Stocks to buy

Should investors use AI stock picks to inform their decisions? Search engines have been using artificial intelligence for some time to offer up results to a query. But generative AI takes it one step further by not just referring you to sources, but crafting its own recommendations based on those sources.  

So should I be concerned that the Bing bot picked a slew of tech stocks when we asked it about companies that will dominate their industries? Maybe, but that’s a story for another day. At the moment though, Bing did come up with some solid picks. 

As you’ll see in the descriptions below, what AI will be and what it is today are different things. So you’ll still want to do your own due diligence. But here are three of the AI stock picks with a little of my own human “color” to add some additional information.  

Apple (AAPL) 

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What Bing had to say: “The tech titan is known for its iconic products, such as the iPhone, iPad, Mac and Apple Watch. The company could dominate its industry in 2023 with its loyal customer base, premium brand, innovation and services.” 

I’ll start where Bing left off. Because when you’re going to talk about Apple (NASDAQ:AAPL), you have to look at the growth in the company’s Services sector. This includes Apple TV and Apple Music. That division accounted for a record $20.8 billion of revenue in the company’s first quarter 2023 earnings report.  

This doesn’t mean that the company is going to stop being dominant with its iconic products. But there may still be pressure on those sales in 2023. However, the company is making a pivot to move some of its production to India which, to my mind, is not getting enough attention.  

And don’t forget that Apple is not a big player in AI … yet. But the company is doing what it always does. That means it’s taking a measure twice, cut once approach. That has served the company well in the past and is likely to do so in the future.  

I’m writing this the day that Apple reports quarterly earnings. That may add volatility to the stock in the short term. But as a long-term investment in disruptive innovation, Apple is a solid choice as one of the AI stock recommendations, and a good one for humans as well.  

Microsoft (MSFT)

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What Bing had to say: Microsoft is a leader in the cloud computing space. AI has been instrumental in helping Microsoft develop and deploy its cloud services. For example, AI has enabled Microsoft to analyze customer data and optimize its services for maximum efficiency. AI has also been used to develop new products and services that can help businesses stay competitive.” 

Next on this list of AI stock picks is Microsoft (NASDAQ:MSFT). Bing should know. But in this case, it’s a solid choice. The company is making a $10 billion investment into OpenAI, the company that created ChatGPT. This will allow Microsoft to take a giant leap in AI.  

One area that is already showing up concerns Bing, the company’s search engine that was used for this article. Heading into 2022, Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) had 70% of the search market. But as Tom Taulli noted for InvestorPlace, that could be changing. Since the company added generative AI into the search engine, the company has gained more than 100 million daily active users. And the company also believes that it will generate approximately $2 billion in revenue for every 1% gain it makes in market share.  

MSFT stock is up 27% in 2023 and has jumped 10% since the company’s earnings report in April. You don’t need to rely on AI stock analysis to believe that the stock is a good pick as a long-term investment.  

Amazon (AMZN) 

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What Bing had to say: “The e-commerce behemoth is also a leader in cloud computing, online advertising, streaming media and artificial intelligence. The company could dominate its industry in 2023 with its diversified revenue streams, competitive advantages and growth opportunities.” 

Amazon (NASDAQ:AMZN) had a dubious distinction as one of the biggest underachievers in 2022. AMZN stock was down 49% for the year. That was disappointing even during a year when the tech sector was a wreck.  

But there’s a pattern in the stock market in which a stock that is a laggard one year often becomes an outperformer the following year. And that could be repeating itself with Amazon. The stock is up 23% for the year.  

The company reported earnings in April and some investors were spooked by slower growth in the company’s cloud business. However, growth is growth, and the company did say that it is rapidly incorporating – you guessed it – artificial intelligence into its Amazon Web Services (AWS) business.  

Amazon is also reporting that one of its recent initiatives, Amazon Pharmacy, is “off to a good start” and “continuing to grow.” If that continues, it could be one of the underappreciated stories of 2023.  

And as inflation remains sticky, that will ultimately be bullish for the company’s e-commerce business which still is a good way for consumers to stretch their dollars.  

On the date of publication, Chris Markoch had a LONG position in AAPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. 

Chris Markoch is a freelance financial copywriter who has been covering the market for over five years. He has been writing for InvestorPlace since 2019.