CEO Jamie Dimon of JPMorgan Chase (NYSE:JPM), the world’s largest bank, recently said that artificial intelligence is not just hype or a stock market bubble.
“When we had the internet bubble the first time around, that was hype. This is not hype. It’s real,” Dimon said, referring to AI.
He also mentioned cybersecurity and healthcare research as two areas where AI could be extremely helpful to humanity.
Dimon, who said AI may invent cancer cures, is the latest influential voice to spell out both the use case for AI and that this is a legitimate and emerging technology that is likely to be with us forever. There are certain companies and stocks that are likely to benefit the most from the growth of AI.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) has become so associated with AI that it’s now being sued for copyright infringement. Three authors have launched a lawsuit against Nvidia claiming that the company used their copyrighted books without permission to train its NeMo AI platform. Brian Keene, Abdi Nazemian and Stewart O’Nan claim their books were among nearly 200,000 published works that helped train NeMo before it was shutdown last fall.
Lawsuits aside, Nvidia’s stock continue to soar amid high demands for its microchips and semiconductors that are used to power AI applications and platforms. The company’s Data Center business, which comprises its AI chip sales, increased 409% year-over-year to $18.40 billion in the fourth quarter of 2023. Demand shows no signs of cooling, and neither does NVDA stock, which is up 80% year to date.
Meta Platforms (META)
Speaking of Nvidia, Meta Platforms (NASDAQ:META) has announced plans to spend billions of dollars this year buying microchips from the company in order to power its AI applications. Meta CEO Mark Zuckerberg said the company will have 350,000 Nvidia H100 Graphics Processing Units and 600,000 H100 compute equivalent GPUs by the end of 2024.
Meta just announced that it is building a new AI model designed to power its entire video recommendation engine across all of its social media platforms. The company said that the new AI model will be able to power both the company’s Reels short videos as well as longer videos found on Facebook and other social media sites.
The video AI project comes as Congress moves to potentially ban Chinese video streaming service TikTok, a move that could give Meta a boost. Meta’s stock is up 43% year to date.
Alphabet (GOOG, GOOGL)
Admittedly, Alphabet (NASDAQ:GOOG, NASDSAQ:GOOGL) has hit a rough patch with its AI products. The company recently pulled its AI picture generator after it produced inappropriate images. Alphabet said it plans to relaunch the picture generator after fixing its problems. This issue cropped up as Alphabet was being criticized for creating confusion by rebranding its main AI chatbot as “Gemini,” replacing the former name “Bard.”
These problems aside, GOOGL stock remains one of the best bets on the future of AI. The company is working overtime to cascade AI across its various products and services, from its Google Assistant to its Pixel smartphone. Alphabet is among the best positioned tech companies to monetize its AI products, and it continues to be a leader in the science behind the technology with its inhouse DeepMind laboratory.
GOOGL stock is flat on the year (up less than 1%) but has gained 54% in the last 12 months.
On the date of publication, Joel Baglole held long positions in NVDA and GOOGL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.