AI stocks are getting more popular by the day. As far as we can tell, this industry will continue to grow. AI is a game changer, as demonstrated by tech earnings, which have seen a rise in AI stocks and record revenue from several corporations. With applications across multiple industries, generative AI has emerged as a key investment criterion for many businesses. It has the power to alter our lives in more ways than we could ever conceive, and businesses see enormous potential in this industry.
In the upcoming years, those who do not invest in AI risk falling behind and becoming obsolete. It's time to invest in businesses expected to succeed this year if you want to take full advantage of the hype around AI.
Here are the best AI stocks for 2024 that you need to add to your portfolio.
Advanced Micro Devices (NASDAQ: AMD), the largest rival of Nvidia (NASDAQ: NVDA), is doing all in its power to dominate the AI race. The tech company established a name for itself in the market and has maintained a competitive advantage. It is developing chips with AI. Several companies use AMD CPUs, including Microsoft (NASDAQ: MSFT).
Other AI startups stand to gain since Nvidia needs to catch up with the rapidly increasing demand for chips. Additionally, AMD will profit this year from the anticipated increase in the PC market.
The business increased the MI300 AI processor's full-year projection from $2 billion to $3.5 billion. Stock market prediction indicate that management is optimistic about this year's potential for increased processor revenue.
The market is rewarding Palantir Technologies (NYSE: PLTR) after it beat analyst expectations and reported its first profit. The company has shown significant progress in acquiring commercial clients and balancing the portfolio with the right amount of government and commercial clients.
That has helped with high conversions, and the company bagged 103 new deals in the recent quarter. Fundamentally, the company has a very strong balance sheet. Its revenue in the fourth quarter increased 20% year over year, and commercial revenue was up 32% YOY. It is aiming for 40% growth in commercial revenue this year.
It has been moving sideways and trading between $14 and $26 over the past six months. However, as per stock market predictions, there is an opportunity for upside. The profit could dramatically expand from here, and AI can take Palantir to new highs. It is one of the best AI stocks to own.
Nvidia (NASDAQ: NVDA) is one of the top AI stocks you can buy. It currently trades at roughly $625, with a $1,100 target price. Although that is less than twice as much, it did begin the year at $481.68.
In 2023, Nvidia proved to investors that even optimistic analysts underestimated the company's potential. Nvidia produced outstanding profit beats during the entire year of 2023. According to its admission, Nvidia benefits from having the biggest and most capable supply chain in the AI sector. Nevertheless, despite their advantages, it still needs help meeting demand for its AI chips. Its products now have extraordinarily high prices, and that advantageous business mix will probably last, given that its H200 chips are expected to be released this year. NVDA stock values are expected to double this year.
Workplace productivity is going to undergo a significant transformation in the future due to artificial intelligence. Software from UiPath (NYSE: PATH) assists businesses in streamlining tedious tasks. RPA technology, for instance, shortens the time needed to complete repetitive legal paperwork.
The company is incredibly well-regarded because, as demand for its technology increases, its fundamentals are getting better. Third-quarter revenues reached $326 million, up 24% from the previous period. Sales are anticipated to rise to almost $386 million during the fourth quarter.
In the future, generative AI will probably be more and more important to UiPath's expansion.
SoundHound AI (NASDAQ: SOUN) is a stock worth considering for conversational AI.
The term "conversational AI" describes voice recognition technologies widely used in various sectors, including banking, fast food, and autos. Numerous companies in such industries, such as Stellantis (NYSE: STLA), have partnered with the corporation. The fast food business also uses its technologies in conjunction with numerous smaller yet well-known brands.
With a low target price of $3.60, shares are trading at $1.75. Given that those costs can go as high as $5, SoundHound AI has a lot of promise.
Opening a brokerage account is one of the first steps toward investing in AI stocks. It allows an investor to deposit funds in a brokerage firm and buy, sell, and hold various investment securities. You can decide what kind of AI stock exposure you want from a brokerage account. Individual AI stocks can offer higher returns but require taking a lot of risk, upfront expenses, and extensive research work.
Another way to invest in the best AI stocks for 2024 is via pooled exchange-traded funds that focus on AI.
Exchange-traded funds, which invest in various businesses engaged in the development and application of AI, are another way for investors to gain exposure to AI stocks. ETFs track several AI stock indexes, including the Nasdaq CTA Artificial Intelligence & Robotics Index and the Indxx Global Robotics & Artificial Intelligence Thematic Index.
By searching for "artificial intelligence," "machine learning," or "AI," you can also locate AI ETFs via an ETF screener. However, be sure to do extensive research on any ETF you discover in this manner.
Certain exchange-traded funds (ETFs) with the term "AI" in their names make investments in businesses related to artificial intelligence. Conversely, other ETFs are diversified and do not necessarily invest in AI stocks but rather use AI-powered trading.
Investors should use caution when purchasing particular equities or ETFs with a narrow focus. Targeted investments can be riskier than broad investments like S&P 500 index funds, which provide about 10% long-term average annual return (before inflation). Donating no more than 10% of your total portfolio to specific stocks is one rule that can assist in reducing that additional risk.
However, analysts' stock market predictions argue that AI stocks are something to consider if you have enough money to purchase individual equities. If they can withstand the volatility of individual stocks, individual investors considering individual stocks in their 401(k)s might consider investing in AI-related companies, as it always makes sense to diversify their investment portfolio.
The possible applications of AI in 2024 are enormous and fascinating. The ongoing development of driverless cars using developments in deep learning, sensor technologies, and computer vision will be one area of emphasis. This will get us closer to when more self-driving vehicles are seen on the road. Significant advancements in conversational AI and natural language processing will also be made, enabling smooth interactions between people and AI-powered virtual assistants.
AI has enormous potential to spur innovation and transform industries by 2024.
