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Artificial intelligence stocks
You might think that AI is just for sci-fi movies, but it's slowly working its way into our day-to-day lives. We cover some of the best AI stocks to invest in.
Artificial intelligence (AI) systems do things that humans would use intelligence for. These systems may include planning, learning and problem-solving. There are loads of examples of AI in science fiction shows like Westworld, Humans and Black Mirror, albeit all with a bit of a negative swing on it.
No doubt, you come across AI in your everyday life – whether it’s a small task like asking Alexa to turn your lights on, getting the Roomba to clean your living room or having your registration number recognised by a traffic camera.
There are some revolutionary and even life-saving uses for AI, too, such as self-driving cars and applications that can help spot tumours in X-rays.
Find out what popular tech stocks are making moves in artificial intelligence and how you can invest in some of them.
How to invest in AI stocks
- Open a share dealing platform. Whether you want to invest directly in AI stocks or invest in an AI exchange-traded fund (ETF), you’ll need to open an account with a trading platform or brokerage.
- Fund your account. You need to put money into your account to buy shares or invest in a fund, either by bank transfer or debit card.
- Choose your investments. Either select an investment fund, or if you want to buy shares, do some research into the companies you’re considering. Once you know what you want, find the stocks on your platform.
- Hit buy. It’s as simple as that.
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AI stocks
These are some of the companies making moves in AI.
Amazon
Of course, you’ll have heard of Amazon. It powers the Alexa-enabled devices in your home that turn on your lights, set your alarms and notify you of what’s being delivered. It’s more sophisticated than many even understand as it can recognise who it’s talking to and even if you’re whispering.
On the Amazon site, AI determines what adverts to show you and what products you may be interested in based on your previous purchases (although it believes that my slow cooker was the first in a collection of slow cookers).
There’s little doubt that Amazon will grow its AI even further beyond where it is now.
Alphabet
You probably know Alphabet by its child’s name, Google. Of course, Google is an amazing and revolutionary search engine that’s even been turned into a verb (a rare accomplishment also awarded to FaceTime and Hoover).
Alphabet is aiming to make its AI systems accessible to everyone under an open-source licence. It is building AI into its search function as well as its advertising system. Autonomous driving technology company Waymo is also a subsidiary of Alphabet.
Nvidia
Nvidia has been a way for investors to get access to AI for quite some time. It creates technology central to AI. Its graphics processing unit (GPU) helps to power autonomous vehicles, cloud computing and high-performance gaming. These are areas that require deep learning.
Nvidia is partnered with Sony and, in January 2020, unveiled a car at the Consumer Electronics Show in Las Vegas.
IBM
International Business Machines (IBM) sells AI tool kits for healthcare, cybersecurity, financial services, supply chain, video and customer services. It’s well-known for its chess computer “Deep Blue” beating chess grandmaster Garry Kasparov at a game of chess in 1997.
It aims to infuse AI into everything we do to help make more accurate predictions, automate decisions and processes and optimise employee time. It’s got “Watson”, which brings AI tools and apps together with data. There are loads of pre-built Watson applications, such as the Watson Assistant and Watson Discovery, or you can use Watson APIs, such as visual recognition, text to speech or personality insights.
Apple
Apple has tons of AI. We’ve been asking Siri to send texts, do quick maths sums and set our alarms for years. This feature makes use of machine learning and is the most obvious use of AI, but there are actually loads of examples of AI in the background.
Say you’re drawing with the Apple Pencil, and you lean your palm against the screen. Machine learning means that the iPad knows not to scribble in the area where your palm rests.
Then, in the Photos app, the iPhone sorts your photos into categories and can recognise faces in photographs and sort them. Assign your niece’s name to a photograph of her, and you can search the name in the app to find every photo you’ve got of her.
AI ETFs
If you’re looking for some exchange-traded funds that invest in companies making marks in AI, then you’re in the right place.
