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Artificial intelligence stocks

Fast-paced and groundbreaking but vulnerable to governmental regulation.

Is artificial intelligence the inevitable wave of the future, or too competitive a field to risk capital? Here’s what investors should know about the benefits and risks of investing in efforts to make machines think like humans.

Artificial intelligence stocks

Few companies exclusively specialize in AI technology. But there are many companies in the tech industry with robust AI programs on deck. Select a company to learn more about what they do and how their stock performs, including market capitalization, the price-to-earnings (P/E) ratio, price/earnings-to-growth (PEG) ratio and dividend yield. While this list includes a selection of the most well-known and popular stocks, it doesn't include every stock available.

Artificial intelligence ETFs

The following ETFs track companies in the tech sector with well-developed AI programs:

  • Fidelity MSCI Information Technology Index ETF (FTEC)
  • First Trust Dow Jones Internet Index (FDN)
  • Invesco QQQ (QQQ)
  • iShares U.S. Technology ETF (IYW)
  • Technology Select Sector SPDR Fund (XLK)
  • Vanguard Information Technology ETF (VGT)

How do I buy artificial intelligence stocks?

  1. Choose a stock trading platform. If you’re a beginner, our table below can help you choose.
  2. Open your account. You’ll need to provide your ID, bank account information and Social Security number.
  3. Fund your account. Before you can start trading, you’ll need to fund your account with a bank transfer.
  4. Search for stocks. Use a stock screener to sort and filter stocks.
  5. Submit your order. Once you’ve found a security you’d like to buy, indicate how many you’d like to purchase and submit your order.
  6. Monitor your investments. Log in to your brokerage account to track the performance of your portfolio.
Client disclaimer: US Brokerage services through eToro USA Securities Inc, member of FINRA, SIPC. Crypto assets through eToro USA LLC.

What is artificial intelligence and how is it used?

Artificial intelligence (AI) is a term broadly applied to machines programmed to think like humans. This simulation of human intelligence typically requires three components: perception, reasoning and learning.

AI is becoming increasingly prevalent in today’s technology-infused world. In fact, many of us encounter artificial intelligence daily. This type of technology is applied in countless ways, but we most frequently interact with AI through smartphone virtual assistants, chatbots, cybersecurity, smart home devices and semiautonomous vehicles.

Why invest in artificial intelligence stocks?

Like most subcategories in the tech sector, artificial intelligence is on the rise. And as big names in the industry like Amazon, Microsoft and Google continue to beef up their AI programs, so too do the newer players in this space, like Catasys and Sonos.

The increasing prevalence of artificial intelligence suggests this industry will only continue to grow as we become more accustomed to the many benefits this technology offers. AI’s various applications across healthcare, finance, travel and more help cement its status as one of the biggest industries to watch in the coming years. In fact, Statista suggests that global revenue from the AI software market will grow to be worth $126 billion by 2025 — a market worth $14.69 billion in 2019.

And the good news is that there’s money in this type of technology. Don’t believe it? Simply ask Facebook, Tesla or any number of other blue-chip giants with a robust AI department at their disposal.

Beyond potential dividends, you also have the opportunity to support companies producing technology you may actually use or benefit from in the future. And there’s no denying it — advancements in the world of AI are just plain exciting. Who doesn’t want the opportunity to brag about supporting the next up-and-coming self-driving taxi fleet?

What unique risks do artificial intelligence companies face?

The single biggest threat to companies in this category is competition. High growth sectors are developing fast, and also tend to experience the highest rates of competition. There are countless companies vying to turn a profit with AI technology and this type of competition can be dangerous for investors.

Many of the smaller and more affordable companies available to invest in simply don’t make it, and the already-established names in AI are expensive to invest in. You may get in on the ground floor of something with strong potential only to find the company run out of business by fast-moving competitors six months down the line.

Another big threat to AI stocks is governmental regulation. Tech companies aren’t immune to regulatory disputes and as data and privacy protection measures tighten, some companies may be forced to reconfigure and adapt — and such steps can be time-consuming and expensive.

Artificial intelligence is exciting but can’t develop while unregulated. Governmental and corporate discussions around consumer data protection continue to evolve and investors with AI interests will need to stay alert.

Compare trading platforms

To invest in stocks or ETFs, you’ll need a brokerage account. Explore your platform options below.

1 - 5 of 5
Name Product Asset types Stock trade fee Minimum deposit Signup bonus
Stocks, ETFs, Cryptocurrency
when you sign up and deposit $100
Trade stocks in the app or online with $0 commissions. Not available in NY, NV, MN, or TN.
Client disclaimer: US Brokerage services through eToro USA Securities Inc, member of FINRA, SIPC. Crypto assets through eToro USA LLC.
SoFi Invest
Stocks, ETFs, Cryptocurrency
$10 - $100
when you open an account and place a first crypto trade of $50 - $5,000+
A free way to invest in most equities.
Stocks, Options, ETFs, Cryptocurrency
$200 in US stocks
when you open and fund an account with min. $2,000 for 3+ mos.
Trade stocks, options, ETFs and futures on mobile or desktop with this advanced platform.
Stocks, Options, ETFs, Cryptocurrency
Get a free stock
when you open a Robinhood account
Make unlimited commission-free trades in stocks, funds, and options with Robinhood Financial.
Axos Bank Self Directed Investing
when you open an account and deposit at least $1500.

Compare up to 4 providers

*Signup bonus information updated weekly.

Disclaimer: The value of any investment can go up or down depending on news, trends and market conditions. We are not investment advisers, so do your own due diligence to understand the risks before you invest.

Bottom line

There’s plenty of potential in artificial intelligence but fierce competition and governmental regulation may put a damper on stock growth for big names and up-and-comers alike.

Before you invest, review your platform options with multiple providers to find the account that best meets your needs.

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