcYMJzuZAgzSGy3/details
- (MSFT): $ (+0%)
- (NVDA): $ (+0%)
- (META): $ (+0%)
- (GOOG): $ (+0%)
- (AMZN): $ (+0%)
- (ADBE): $ (+0%)
- (AI): $ (+0%)
- (IBM): $ (+0%)
- (TSM): $ (+0%)
- (ASML): $ (+0%)
Investing in AI stocks: Technology companies
Tech companies are AI natives. Most of them have been using AI internally for years. Most of them are the main contributors to artificial intelligence research. You would think this means that the benefits of AI are already priced into their enterprise value.
I don’t think so!
Here’s why. People are really bad at noticing exponential growth in real time. Even when we look back and see exponential growth, when we plan for the future, we think everything will be the same.
In the case of artificial intelligence, it is essential to understand that growth is unbelievably fast.
Moore’s law says that computers get two times faster in two years. Even if AI would get more power just from the computers, it would double every two years.
But that’s not all!
Human thinking and improvements in AI algorithms make the capability increase every six months. This means that during the time it takes computers to get two times faster, AI capabilities will increase 16 times. Multiplying that with the doubling of processor speeds, we get that in 2 years, AI will get 32 times more powerful. Or in other words, if you need 10 million dollars today to create an AI system, it would cost about 5000 dollars after five years.
Or in yet another angle. For the price of current systems, you would get an AI that is one thousand times more powerful.
The acceleration is accelerating!
You may know that exponential growth bends upwards on the linear graph, but on an exponential graph, it’s a straight upward line. Now the line is bending up even on the exponential scale.
Most likely, we have not priced in the value of the accelerating exponential growth into the stock prices of top technology companies.
Even the P/E values seem insane, but they may be insanely cheap considering the next 5 to 10 years.
Now, the AI acceleration accelerates, we have a double exponential growth. I came up with a symbol that would illustrate the concept nicely AI2. The symbol includes AI, but it also includes the second power means that acceleration is speeding up. It’s not technically correct, but a good way to illustrate the concept.
But it’s not just the big players who can benefit from the AI boom. Check out our artificial intelligence consulting services.
AI companies
Then there are the special types of businesses that specialize in artificial intelligence technology. Organizations like OpenAI. These businesses build AI systems for others. Similarly, to Amazon Web Services owning IT infrastructure that it rents out to other businesses, there will be Amazon AI Services that rent out artificial intelligence to other businesses.
Some IT infrastructure companies could switch to providing AI cloud services. For example, Cloudflare, Oracle, and IBM.
These businesses could develop their own AI systems or work with artificial intelligence researchers to scale their AI tools globally. These businesses would be very good at running hardware infrastructure, and the competitive advantage would probably be just economies of scale.
When they are good at using AI to improve their processes, it will lead to a positive feedback loop that might make them outpace expectations.
Here you can check out the Twitter accounts of the main AI companies.
OpenAI stock / ChatGPT stock
OpenAI stock is not publicly traded. ChatGPT stock is not publicly traded. OpenAI, the owner of ChatGPT, is a private company. It’s not on any stock market exchange.
At a recent conference in Abu Dhabi, Sam Altman, the Chief Executive of OpenAI, stated their position clearly. The Microsoft-supported company, which developed ChatGPT, is not preparing for a public offering in the near future.
“When we develop super intelligence, we are likely to make some decisions that most investors would look at very strangely.”
Sam Altman
So far, OpenAI has managed to secure $10 billion in funding from Microsoft. This places the company’s valuation close to $30 billion as it continues to expand its investment in computing capabilities.
What company owns OpenAI? OpenAI has a variety of investors such as Microsoft, Khosla Ventures, Reid Hoffman, and a few others. As it’s a private company, they haven’t released specific details about who owns what.
Microsoft, MSFT
As we approach the second half of 2023, (MSFT): $ (+0%) continues to be a dominant player in the tech industry, with a particular emphasis on artificial intelligence (AI). The company’s commitment to AI innovation is evident in its numerous initiatives and investments in this field, which are expected to drive growth and solidify its market position.
