There was a time when the internet was new to us and we had no idea how important it would become in our lives. The same is happening with artificial intelligence right now. It is slowly taking shape, and while we may not know how it will change our lives, it could become an integral part of every business in the industry. According to a report by Fortune Business Insights, the size of the artificial intelligence market is projected to hit $2,025.12 billion by the end of 2030, at a compound annual growth rate of 21%. This means that investors should start looking for the top AI stocks to buy now.
Artificial intelligence is changing the way we live and it is all over the place. It has impacted every industry and the AI boom has led to a surge in market valuations of several tech companies. AI is here to stay and the sooner we accept this, the better. Smart investors have already started placing their bets on the top AI stocks. Besides the obvious upside they get whenever a tech company reports solid numbers, AI stocks do have a long way to go. With that in mind, let’s take a look at the three AI stocks to buy now.
Adobe (ADBE)
A well-known name in the industry, Adobe (NASDAQ:ADBE) is a document management giant which is making a solid comeback after showing subdued performance in the past. The company enjoyed its best days during the pandemic, but its growth slowed in late 2022. ADBE stock is one of the hot AI stocks as it is now making a comeback and is exchanging for $479 today, up 42% year to date and 25% in the year. Though the stock is down about 30% from all-time highs, it is moving in the upward direction and it could get a boost from AI.
The company has introduced a new suite of AI-powered tools known as Firefly which can help increase revenue growth. This tool will help users to produce top-quality images through text prompts. It will be integrated into its popular Adobe Photoshop software so that users can make the most of the new AI features. Firefly already created 70 million images in the first month itself. Adobe has cutting-edge technology that can drive growth for the company. It is a client of Nvidia (NASDAQ:NVDA) and they have a partnership to develop a new generation of AI models that will focus on the creator economy.
In the recent quarter, it reported a revenue of $4.8 billion, a 13% year-over-year increase, and the net income was flat at $1.3 billion. Adobe has invested in AI and it could help enhance its customer base while also helping the company increase client retention rates. This will drive sales and profits for the company. It might take time to deliver but it has a strong record, and if you believe in the future of AI, ADBE stock could generate significant returns in the near future. It is one of the top AI stocks to buy now.
Microsoft (MSFT)
There are several reasons to be bullish about Microsoft (NASDAQ:MSFT). This tech dinosaur leaves no stone unturned when it comes to innovation. It is already taking giant strides in AI, and it has invested $13 billion in OpenAI. The company has integrated it in its applications and Bing Search engine. Even Microsoft’s AI-powered program Microsoft Teams has achieved tremendous success throughout the years, and it is used by thousands of businesses globally. Its cloud computing platform, Azure, is driving huge revenue for the company and will continue to do so in the coming years.
Microsoft also has a massive gaming division and I believe it will integrate the best of AI capabilities to enhance the gamers’ experience. One big reason to invest in Microsoft is its diversified business. It has a personal computing division, gaming, cloud computing, and several other applications that continue to generate revenue, no matter the market condition. That said, Microsoft is also a dividend stock. The company has a dividend yield of 0.81% and a quarterly dividend payout of $0.68. MSFT stock is exchanging hands for $328 today and is up 37% year to date.
It has generated more than 230% results for investors in the past five years. A recent court filing by Microsoft showed that CEO Satya Nadella has a goal of generating a revenue of $500 billion by 2030, which is double the current size. In 2022, the company generated a revenue of $198 billion, and while the goal of $500 billion may look ambitious, looking at the company’s history, it is also achievable. The company aims to achieve 10% annual revenue growth and also deliver in excess of 10% returns to the shareholders during this period.
Amazon (AMZN)
E-commerce giant Amazon (NASDAQ:AMZN) had some of its best days during the pandemic. This is when AMZN stock hit new all-time highs. Today, the stock is trading at $127 and is up 48% year to date. Since the start of 2023, the stock has been on an upswing and this rally is set to continue in the near term. While a lot of investors are worried about a looming recession and its impact on the stock, it helps to keep in mind that Amazon is so much more than just an e-commerce company. It is also one of the top AI stocks to add to your portfolio before it skyrockets. Amazon’s cloud unit is considering using Advanced Micro Devices (NASDAQ:AMD) chips and this super chip deal could impact several AI companies in the industry.
The company owns the world’s largest cloud platform Amazon Web Services. It has been using AI for years now and has integrated it into different applications that enhance consumer experience. The company uses AI for inventory management, product recommendations, and offers the fastest and cheapest modes of delivery. It recently launched generative AI capabilities for Amazon Web Services, and there is a lot more to come.
Amazon is not the one to sit out and watch while the world innovates. Instead, it is the one to jump right in and adopt the latest technology. Whether you look at it as an e-commerce stock, AI stock, or tech stock, Amazon could be a solid addition to your portfolio and generate impressive returns throughout the years.
On the date of publication, Vandita Jadeja did not hold (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.
