Artificial Intelligence Stocks: Best AI Stocks to Watch in 2023
The Artificial Intelligence race is heating up as companies and countries continue to develop intelligent machines that are able to work and interact with humans.
Artificial intelligence companies and artificial intelligence stocks are cropping up at an impressive rate, thanks to increased adoption and utilization of emerging technology.
On the topic of investing in AI stocks, what are potentially the best artificial intelligence stocks on the market in 2023?
Table of Contents
Britain's $1.4 Billion AI Push
Britain is one of the nations that have shown a keen interest in AI technology, as it sees it secure its future place in the world and global economy.
It joins the likes of China and the US, which have invested large amounts of capital into the technology, which is poised to revolutionize various sectors and enhance efficiencies. Japan, Canada and South Korea are also countries investing much more in AI technology.
US tech giants, European telecom firms, as well as Japanese venture capitalists and the UK Government, have all come together to counter Chinese ambitions.
The group have funded a total of $1.4 billion in investment as they explore various uses for the technology in the development of more efficient and accessible products and services.
Increased investments in AI have helped to fuel renewed interest in machine learning stocks, as the technology continues to evolve, spurring exciting innovations.
Given that AI presents one of the biggest commercial opportunities for businesses today, artificial intelligence companies should continue to elicit strong interest from investors worldwide.
However, knowing which AI company to invest in can be a challenge, given that the industry is a little bit complicated.
There are several things that one ought to pay attention to in order to discover the best AI stocks.
AI companies don't sell products or services as other companies do. Instead, AI-focused companies develop systems that they use to enhance their internal operations.
Such companies also develop platforms to perfect various technologies.
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What to Consider When Investing in AI Stocks
Before deciding to invest in the potentially best AI stocks there are a number of points that one should keep in mind. These are the key aspects investors and traders should consider:
Risks Involved in Artificial Intelligence Stocks
- Understanding the risks involved is an essential aspect of any investment strategy.
- AI stocks come with different sets of risks, given that artificial intelligence companies operate across different sectors.
- The risk often boils down to the practical problems in the industry sector that a potential AI investment is operating in.
For example, DeepMind, a company now owned by Google, experienced difficulties in 2016 over the major public controversy surrounding its data-sharing arrangements with Britain's National Health Service.
The more practical problems that an AI artificial company is planning to solve, the more risk exposure an investor has to contend with.
AI companies that limit their operations to a specific segment with limited problems are perhaps some of the potential best to invest in, as they stand a better chance of addressing a particular need.
It's all in the niche.
This focus allows them to deliver their product more reliably, and have a better chance of generating significant returns and higher shareholder value.
Fast forward to our current year of 2023, the UK appears to favour innovation over regulation in regard to AI technology.
The UK plans to move away from the EU's regulatory regime (as stated in 2022 UK's AI Regulation Policy Paper and AI Action Plan) in order to establish its own individual intellectual rights laws, alongside embracing the innovation factor.
Investors and traders should always implement risk management strategies, to effectively manage the risks associated with investments and trades.
Pick an Industry Specific to AI Stocks
- Just like in any other investment, it is important to specialize in AI stocks with exposure to your industry of choice.
- Artificial intelligence companies are spread all over, from the medical industry to the auto sector, as well as manufacturing.
- AI stocks with exposure to the healthcare sector, together with natural language processing, is a good example of industry-specific.
The healthcare sector is also poised to benefit a great deal, as AI will be used for disease diagnosis as well as patient care, and it will also be used in the discovery of new drugs. You can also hypothesise the potential between AI and the genomics industry (and hence, genomic stocks).
AI companies with exposure on these two fronts should continue to elicit strong interest from institutional investors, given their solid long-term prospects.
Big Data in Artificial Intelligence
- Artificial intelligence is all about data, which acts as the fuel for driving AI Systems.
- Just as silicon semiconductors spearheaded the computing revolution, data is the single catalyst driving artificial Intelligence companies.
- While it is impossible to measure the quality of data, AI companies with the best kind of data stand a better chance of success in the burgeoning space.
- The best kind of data when it comes to artificial intelligence is one that no one else has.
An AI company with a unique data set stands a better chance of developing to the highest degree in terms of in-class AI systems that can generate significant value.
Google, for instance, being the biggest search engine has exposure to vast amounts of data that it can use to come up with unique AI systems.
In March 2023 Google launched its own Generative AI solution, an AI-powered Chatbot named "Bard" - possibly the largest competitor to the Microsoft-backed ChatGPT AI software.
Amazon is another company perfectly positioned to track people's shopping patterns and come up with unique AI systems given the amount of data they possess.