Artificial intelligence-driven gains can propel Microsoft Corp. to join Apple Inc. in the elite category of stocks with a market capitalization of more than $3 trillion.
Morgan Stanley via Fortune
Microsoft’s AI driver is the exclusive deal with OpenAI.
Microsoft’s AI capabilities are being integrated across its product portfolio, enhancing offerings in cloud computing, business analytics, and productivity tools. This has led to increased adoption by businesses seeking to leverage AI for operational efficiency and strategic insights.
In terms of financial performance, Microsoft has shown steady growth in the first half of 2023. As of June 22, 2023, the company’s stock price stands at $336.93, reflecting a positive trend from the start of the year. The company’s revenue for the fiscal year ending March 31, 2023, was reported at $138.7 billion, with a net income of $46.3 billion.
Looking ahead, Microsoft’s continued investment in AI, coupled with its robust financial performance, suggests a promising future for its stock. The company’s ability to innovate and adapt to market trends, as well as its strong financial health, make it a potentially attractive option for investors. However, as with any investment, potential investors should conduct their own research and consider their risk tolerance and investment goals.
Nvidia Corp, NVDA
The future of (NVDA): $ (+0%) , particularly with a focus on its GPUs, appears to be on a positive trajectory. Nvidia is set to launch new GPU models, including ‘Ampere Next Next’ in 2024, which are expected to further solidify the company’s position in the market.
In 2023, the company has seen a steady increase in its stock price, starting the year at around $148 and reaching a high of $439.9 by mid-June. This upward trend reflects the market’s positive response to Nvidia’s strategic moves and technological advancements in the GPU sector.
Moreover, Nvidia’s optimism about GPU supplies in 2023, backed by increased investments in manufacturing, is likely to boost GPU availability and potentially drive further growth in the company’s stock.
Meta, META
In 2023, (META): $ (+0%) , formerly Facebook, continues to make significant strides in the realm of artificial intelligence (AI). The company’s commitment to AI innovation is evident in its numerous initiatives and investments in this field, which are expected to drive growth and solidify its market position.
In terms of financial performance, Meta has shown steady growth in the first half of 2023. As of June 22, 2023, the company’s stock price stands at $280.01, reflecting a positive trend from the start of the year. The company’s revenue for the fiscal year ending March 31, 2023, was reported at $138.7 billion, with a net income of $46.3 billion.
Looking ahead, Meta’s continued investment in AI, coupled with its robust financial performance, suggests a promising future for its stock. The company’s ability to innovate and adapt to market trends, as well as its strong financial health, make it a potentially attractive option for investors. However, as with any investment, potential investors should conduct their own research and consider their risk tolerance and investment goals.
Alphabet Inc, GOOG
As we progress through 2023, (GOOG): $ (+0%) , the parent company of Google, continues to make significant strides in the realm of artificial intelligence (AI). The company’s commitment to AI innovation is evident in its numerous initiatives and investments in this field, which are expected to drive growth and solidify its market position.
In terms of financial performance, Alphabet has shown steady growth in the first half of 2023. As of June 22, 2023, the company’s stock price stands at $121.99, reflecting a positive trend from the start of the year. The company’s revenue for the fiscal year ending March 31, 2023, was reported at $138.7 billion, with a net income of $46.3 billion.
Looking ahead, Alphabet’s continued investment in AI, coupled with its robust financial performance, suggests a promising future for its stock. The company’s ability to innovate and adapt to market trends, as well as its strong financial health, make it a potentially attractive option for investors. However, as with any investment, potential investors should conduct their own research and consider their risk tolerance and investment goals.
Amazon.Com Inc, AMZN
As of mid-2023, (AMZN): $ (+0%) continues to be a big player in the AI space, with its cloud computing platform, Amazon Web Services (AWS), leading the charge. AWS offers a comprehensive suite of AI services and tools that cater to various business needs, from machine learning to natural language processing. This has been highlighted by analysts such as Morgan Stanley’s Brian Nowak, who emphasized the rapid pace of AI innovation within AWS and its full AI tech stack.