ARK Industrial Innovation ETF (ARKQ)
Key holdings:
| Ticker | Company name |
|---|---|
| TSLA | Tesla Inc |
| MTLS | Materialise NV |
| TWOU | 2U Inc |
| XLNX | Xilinx Inc |
| PRLB | Proto Labs Inc |
| DE | Deere & Co |
| JD | JD.Com Inc |
| TRMB | Trimble Inc |
| GOOG | Alphabet Inc |
| SSYS | Stratasys Ltd |
Global X Robotics & Artificial Intelligence Thematic ETF (BOTZ)
Key holdings:
| Ticker | Company name |
|---|---|
| NVDA | NVIDIA Corp |
| ABBN | Abb Ltd |
| ISRG | Intuitive Surgical Inc |
| 6861 | Keyence Corp |
| 6954 | Fanuc Corp |
| RSW | Renishaw PLC |
| TECN | Tecan Group AG |
| 6645 | Omron Corp |
| 6383 | Daifuku Co Ltd |
| 6506 | Yaskawa Electric Corp |
iShares Robotics and Artificial Intelligence ETF (IRBO)
Key holdings:
| Ticker | Company name |
|---|---|
| PINS | Pinterest Inc |
| 1810 | Xiaomi Corp |
| AMD | Advanced Micro Devices Inc |
| 6594 | Nidec Corp |
| YNDX | Yandex NV |
| 66570 | LG Electronics Inc |
| Mail ru Group Ltd | |
| 3888 | Kingsoft Corp Ltd |
| NVDA | NVIDIA Corp |
| DOYU | Douyu International Holdings Ltd |
AI Powered Equity ETF (AIEQ)
Key holdings:
| Ticker | Company name |
|---|---|
| GOOGL | Alphabet Inc |
| AMZN | Amazon.com Inc |
| AAPL | Apple Inc |
| AMD | Advanced Micro Devices Inc |
| Cash Component | Cash Component |
| MSFT | Microsoft Corp |
| TDOC | Teladoc Health Inc |
| TSLA | Tesla Inc |
| LVGO | Livongo Health Inc |
| TMO | Thermo Fisher Scientific Inc |
AI Powered International Equity ETF (AIIQ)
Key holdings:
| Ticker | Company name |
|---|---|
| SHOP | Shopify Inc |
| SAP | SAP SE |
| TM | Toyota Motor Corp |
| AZN | AstraZeneca PLC |
| RHHBY | Roche Holding AG |
| Cash Component | Cash Component |
| SIE | Siemens AG |
| GRVY | Gravity Co Ltd |
| TEAM | Atlassian Corporation PLC |
| SPOT | Spotify Technology SA |
Are AI stocks a bubble waiting to burst?
Finder expert Mark Tovey answers
The hype surrounding AI stocks has drawn comparisons to the dot-com bubble of the early 2000s. Companies like Nvidia, Microsoft and other tech giants have experienced significant stock surges as AI adoption ramps up.
However, concerns are growing that the AI market may be overvalued, similar to the speculative bubble in internet stocks at the turn of the millennium. Despite these warnings, investors continue to show enthusiasm, with tech giants Apple, Microsoft, Alphabet, Nvidia and Amazon investing heavily in AI and experiencing significant market cap growth.
Analysts suggest that while AI presents a boatload of opportunities, revenue generation may be a long way off for some contenders on the field. It’s wise to remain sceptical of companies with a big story but no profits.
As the industry evolves, speculators looking to “get rich quick” could get burnt. On the other hand, investors with a longer-term perspective could do well by buying shares in companies that provide the “foundational technologies” that make AI possible – such as natural language processing (NLP), machine-learning algorithms, graphic processing units (GPUs) and even robotics.
Compare investment platforms to trade AI stocks
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All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
Bottom line
AI stocks are all the rage right now, and you can get exposure by investing in well-established tech giants like Amazon, Alphabet, Meta and Apple. These companies are massively profitable and well-diversified. There are also small-cap companies, many profitless, that offer a leveraged play on the AI space. These are highly risky investments that could easily go to zero.
Fortunately, you can outsource the job of picking your AI stocks to experts who manage funds, like the ARK Industrial Innovation ETF (ARKQ) and Global X Robotics & Artificial Intelligence Thematic ETF (BOTZ).
The hype around AI stocks has drawn comparisons to the dot-com bubble, raising concerns about overvaluation in the market. Tech giants like Nvidia and Microsoft have experienced significant stock surges, causing warnings about a potential bubble to louden. Government regulations pose a potential risk to AI stocks, as seen with the Italian ban on Microsoft’s ChatGPT. Investors should carefully consider the risks and long-term prospects before investing in AI stocks.
Frequently asked questions
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
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