3 Stocks Positioning Themselves for the Future of AI

Stocks to buy

What will the future of AI look like? While no one knows for certain, it’s clear that certain trends will mark the next iteration of growth for AI-focused stocks. It’s clear that humanoid robots will be a big part of the upcoming AI future and are certainly a trend to watch. 

Other firms continue to invest heavily in AI computational resources. Investors should understand that the boom in AI computer power is not over yet. Many of the largest firms have established dominant positions through early investments. However, there are many firms in the small to medium enterprise space that will direct billions upon billions of dollars into AI-focused stocks moving forward. 

Investors should also recognize that many of next big names remain focused on creating their own chips. The costs associated with relying on major chip manufacturers is high. It will continue to be a major factor investors should watch. Here are three AI-focused stocks for investors to keep an eye on.

Nvidia (NVDA) 

Nvidia (NASDAQ:NVDA) has established itself as the dominant player in all things artificial intelligence, spiking the price of its stock in the process. Investors could be forgiven for believing that Nvidia’s sole opportunity is in providing chips for data center applications. The truth is that NVDA’s AI opportunity is much bigger and the company continues to position itself for the future.

It’s clear that the next iteration of AI development will have a heavy focus on humanoid robots. Nvidia will be a big part of that conversation. The company announced its Project Groot foundational model for humanoid robots back in mid-March.

Further, the company has developed a new computing platform to advance the development of the project called Jetson Thor. Nvidia’s robots are expected to be able to understand and process natural language while also observing and emulating human movements and action in a safe manner.

The future of AI that most envisioned is getting that much nearer and Nvidia plans to be a leading force in that evolution.

Amazon (AMZN)

The future of AI will certainly  include Amazon (NASDAQ:AMZN) and its substantial cloud resources. Heavy investments in data centers required for artificial intelligence marked much of the first wave of AI.

It’s a process that is going to continue well into the future. Amazon is clearly a major force in that narrative. The company is the largest cloud provider and recently announced plans to invest $150 billion into data centers over the coming 10 years.

In other words, the upcoming future of AI will require much more infrastructure to handle the overall demand growth. Amazon intends to dominate the cloud space, especially as it relates to the infrastructure required to handle the AI boom.

The other thing to note about Amazon and the future of AI is how big firms invest in up-and-coming potential superstars. I’m referring to Anthropic. It’s one of the most notable up-and-coming AI-focused stocks. Amazon recently concluded its $4 billion investment into Anthropic. Investors should assume that today’s tech titans have every chance of controlling major AI upstarts through early investment. Amazon should certainly benefit from its connection to Anthropic moving forward.

Alphabet (GOOG, GOOGL)

It’s becoming increasingly clear that Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) wants to become self-reliant for chip production. That’s one of the biggest stories for the company and for major tech stocks moving forward.

Companies including Google and Meta Platforms (NASDAQ:META) are increasingly dedicated to the idea of bringing chip production in house. And why shouldn’t they? Chip prices are extraordinarily high. Google and Meta Platforms are not the only Silicon Valley giants undertaking that strategy. Each and every firm is. However, Google looks to be taking extraordinary efforts relative to its peers in that regard. 

The company recently expanded its in-house chip production efforts. Its new Axion chip is expected to be leveraged in everything from YouTube to data analysis to advertising. 

Google’s search engine dominance is directly attributable to chip investments. Whether Google succeeds this time around remains to the scene. However, the trend is clear, in-house chip production will continue to be a major driving force in AI success moving forward. The major tech firms that can best create bespoke chip solutions for their respective businesses benefit in multiple ways. Those chips should be more powerful and applicable to those companies while also potentially lowering costs associated with vendors such as Nvidia.

On the date of publication, Alex Sirois 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.

Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.

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