Artificial intelligence (AI) has been taking the world by storm and the stock market is no different. The AI market size has more than doubled from $95 billion in 2021 to $207 billion in 2023, and some projections believe this futuristic market could reach around $1.8 trillion by 2030.
If the artificial intelligence market reaches anywhere near these estimates, there’s a lot of potential money on the table. So here’s some inspiration for finding the best AI stocks of today and perhaps of tomorrow.
What are AI stocks?
This refers to companies directly or indirectly involved with artificial intelligence. It may be stocks whose whole business revolves around AI, or just a part of the company. It’s a fairly new theme of investing because the technology is still in relative infancy.
What are the best AI stocks to buy right now?
Unfortunately there’s no definitive way to define the best AI stocks on the market, so we’ve compiled this list of companies we think provides some of the best exposure to the AI industry while also having solid business fundamentals.
Types of AI stocks
As this industry is still developing, there are some key players, but also plenty of companies fighting to own a piece of the AI revolution. We can break down AI stocks into the following categories:
- Pure AI plays. These might be the best stocks if you want complete exposure to the AI industry. It will include businesses whose main focus is AI-related, but there’s actually very few major firms out there. From our best AI stocks list, the only pure AI stock would be C3.ai.
- Partial AI businesses. There are now plenty of stocks that are looking to make money with AI, but it’s not the only source of revenue. Examples from the best AI stocks list included NVIDIA, Arm, Oracle and Micron Technology.
- Stocks heavily investing in AI. This category includes firms looking to integrate AI into the business to improve things, or making speculative investments in early-stage AI companies and examples include the likes of Microsoft (part-owners of OpenAI), Alphabet, Baidu, Tesla, and Amazon.
How to invest in AI stocks
- Open a share dealing platform. Whether you want to invest directly in AI stocks or use an investment fund, you’ll need to open a share trading account.
- Fund your account. The next step is to deposit money into your account to buy shares or invest in a fund, either by bank transfer or using a debit card.
- Choose your AI stocks. Either select a direct or indirect AI investment and research the stock you’re considering. Once you know what you want, find the AI stocks on your platform.
- Hit buy. It’s as simple as that.
Platforms for investing in the best AI stocks
The majority of AI-related investments right now are located in the US. America is the world’s global tech hub, so this makes sense. If you want to invest in leading AI firms, you’ll want a platform that lets you buy US shares from the UK, and more specifically, the Nasdaq stock exchange (where most AI stocks are listed).
If possible, it’s also worthwhile using an investing platforms with low or no commissions for accessing AI stocks abroad and some examples include:
There are plenty of top AI stocks located outside the US and this is likely to increase over time as more investment flows in. To access global stock markets to find these up-and-coming AI stocks, a few examples of platforms with a wide choice of investments available include:
Advantages of AI stocks
Here’s a summary of the potential benefits of investing in a futuristic industry that’s moving faster than a robot flipping pancakes:
- The potential for outsized gains in the long run
- Becoming a shareholder in companies utilising the latest technology
- Who knows where the limit lies for AI stocks
- Loads of firms are already investing heavily in AI
- Growth could be exponential
Risks of AI stocks
You should also consider the downsides. Although the concept of AI is no longer science fiction, there are some key risks to be aware of:
- There’s no guarantee the industry will be profitable
- Most of the technology is still in early stages of development
- It’s impossible to predict which AI stocks will come out on top in the years ahead
- No one knows yet what kind of impact AI will have
- Strict regulations may hamper the growth of AI stocks
- There could be political risks (the US has recently banned exports of AI chips to China)
- Likely no dividends paid for a long time
- Opportunity to invest in a fast-growing sector
- Possibility of huge gains
- You can get AI exposure by investing in already-established tech stocks
- AI investments could be more volatile and risky
- Difficult to pick the best AI stocks of the future
- The AI industry may not end up being hugely profitable
The robots haven’t taken over, but it appears artificial intelligence is here to stay. Finding the best AI stocks to invest in presents a challenge because no one knows just yet how much of a role AI will play in the future of human civilization. Sorry for sounding philosophical.
There’s no need to worry about AI being a threat to human existence, not just yet anyway. If you want to make money with AI stocks, make sure you understand the risks and aim for companies you think will still be around in 10 or more years. This is challenging with AI technology that’s still in its infancy, but try your best.
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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