The search for the top AI stock is on. Companies involved in artificial intelligence are at the forefront of a rapidly growing industry. Indeed, these companies are revolutionizing many sectors, including healthcare, finance, transportation, and manufacturing.
Notably, since OpenAI introduced ChatGPT in late 2022, investors have taken on a renewed interest.
AI is one of the fastest-growing industries, and the demand for AI products and services is expected to increase significantly in the coming years. AI has the potential to disrupt traditional industries and create new markets and opportunities for businesses that adopt it early. Additionally, AI stocks can help diversify an investor’s portfolio, reducing their overall risk exposure. Thus, there’s plenty of potential reasons to invest in the sector.
Here are three of the best options in this space right now, in my view.
Microsoft (NASDAQ:MSFT) has invested heavily in research and development when it comes to artificial intelligence. The company’s cloud computing platform, Azure, offers a range of AI and machine learning tools, including cognitive services, Bot Service, and Azure Machine Learning. The early integration of AI technology across the company makes Microsoft a top player in the AI industry.
However, Microsoft has recently garnered plenty of headlines as the company added ChatGPT to its Bing search engine. Microsoft hopes that ChatGPT will bring new relevance to its search engine, weakening Google’s (NASDAQ:GOOG) dominance over search.
OpenAI, the company behind ChatGPT, is backed by Microsoft, who has poured billions into the project. Microsoft is hopeful that ChatGPT will be able to provide recent, relevant information when paired with Bing. ChatGPT alone is limited in that it allows for dated answers to prompts.
But there have also been strange reports about the search engine, including a bizarre conversation between Bing and a New York Times columnist. This technology is still in its beta form, but there’s plenty of potential – that much is clear.
Intuitive Surgical (ISRG)
Intuitive Surgical (NASDAQ:ISRG) is a medical technology company that has pioneered the development of robotic-assisted surgical systems. The da Vinci Surgical System uses AI algorithms to enhance surgical precision, accuracy, and safety. The system has been widely adopted by hospitals and surgical centers worldwide. That strong position suggests that as AI technology advances, Intuitive Surgical is well-positioned to maintain its leadership.
Intuitive Surgical is at the intersection of several big questions. Can its products, combined with advancing AI technology, improve the delivery and quality of care? Will AI lead to better patient outcomes?
Current evidence seems to suggest that the answer could be yes. The machine learning and AI in Intuitive Surgical’s products improve outcomes across various procedures. For example, robotic surgery to repair damaged bowel tissue between 2010 and 2019 resulted in lower mortality, reoperations, bleeding, and readmission rates than traditional surgery.
Raytheon (NYSE:RTX) is a well-known defense company investing in artificial intelligence and machine learning with a well-developed platform. One of its subsidiaries, Raytheon Intelligence & Space, offers a range of AI-powered solutions for defense and intelligence applications. It will face stiff competition among leading defense firms focused on automated target recognition, predictive maintenance, and autonomous systems. That said, I think Raytheon could come out ahead in this race.
Raytheon’s AI and machine learning programs span cybersecurity, space, weather, national security, and intelligence sectors. These programs assist in crunching data that informs action plans for key decision makers.
Additionally, Raytheon has been developing programs to leverage AI when human reaction speed is limited. For example, Raytheon has been developing systems that can identify and respond to surprise attacks on ships that would leave humans too little time to react.
Raytheon has also funded multiple partnerships with universities to develop AI and machine learning capabilities, among other efforts. Raytheon, like all significant defense companies, has been heavily involved with AI and machine learning efforts for a long time. Expect these defense firms, with their substantial budgets, to continue to be able to attract the best and the brightest talent in the industry. The military will continue to push the limits of technology to benefit national security, and AI will be no exception.
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.