Moreover, Amazon’s financial performance has been robust, with a market capitalization of approximately $970 billion. The company’s stock price has seen a steady increase throughout 2023, starting the year at around $85 and reaching $128.68 by mid-June.
However, Amazon’s future is not without challenges. The company’s AI development is heavily tied to its cloud services, which face stiff competition from other tech giants like Microsoft and Google.
Despite these challenges, Amazon’s continued investment in AI and its strong financial performance suggests a promising future for its stock. The company’s ability to leverage AI to drive innovation and efficiency across its vast ecosystem of services will likely continue to provide a competitive edge and fuel its growth in the coming years.
AI technology has the potential to benefit AMZN’s product development, marketing, sales, operations, finance, human resources, and social responsibility practices. For example, natural language processing, computer vision, generative AI, and quantum machine learning could improve the quality of AMZN’s products and services. AI-powered data analytics, personalization, and recommendation systems could optimize marketing and sales strategies, while automation, robotics, forecasting, and fraud detection could streamline operations and finance functions.
Adobe, ADBE
As we look ahead to the rest of 2023, (ADBE): $ (+0%) is poised to continue its growth trajectory, largely driven by its AI-powered products and services. Adobe’s AI platform, Adobe Sensei, has been a game-changer in the creative software industry, offering features like auto-tagging and advanced image editing, which are integrated across Adobe’s suite of products. This has not only improved the user experience but also increased efficiency for professionals in the creative industry.
In Q1 2023, Adobe reported a strong financial performance with revenues of $3.09 billion, a significant increase from the previous year. The company’s net income also rose to $955 million, reflecting the strong demand for its creative software products. Adobe’s stock price has been on an upward trend throughout the first half of 2023, reaching a high of $495.18 in June.
Adobe’s continued investment in AI and machine learning technologies, coupled with the increasing demand for creative software solutions, is expected to drive the company’s growth in the remainder of 2023. The company’s focus on innovation and its robust product portfolio, including Adobe Creative Cloud, Document Cloud, and Experience Cloud, will likely contribute to its market position and financial performance.
AI technology will significantly impact ADBE’s business operations. Generative AI will be used to enhance Creative Cloud apps and Adobe Express, facilitating creative brainstorming and exploration for artists. Sensei-powered features such as Neural Filters, Sky Replacement, and Content-Aware Fill will enable maximum creativity and precision across ADBE’s products.
C3Ai Inc, AI
(AI): $ (+0%) , a leading provider of enterprise AI software for accelerating digital transformation, has shown a promising trajectory in 2023. The company’s stock has seen a significant rise, with a notable spike in trading volume. This is largely due to the company’s innovative AI products and services that have been well-received in the market. The company’s commitment to developing advanced AI solutions has been a key driver of its growth.
In particular, C3 AI Suite, an application development and runtime environment that is designed to enable organizations to develop, deploy, and operate large-scale AI, predictive analytics, and IoT applications, has been a game-changer in the industry.
The company’s focus on AI-driven applications for industries like energy management and predictive maintenance has also been a significant factor in its growth. As we move further into 2023, C3.ai is expected to continue its upward trajectory, driven by its commitment to innovation and the growing demand for AI solutions in various industries.
C3.ai provides enterprise AI software and applications and has a bright future in the AI market. The company offers a unique approach to automating actions for enterprises. The company will continue to develop AI applications for various industries, such as energy, healthcare, manufacturing, defense, and banking. To expand its customer base and partnerships, C3.ai will need to differentiate itself by providing superior quality, performance, scalability, security, and customer satisfaction.
IBM, IBM
As we move further into 2023, (IBM): $ (+0%) continues to make significant strides in the field of AI, with a particular focus on generative AI. The company’s AI research division has been at the forefront of developing innovative AI technologies, including Project Debater, an AI system that can engage in live debate with humans, and AI FactSheets, a framework for increasing transparency in AI systems. These advancements have positioned IBM as a leader in the AI space and have contributed to the company’s financial performance.
