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3 Solid AI Stocks Worth a Look for the Rest of the Year
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Artificial intelligence (AI) has led to numerous technological progressions, making 2023 a breakout year for tech companies providing AI-related products and services. Yet, skeptics are concerned about the growth of AI in 2024 as it’s an expensive undertaking and requires chips that are presently in short supply.
However, market experts believe that the AI market will grow this year and beyond as it will successfully bridge the gap between humans and machines. AI is likely to lead to technological breakthroughs in handling various data, texts, videos and images.
AI is expected to increase cerebral aptitudes with tools including virtual aids, personalized references and language understanding. Many prominent financial firms also expect AI integration to boost labor productivity and economic growth in the coming years.
With AI poised to modernize business processes, and create a congenial business environment, its market is projected to reach $305.9 billion by the end of this year, and the United States will have the largest market size, per Statista.
In reality, the AI market is estimated to witness a compound annual growth rate of 15.83% from 2024 to 2030, and eventually touch a market volume of $730.8 by 2030, added Statista.
Thanks to the AI boom, not only the tech bigwigs but also a slew of tech companies gained traction in recent times. Bespoke Investment Group added that all 67 stocks related to AI listed on the S&P 500 Index have soared 45.3% on average since November 2022, whereas the remaining 433 non-AI stocks advanced only 9.2% in the same period.
What’s more, the AI-related group of stocks on the S&P 500 has gained an average of 3.7% year to date, more than non-AI stocks’ average gain of 1.1%.
Thus, banking on solid growth prospects in the field of AI, astute investors should keep an eye on AI-related industry-leading companies to reap handsome returns. Such players are Alphabet Inc. (GOOGL - Free Report) , Nvidia Corporation (NVDA - Free Report) and International Business Machines Corporation (IBM - Free Report) .
Alphabet has transformed from only a search engine player to a cloud-computing provider. But it’s the Google search engine that has utilized AI to guide users to improve spelling while making search-related queries. At the same time, Alphabet’s products, including Gmail and Google Cloud, incorporate AI functionalities to offer various services to clients.
Anyhow, Alphabet’s cloud division is playing a pivotal role in improving the company’s top line. The Zacks Consensus Estimate for its current-year earnings has moved up 1.7% over the past 60 days. GOOGL’s expected earnings growth rate for the current and next year is 16.6% and 14.9%, respectively.
Nvidia was involved in providing graphic processors to PC manufacturers, a less lucrative market, for quite some time. However, the graphics processing unit market boomed on increased demand for AI services. Notably, the curiosity in AI came in after the launch of Open AI’s ChatGPT.
Nvidia does have competition from Advanced Micro Devices, Inc. (AMD - Free Report) , but its commitment to achieve cutting-edge technology, is keeping it way ahead of its competitors. The Zacks Consensus Estimate for its current-year earnings has moved up 0.4% over the past 60 days. NVDA’s expected earnings growth rate for the current and next year is 269.5% and 64.5%, respectively.
Its estimated revenue growth rate for the current and next year is 118.8% and 55.1%, respectively. NVDA currently has a Zacks Rank #2 (Buy).
International Business Machines is known for having created one of the most powerful AI systems, such as Watson, which is used for data analysis and various kinds of decision-making. IBM did confirm that the demand for their software and services improved recently as more customers are using AI systems.
The Zacks Consensus Estimate for its current-year earnings has moved up nearly 3% over the past 60 days. IBM’s expected earnings growth rate for the current and next year is 4.6% and 5.2%, respectively. Its estimated revenue growth rate for the current and next year is 3.1% and 4.4%, respectively. IBM currently has a Zacks Rank #2.
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3 Solid AI Stocks Worth a Look for the Rest of the Year
Artificial intelligence (AI) has led to numerous technological progressions, making 2023 a breakout year for tech companies providing AI-related products and services. Yet, skeptics are concerned about the growth of AI in 2024 as it’s an expensive undertaking and requires chips that are presently in short supply.
However, market experts believe that the AI market will grow this year and beyond as it will successfully bridge the gap between humans and machines. AI is likely to lead to technological breakthroughs in handling various data, texts, videos and images.
AI is expected to increase cerebral aptitudes with tools including virtual aids, personalized references and language understanding. Many prominent financial firms also expect AI integration to boost labor productivity and economic growth in the coming years.
With AI poised to modernize business processes, and create a congenial business environment, its market is projected to reach $305.9 billion by the end of this year, and the United States will have the largest market size, per Statista.
In reality, the AI market is estimated to witness a compound annual growth rate of 15.83% from 2024 to 2030, and eventually touch a market volume of $730.8 by 2030, added Statista.
Thanks to the AI boom, not only the tech bigwigs but also a slew of tech companies gained traction in recent times. Bespoke Investment Group added that all 67 stocks related to AI listed on the S&P 500 Index have soared 45.3% on average since November 2022, whereas the remaining 433 non-AI stocks advanced only 9.2% in the same period.
What’s more, the AI-related group of stocks on the S&P 500 has gained an average of 3.7% year to date, more than non-AI stocks’ average gain of 1.1%.
Thus, banking on solid growth prospects in the field of AI, astute investors should keep an eye on AI-related industry-leading companies to reap handsome returns. Such players are Alphabet Inc. (GOOGL - Free Report) , Nvidia Corporation (NVDA - Free Report) and International Business Machines Corporation (IBM - Free Report) .
Alphabet has transformed from only a search engine player to a cloud-computing provider. But it’s the Google search engine that has utilized AI to guide users to improve spelling while making search-related queries. At the same time, Alphabet’s products, including Gmail and Google Cloud, incorporate AI functionalities to offer various services to clients.
Anyhow, Alphabet’s cloud division is playing a pivotal role in improving the company’s top line. The Zacks Consensus Estimate for its current-year earnings has moved up 1.7% over the past 60 days. GOOGL’s expected earnings growth rate for the current and next year is 16.6% and 14.9%, respectively.
Its estimated revenue growth rate for the current and next year is 11.7% and 11.1%, respectively. GOOGL currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Nvidia was involved in providing graphic processors to PC manufacturers, a less lucrative market, for quite some time. However, the graphics processing unit market boomed on increased demand for AI services. Notably, the curiosity in AI came in after the launch of Open AI’s ChatGPT.
Nvidia does have competition from Advanced Micro Devices, Inc. (AMD - Free Report) , but its commitment to achieve cutting-edge technology, is keeping it way ahead of its competitors. The Zacks Consensus Estimate for its current-year earnings has moved up 0.4% over the past 60 days. NVDA’s expected earnings growth rate for the current and next year is 269.5% and 64.5%, respectively.
Its estimated revenue growth rate for the current and next year is 118.8% and 55.1%, respectively. NVDA currently has a Zacks Rank #2 (Buy).
International Business Machines is known for having created one of the most powerful AI systems, such as Watson, which is used for data analysis and various kinds of decision-making. IBM did confirm that the demand for their software and services improved recently as more customers are using AI systems.
The Zacks Consensus Estimate for its current-year earnings has moved up nearly 3% over the past 60 days. IBM’s expected earnings growth rate for the current and next year is 4.6% and 5.2%, respectively. Its estimated revenue growth rate for the current and next year is 3.1% and 4.4%, respectively. IBM currently has a Zacks Rank #2.