Stocks to buy

Investors needn’t worry that they’ve missed the boat when it comes to artificial intelligence (AI), as there are several AI stocks on sale still.

Shares of some companies heavily involved in AI continue to trade at massive discounts to their intrinsic value. In fact, some of the biggest names in AI are only now seeing their stocks tentatively recover following steep sell-offs in 2022 amid what became known as the “tech wreck.”

This presents a big opportunity for investors interested in companies that are pushing AI technologies further to create a world most of us could only imagine a few years ago. However, with the global market for artificial intelligence forecast to grow 20-fold to reach $2 trillion by 2030, investors who don’t act soon might regret it later.

Here are three of the best AI stocks to buy now.

Alphabet (GOOG, GOOGL)

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Google parent company Alphabet (NASDAQ:GOOG , GOOGL) remains a world leader in the development of artificial intelligence models. While the company may have fallen behind ChatGPT creator OpenAI in terms of releasing chatbots and other AI products, Alphabet is moving double time to catch up to its main competitor.

The company just announced that AI will be the central theme at its developer conference this year. Alphabet plans to announce several new generative AI products, including a large language model (LLM) called PaLM 2 that can compete with ChatGPT and its successor GPT-4. PaLM 2 will reportedly include more than 100 languages and can perform a range of tasks from coding and math to creative writing. Alphabet is also widely viewed as the leader in AI research through its DeepMind laboratory.

Although Alphabet’s share price has gained 28% over the past six months, its recovery has badly trailed that of other tech firms involved in AI, such as Nvidia (NASDAQ:NVDA), whose share price has risen 110% in the same time period. Also, Alphabet’s price-to-earnings (P/E) ratio is less than 24, well below its five-year average, offering a truly massive discount right now.

Alibaba (BABA)

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Shares of Chinese technology behemoth Alibaba (NYSE:BABA) continue to struggle. Year to date, BABA stock is down 6%, while shares remain 74% below their all-time high of nearly $320, reached in October 2020.

Investors looking for a buy-the-dip opportunity in an AI player should consider snapping up Alibaba’s stock while it remains deeply discounted. The company is heavily involved in most areas of tech, from e-commerce and electronic payments to online search and artificial intelligence.

The diversity and scope of its business make Alibaba arguably China’s leading technology company. Alibaba is now turning its considerable resources to AI in hopes of competing against Alphabet in the U.S., as well as domestic Chinese tech competitors such as Baidu (NASDAQ:BIDU).

To that end, Alibaba has announced plans to launch its own AI chatbot called Tongyi Qianwen. The company says the AI model will eventually be integrated across its various businesses, helping to deepen the customer experience.

Intel (INTC)

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For an AI stock that is really trading at a massive discount right now, consider chipmaker Intel (NASDAQ:INTC). The company is spending billions of dollars developing foundries in the U.S. capable of making advanced microchips and semiconductors that will power the future of technology, including advances in artificial intelligence.

Intel has said that its goal is to eventually rival Taiwan Semiconductor Manufacturing Company (NYSE:TSM), which currently makes more than half of all the world’s semiconductors.

Intel’s ambitions are to be applauded. But they have so far done nothing to help the company’s finances or stock. At the end of April, Intel reported the biggest quarterly loss in its 55-year history. Earnings per share (EPS) plunged 133% in Q1 from a year earlier, while revenue declined nearly 36% year over year.

The earnings print was the latest blow to INTC stock, which is down 30% over the past 12 months and 45% over the past five years. However, long-term investors who buy now might be rewarded when Intel’s fortunes turn.

On the date of publication, Joel Baglole held long positions in GOOGL and NVDA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.