How to invest in AI stocks in 2023

With artificial intelligence rapidly transforming various industries and our daily lives, it’s no wonder investors are eager to capitalize on the potential of AI technology. If you’re wondering how to invest in AI stocks in 2023, look no further. In this article, we will explore potential stocks to invest in by examining three categories: tech giants, semiconductors, and AI integration in traditional industries.

Tech giants as AI platforms

Microsoft (MSFT) is currently poised to expand into new lines of business thanks to its close ties to OpenAI. Microsoft has always led the way providing tools developers love, and AI appears to be the next decade-long trend in technology. Using ChatGPT technology, Microsoft could possibly even create a service that rivals Google Search. However, the economics remain unclear. Some reports indicate that a ChatGPT query costs significantly more to serve than a Google Search query.

Alphabet (GOOGL) claims to have superior AI technology, but they have been vague about how it would be commercialized. Many of their developers have been frustrated with the lack of recent innovations. Now that Google is facing existential threats from new technology, perhaps a renewed mission will motivate a new generation of products. They recently announced new hardware specialized for AI applications.

Amazon (AMZN) may benefit significantly by providing middleware and intermediary software services to AI developers. AWS already provides SageMaker, Rekognition, and Lex for customers to use with their own training data. Even if developers prefer to build their own models, AWS can provide general cloud-based computation and data infrastructure at the scale needed for AI applications.

Meta (META) provides an AI development package called PyTorch, which has been overtaking TensorFlow as the preferred option. Recently Meta announced a pivot from a focus on metaverse technologies to AI.  

Apple (AAPL) may be an underrated AI play. The Apple Silicon series of chips is now optimized for executing Machine Learning models. The applications remain modest, like recognizing a face in a camera app, but Apple clearly isn’t ignoring this trend. They are releasing developer tools, such as CreateML, that reflect Apple‘s focus on simple usability.

Semiconductors and hardware

NVIDIA (NVDA) is a leading supplier of GPU chips, which are used to perform the calculations needed to train AI models. They have long understood the profit potential for AI technology and are a dedicated specialist. In addition to hardware, NVIDIA provides software tools like CUDA, cuDNN, and TensorRT, which facilitate development and deployment. However, as of the time of writing, they are very highly valued by the market and might not be a timely investment. 

Intel (INTC) and AMD (AMD) both provide chips that are specialized for AI applications. While they have lagged NVIDIA in popularity, these companies may recapture market share going forward. As of time of writing, they also appear to be valued more sensibly than NVDA.

Taiwan Semiconductor (TSM) manufactures a wide variety of chips including those designed by NVIDIA, AMD, and Apple. Just like selling picks and shovels during a gold rush, TSM stands to benefit from AI enthusiasm in general.

Applying AI to existing industries

AI integration in traditional industries involves applying advanced algorithms and machine learning techniques to improve existing processes, products, and services. This approach can lead to enhanced efficiency, cost savings, and better decision-making across a wide range of sectors such as healthcare, finance, and manufacturing.

  • Aptiv PLC (APTV) – Develops AI-powered advanced driver assistance systems (ADAS) and autonomous driving solutions.
  • Chegg (CHGG) – Provides online tutoring, textbook rental, and study resources, utilizing AI and ML for personalized learning.
  • CrowdStrike (CRWD) – Develops AI-powered cybersecurity solutions for threat detection and response.
  • Deere & Company (DE) – Develops AI and ML-powered precision agriculture technologies, including autonomous tractors and drones.
  • Honeywell (HON) – Offers AI-based solutions for process automation, predictive maintenance, and industrial IoT.
  • iRobot (IRBT) – Develops AI-driven consumer robots like the Roomba.
  • Rockwell Automation (ROK) – Provides AI-driven automation solutions for industrial applications and manufacturing.
  • Shopify (SHOP) – Offers an e-commerce platform with AI and ML features for personalized marketing, customer insights, and inventory management.
  • Square (SQ) – Offers AI and ML-driven payment and financial services, including risk management and fraud detection.
  • Upstart (UPST) – Provides AI-driven lending platform that utilizes ML algorithms for credit risk assessment.

Conclusion: Borad opportunities

As the AI revolution unfolds, 2023 is a banner year for investing in these technology. Clearly there is a wide variety of investment opportunities available for those looking to tap into this rapidly evolving field. As AI continues to reshape industries and revolutionize our daily lives, the future appears to be exceptionally prosperous for those who recognize and seize these opportunities. If you are interested in this kind of investing, we can construct a specialized portfolio of AI stocks.

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