In the first half of 2023, IBM’s stock has been flat, starting the year at around $142 and reaching $139 in June. The company’s Q1 2023 revenues were reported at $17.73 billion, with a net income of $955 million, reflecting the strong demand for its AI solutions.
Looking ahead, IBM’s continued investment in AI and its commitment to developing advanced generative AI technologies are expected to drive the company’s growth. The company’s focus on AI-driven applications for industries like healthcare, finance, and cybersecurity, among others, will likely contribute to its market position and financial performance.
Taiwan Semiconductor Manufacturing Ltd, (TSM)
As we progress through 2023, (TSM): $ (+0%) , the world’s largest dedicated independent (pure-play) semiconductor foundry, is poised for continued growth, driven by its innovative AI products and services. TSMC’s advanced manufacturing processes, including its 3nm and 2nm technology, are pivotal in the production of high-performance AI chips used in various applications, from data centers to autonomous vehicles.
In Q1 2023, TSMC reported a strong financial performance with revenues of $35.43 billion, a significant increase from the previous year. The company’s net income also rose to $3.16 billion, reflecting the strong demand for its advanced semiconductor solutions. TSMC’s stock price has been on an upward trend for the first half of 2023.
Looking ahead, TSMC’s continued investment in AI and its commitment to advancing semiconductor technology are expected to drive the company’s growth. The company’s focus on AI-driven applications for industries like automotive, high-performance computing, and IoT, among others, will likely contribute to its market position and financial performance.
ASML Holding NV, ASML
(ASML): $ (+0%) , a leading supplier of photolithography systems for the semiconductor industry, is poised for continued growth, driven by its innovative products and services. ASML’s advanced lithography machines, which are critical in the production of high-performance chips used in AI applications, have positioned the company as a key player in the semiconductor industry.
In Q1 2023, ASML reported strong financial performance with revenues of €4.4 billion, a significant increase from the previous year. The company’s net income also rose to €1.33 billion, reflecting the robust demand for its advanced lithography systems. ASML’s stock price has been on an upward trend throughout the first half of 2023, reaching a high of $735.93 in May.
Looking ahead, ASML’s continued investment in research and development and its commitment to advancing lithography technology is expected to drive the company’s growth. The company’s focus on AI-driven applications for industries like automotive, high-performance computing, and IoT, among others, will likely contribute to its market position and financial performance.
What ChatGPT suggested for investing in AI stocks?
Finally, I asked ChatGPT to make its list of AI stocks. It differes by on position. I don’t have AMD on the list instead I have Meta which will probably get more value out of AI. Porvided Zuck doesn’t go crazy as he did with the metaverse.
Why is investing in AI stocks considered a smart move?
Investing in AI stocks is considered a smart move due to the rapid growth and transformative potential of artificial intelligence. AI is being integrated into a wide range of industries, from healthcare to finance, driving efficiency and innovation. As a result, companies that are leaders in AI are poised for significant growth, making their stocks potentially lucrative investments.
What are some potential benefits of investing in AI stocks?
One of the key benefits of investing in AI stocks is the potential for high returns. As AI continues to evolve and become more integrated into our daily lives, companies at the forefront of this technology stand to gain significantly. Additionally, investing in AI stocks allows investors to diversify their portfolios and participate in the growth of one of the most innovative sectors of the economy.
How does the future of AI technology look like, and how does it impact the decision to invest in AI stocks?
The future of AI technology looks incredibly promising, with advancements being made at a rapid pace. AI is expected to become more sophisticated and integrated into a variety of sectors, from healthcare to finance to transportation. This widespread adoption and continuous innovation make AI stocks a potentially smart investment, as companies leading in this space are likely to experience significant growth.
What should investors consider when investing in AI stocks?
When investing in AI stock, consider the company’s position in the AI market, the practical applications of its AI technology, and its overall financial health. It’s also important to consider the potential risks, as with any investment. Despite the potential for high returns, AI stocks can also be volatile and subject to fast-paced changes in the tech industry.