5 Safe AI-Stocks Every Investor Should Know About In 2023

Gain Exposure To AI In Prudent Manner

In today’s rapidly evolving technological landscape, artificial intelligence (AI) has emerged as a game-changing force. Companies at the forefront of AI technology are revolutionizing industries, driving innovation, and capturing opportunities for growth.

Photo by Nguyen Dang Hoang Nhu on Unsplash

Here are five AI-related stocks along with their key strengths and weaknesses:

Alphabet Inc. (GOOGL)

Alphabet Inc. is the parent company of Google, one of the world’s largest and most influential technology companies. Google is known for its search engine, but it has also established itself as a leader in AI technology. With products like Google Assistant, Google Cloud AI, and TensorFlow, Google has made significant advancements in natural language processing, computer vision, and machine learning. Alphabet’s key strength lies in its strong brand recognition, extensive resources for research and development, and diverse revenue streams. However, the company faces challenges related to data privacy and antitrust issues while competing fiercely with other tech giants in the AI space.

Key Strengths

• Google, a subsidiary of Alphabet, is a leader in AI technology with products like Google Assistant, Google Cloud AI, and TensorFlow.
• Strong brand recognition and extensive resources for research and development.
• Diverse revenue streams from advertising, cloud services, and other ventures.

Key Weaknesses

• Increasing regulatory scrutiny on data privacy and antitrust issues.
• Reliance on advertising revenue, which may be susceptible to economic downturns.
• Intense competition in the AI space from other tech giants.

NVIDIA Corporation (NVDA)

NVIDIA Corporation is a prominent semiconductor company specializing in GPUs (Graphics Processing Units) that are integral to AI applications. Its GPUs are widely used for training and inference in deep learning models, making NVIDIA a vital player in the AI hardware market. The company has a strong presence in various AI-related industries, including autonomous vehicles, data centers, and gaming. NVIDIA’s key strengths lie in its robust ecosystem, partnerships, and support for AI developers and researchers. However, it faces potential weaknesses related to the cyclical nature of the semiconductor industry, increasing competition in the AI hardware space, and vulnerability to changes in gaming-related demand.

Key Strengths

• A leading provider of GPUs (Graphics Processing Units) used in AI applications, making it an essential player in the AI hardware market.
• Strong presence in various AI-related industries, including autonomous vehicles, data centers, and gaming.
• Robust ecosystem and partnerships, supporting AI developers and researchers.

Key Weaknesses

• Reliance on the cyclical nature of the semiconductor industry, which can lead to fluctuations in revenue.
• Increasing competition from other semiconductor companies entering the AI hardware space.
• Vulnerability to changes in demand for gaming-related products.

International Business Machines Corporation (IBM)

International Business Machines Corporation, commonly known as IBM, has a long-standing reputation and extensive experience in providing enterprise-level AI solutions. IBM’s Watson AI platform is renowned for its capabilities in natural language processing, machine learning, and data analytics. The company has a strong focus on AI ethics and responsible AI practices. However, IBM faces challenges in the highly competitive AI market from tech giants like Google and Microsoft. Additionally, IBM’s legacy businesses, such as hardware and services, have faced difficulties in adapting to the evolving AI landscape, potentially impacting its growth.

Key Strengths

• IBM’s Watson AI platform is renowned for its capabilities in natural language processing, machine learning, and data analytics.
• Long-standing reputation and extensive experience in providing enterprise-level AI solutions.
• Strong focus on AI ethics and responsible AI practices.

Key Weaknesses

• Stiff competition in the AI market from tech giants like Google and Microsoft.
• IBM’s legacy businesses, such as hardware and services, have faced challenges in adapting to the evolving AI landscape.
• Slower revenue growth compared to some competitors.

Amazon.com, Inc. (AMZN)

Amazon.com, Inc., the e-commerce giant, has made significant strides in AI-driven technology. Amazon’s voice assistant, Alexa, has gained widespread adoption, powering smart speakers and various smart home devices. The company has leveraged its strong e-commerce presence and vast customer data to develop AI applications. Amazon Web Services (AWS) offers a comprehensive suite of AI services, including machine learning and natural language processing. While Amazon’s AI initiatives have been successful, the company faces regulatory concerns regarding data privacy and potential antitrust scrutiny. Additionally, its high reliance on the retail sector and increasing competition in the voice assistant and cloud services markets present challenges.

Key Strengths

• Amazon’s AI-driven voice assistant, Alexa, has gained widespread adoption, powering smart speakers and various smart home devices.
• Strong e-commerce presence and vast customer data, providing valuable insights for AI applications.
• Amazon Web Services (AWS) offers a comprehensive suite of AI services, including machine learning and natural language processing.

Key Weaknesses

• Regulatory concerns regarding data privacy and potential antitrust scrutiny.
• High reliance on the retail sector, which may be affected by economic downturns.
• Increasing competition from other tech companies in the voice assistant and cloud services markets.

Microsoft Corporation (MSFT)

Microsoft Corporation, a leading technology company, has made substantial investments in AI research and development. Its cloud computing platform, Azure, provides a range of AI services and tools, empowering developers to build AI applications. Microsoft has a strong presence in enterprise software and services, offering AI solutions across industries. However, intense competition in the AI space from other tech giants remains a challenge for Microsoft. The company’s diverse product portfolio, although advantageous in many ways, may also dilute the focus on AI-related initiatives. Furthermore, integrating AI capabilities seamlessly across its vast range of products and services presents additional hurdles for Microsoft.

Key Strengths

• Azure, Microsoft’s cloud computing platform, provides a range of AI services and tools, empowering developers to build AI applications.
• Strong presence in enterprise software and services, offering AI solutions across industries.
• Continued investment in AI research and development, with collaborations in academia and industry.
• Microsoft has an important stake in OpenAI

Key Weaknesses

• Intense competition from other tech giants in the AI space.
• Microsoft’s diverse product portfolio may dilute the focus on AI-related initiatives.
• Potential challenges in integrating AI capabilities across its vast range of products and services.

How To Find AI Gems Before Others Do

Investing in AI isn’t an easy tasks so here is a summary. Alphabet Inc. stands out with its AI advancements and diverse revenue streams, while NVIDIA Corporation’s GPUs play a pivotal role in AI hardware. IBM’s long-standing reputation and Watson AI platform position it as an enterprise-level AI provider. Amazon.com, Inc.’s Alexa and AWS offerings capitalize on its e-commerce dominance, and Microsoft Corporation’s Azure platform enables developers to leverage AI capabilities.

How to find the full list of AI stocks?

1. Visit StockViz (it is free) and head to the Benchmark tab
2. Select the “Global X Artificial Intelligence & Technology ETF”
3. Compare all artificial intelligence stocks against each other

It is important to keep in mind that this article is not intended as specific investment advice, but rather serves to educate investors about potential investment strategies and tools. As always, it is essential to conduct thorough research and analysis before making any investment decisions, and to consult with a professional financial advisor or broker if necessary.