AI stocks present irresistible opportunities for forward-looking investors as the digital age progresses rapidly. The resilience and strength displayed by these equities have boosted the broader tech market. AI’s potential to drive innovation, improve customer experiences, and boost productivity makes it a sought-after tool for businesses.
With the increasing demand for advanced AI products like ChatGPT, the future seems dominated by AI’s influence, providing high-return opportunities for investors in the AI stock market. The potential in AI stocks is simply too compelling to ignore.
Here are three of my AI stock recommendations that I think are set to surge higher.
Nvidia’s (NASDAQ:NVDA) strategic focus on AI and cloud technology has propelled its stock value significantly in 2023. The company’s advancements in data processing with GPUs and the acquisition of Mellanox establish it as a comprehensive AI solution provider, solidifying its position in the AI industry.
Nvidia’s adaptable strategies focused on AI applications and data center growth position the company to leverage the surge in GPU demand. While gaming revenues may have dropped, Nvidia’s emphasis on data centers and significant investment in Recursion demonstrate its commitment to innovative AI ventures. This sets the stage for continued expansion and success in the AI landscape.
Additionally, Nvidia’s CEO, Jensen Huang, believes we are in the early stages of accelerated computing and generative AI adoption, with a trillion dollars’ worth of data center infrastructure transitioning to accelerated computing. Surging demand for Nvidia’s products, driven by companies joining the AI race, has prompted the firm to increase its supply. This strong demand is expected to boost Nvidia’s revenue in the future.
Microsoft (NASDAQ:MSFT) shares hit all-time highs at $350, then retreated to $330. Despite the decline, I believe MSFT stock is undervalued and should be valued at $350 per share. The price-to-sales ratio supports this view, considering the significant increase in sales projected for this year compared to 2021. This presents an opportunity for investors.
Microsoft’s CEO, Satya Nadella, aims to accelerate progress in chemistry and materials science using quantum elements on Microsoft Azure. The company is developing a quantum supercomputer, adding to the excitement around its business model. In Q4 Fiscal 2023, Microsoft’s revenue increased by 8% year-over-year, and net income rose by 20% year-over-year. Microsoft Cloud, contributing 53.9% of the total revenue, can gain further momentum with the growth of quantum computing and its impact on Microsoft Azure’s value proposition.
Alphabet (GOOG, GOOGL)
Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) mainly relies on its ad network, which generated $56.3 billion in Q2 and accounted for 80.8% of its revenue. While advertising’s recovery promises more growth, Google is diversifying into quantum computing, with Quantum AI working on groundbreaking technologies. Google’s quantum computer is 47 times faster than the world’s fastest supercomputer.
Moreover, Alphabet presents a compelling investment opportunity with strong Q2 earnings beating expectations and indicating the potential for rising share prices. With revenues of $74.6 billion and robust income growth of 14.79%, the company is on a positive trajectory, expecting over $300 billion in sales this year. Despite a slowdown in growth rates, the overall position remains strong, particularly relative to 2021 peak prices.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.