Unsurprisingly, Amazon Web Services (AWS) is working on various generative AI-powered solutions in the year 2023 in order to enhance their business tools in the AWS library.
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What are the Best AI Stocks to Watch in 2023?
For one to gain exposure in the AI sector, there are various types of companies and hence, AI stocks that they can buy.
- The first set of companies is those that already have exposure to vast amounts of data that they can use to come up with various AI systems.
Tech giants with massive operations that involve direct interaction with people are some of the most sensical in this case.
These include some of the most well-known tech stocks, mentioned below:
Alphabet Inc (GOOG)
- Google Cloud plans to make AI accessible to everyone by reducing data requirements.
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- Amazon's AWS Services is enabling Machine Learning and AI services at a reasonably low cost for enterprises.
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- Remember IBM's 2010 Watson computer? The AI platforms is in development to assist healthcare, workplace, advertising and more.
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- MSFT, as one would expect, is integrating AI from all angles possible – From productivity apps, to humanitarian initiatives.
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Meta - formerly Facebook (FB)
- To no surprise, FB is fully integrating the capabilities of AI – Namely, to train machines to act in a similar way to humans.
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Secondarily, there are numerous companies who are either emerging companies, or have existed for the long-term but are now shifting the business focus to AI.
In the areas of transportation, medical, productivity, among others, there are a select few particularly gaining popularity and reputation as quality AI stocks.
Please keep in mind, the chosen stocks are selected based on the author's methodology. We outline some of these, below:
DocuSign, Inc. (DOCU)
- The e-signature provider is projected to continue dominating market share with its AI-powered contract management, plus, DOCU retains 1 billion users.
- DOCU is likely to be faced with upcoming competition, however with the user base, the scalability is hard to match.
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Palantir Technologies Inc. (PLTR)
- Serving both businesses and government with secure data analytics software, there is promising speculation around PLTR as they move into AI solutions for space exploration.
- Despite its two decades in existence as a company, it is yet to be profitable.
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- An enterprise AI software provider, C3.ai's software-as-a-service serves internationally, from defence, aerospace, to oil; an impressive customer base so far.
- The stock is young and hence volatile, which naturally heightens its risk profile.
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NICE Ltd (NICE)
- A compliance and customer interactions software, NICE's AI cloud platform adoption is on the rise.
- Compared to other AI stocks, NICE is not as popular of an AI stock pick.
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AI Medical Stocks: Top 3
The medical industry is projected to be one of the industries which benefit most from AI.
Below are some of the most discussed AI medical stocks:
Medtronic PLC (MDT)
- MDT holds the only approved AI software used for colonoscopy, GI Genius.
- Healthcare reform in the US makes the stock's future uncertain, as this is their main market saturation.
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- Currently a very newsworthy stock, NVDA partnered with AstraZeneca in April 2021 to introduce an AI-generative model in drug analysis.
- Given NVDA is a hype stock at the moment, the share price could be inflated.
What do you think of the Nvidia stock? Trade the CFD or Invest today.
Google Inc (GOOG)
- Google's DeepMind project, mentioned above, merged with Google Health and now has the capability to identify breast cancer via its AI engine.
- While GOOG has competition in the market, it is to be seen who outperforms in this vertical.
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What are the Best AI ETFs to Watch?
Companies that enable other companies to accumulate a significant amount of data would also be worth reviewing in regard to AI investment stocks.
Artificial Intelligence Exchange Traded Funds (ETFS) align with this category.
AI ETFs are funds that invest in companies engaged in the development of products and services, based on AI technology.
Below we list the top 4 best AI ETF CFDs to invest in:
- Technology Select Sector Fund SPDR Fund ETF CFD (XLK)
- Vanguard Information Technology ETF CFD (VGT)
- First Trust Dow Jones Internet Index ETF CFD (FDN)
- iShares US Technology ETF CFD (IYW)
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Are AI Stocks a Buy?
The development of AI is still in a relatively early stage.
For that reason, it could take some time before one is able to recoup a substantial amount of returns from AI Stocks.
Determining the size of the AI market is difficult; however, the market size is poised to grow exponentially with the integration of the technology in various sectors.
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What are the top 3 AI stocks to watch?
The answer to such questions is always dependent on each individual investor and remains subjective. Potentially some of the leading companies in AI tech development include Microsoft (MSFT), Alphabet (GOOG), NVIDIA Corp (NVDA), and C3.ai (AI).
Can I buy shares in AI?
It is possible to buy shares in AI companies easily through a trusted and verified online broker. After registering an account an individual can purchase shares directly of any given AI company; there are various sub-niches within AI solutions which can be explored and considered the activity of investing in AI.
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