Primarily, artificial intelligence represents a productivity force multiplier, meaning that retiring rich with AI stocks is hardly a pipedream. To be sure, all investments carry significant risks. In addition, advanced digitalization may run into the headwind of regulatory challenges. Nevertheless, few sectors enjoy as broad of an addressable market as AI and machine learning.
According to Grand View Research, the global AI market sized reached a valuation of $136.55 billion last year. Experts project that the segment will expand at a compound annual growth rate (CAGR) of 37.3% from 2023 to 2030. At the culmination of the forecast period, the sector could see revenue of $1.81 trillion. That’s reason enough to consider the best AI stocks for retirement.
Further, ChatGPT offered a multitude of reasons why AI stocks for a long-term retirement portfolio is relevant. In particular, AI delivers rapid technological advancements such as deep learning and natural language processing. As well, advanced digitalization offers a wide range of applications, from autonomous transportation to medical diagnostics to customer service. Given that AI is a burgeoning field, these entities don’t typically follow a traditional retirement protocol (i.e. robust dividends). If you’re okay with that, below are AI stocks for retirement wealth (per ChatGPT).
| NVDA | Nvidia | $429.9A7 |
| GOOG GOOGL | Alphabet | $124.38 |
| IBM | IBM. | $137.20 |
| MSFT | Microsoft | $337.34 |
| AMZN | Amazon | $126.42 |
| BIDU | Baidu | $147.21 |
| TCEHY | Tencent Holdings | $45.13 |
Nvidia (NVDA)
A curious idea that ChatGPT proposed for retiring rich with AI stocks, Nvidia (NASDAQ:NVDA) is a leading technology firm known for its graphics processing units (GPUs). Now, the thing about GPUs is that they undergird myriad innovations in AI and ML, as I mentioned last month. It’s possible that GPUs can take precedence over central processing units (CPUs) when it comes to powering AI protocols.
On that note, NVDA may attract attention to the best AI stocks for retirement. On the other hand, it’s also a tricky proposition. At the time of the aforementioned article, NVDA traded at over 200 times trailing earnings. And it was also priced at nearly 53 times the projected earnings. With that kind of premium, Wall Street maven Cathie Wood trimmed her exposure to NVDA.
Nevertheless, NVDA has been absolutely flying. In the trailing one-month period, shares have popped up nearly 42%. Also, data from TipRanks shows that NVDA carries a strong buy consensus view among Wall Street analysts. Their average price target stands at $449.92, which might be breached soon. If you like banking on momentum, NVDA could be one of the AI stocks for a long-term retirement portfolio.
Alphabet (GOOG, GOOGL)
Although Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) lately seems to generate controversy for its ideological stances and massive social influence, it’s easy to forget that it’s one of the best enterprises for retiring rich with AI stocks. Sure, it’s not a traditional retirement play. At the moment, Alphabet offers no dividends. Based on its latest statements on the matter, management sees no plans for providing passive income.
You can easily make an argument that Alphabet should. Basically, as Barron’s op-ed stated, enterprises such as Alphabet are mature, profitable businesses. As such, they carry the typical attributes of companies that provide dividends. And who knows? Down the line, management could change its mind. Thus, it’s well worth holding onto for AI stocks to buy for retirement.
Even if it doesn’t, Alphabet owns the massive, lucrative Google ecosystem. With the company making inroads into various autonomy-related initiatives, GOOG will be relevant for decades to come. Therefore, even as a consistent capital gains play, I believe it makes sense as one of the AI stocks for retirement wealth.
IBM (IBM)
Among the entities that ChatGPT identified for retiring rich with AI stocks, IBM (NYSE:IBM) makes the most sense from a traditional retirement framework. A massive but still relevant legacy tech stalwart, “Big Blue” carries several exciting AI initiatives in its pipeline. At the same time, it also offers robust passive income. As a balanced opportunity, you probably can’t go wrong here.
On the intelligent digitalization front, Big Blue enters the arena with IBM Watson. A powerful platform developed by top engineers and data scientists, Watson builds trust and scales AI protocols across various cloud environments. In addition, IBM Watson Assistant provides an adaptable AI chatbot that’s built on ML, deep learning, and natural language processing (NLP) innovations.
While it could use some shoring up of its financials, IBM offers a compelling discount. Currently, the market prices shares at a forward multiple of 14.51. As a discount to projected earnings, IBM ranks better than 77.69% of the competition. Combined with the company’s forward yield of 4.83%, IBM ranks among the best AI stocks for retirement.
Microsoft (MSFT)
A no-brainer for any tech-related context, Microsoft (NASDAQ:MSFT) presents a very suitable case for retiring rich with AI stocks. Most conspicuously, Microsoft recently entered a partnership with OpenAI, the creator of ChatGPT. With the chatbot integrated with Microsoft’s Bing search engine, the software (and hardware) giant enjoys a fresh relevancy surge.
To be fair, in the global search engine arena, it’s difficult to see how anyone will usurp Google. In my opinion, Google will always be relevant as a human-powered research tool. I don’t care how advanced AI gets; it will never replace the complexity of the human brain. That said, Microsoft’s incorporation of ChatGPT isn’t so much about taking over Google but invigorating fresh utility for Bing.
Even if you’re not seeking AI stocks for a long-term retirement portfolio, Microsoft owns the desktop operating system market. With more people familiar with Windows-based PCs, this dominance probably won’t fade out anytime soon despite recent challenges. Therefore, MSFT remains in my opinion a no-brainer for the long haul.
Amazon (AMZN)
Best known for its e-commerce pioneering business, Amazon (NASDAQ:AMZN) is a legitimate contender for retiring rich with AI stocks. Through its AWS cloud network, Amazon offers a comprehensive set of AI and ML services, infrastructure, and implementation resources.
Fundamentally, Amazon enables its enterprise-level clients to reinvent customer experiences with generative AI protocols. As well, the tech giant enables companies to tailor ML processes to meet specific business needs. Finally, when clients sign up with Amazon, they’re interfacing with a proven leader. At the moment, AWS features more than 100,000 customers who benefit from 20-plus years of data science acumen.
As with most other AI stocks to buy for retirement mentioned here, Amazon isn’t a traditional play for retirees, mainly because it doesn’t yet offer passive income. Still, its three-year revenue growth rate (on a per-share basis) clocks in at 21.9%, beating out 83.59% of the competition. Even after all these years, it’s still chugging along at a fast clip, thus making it a valuable asset.
Baidu (BIDU)
Often given the tag “Google of China,” Baidu (NASDAQ:BIDU) is a prominent tech company heavily invested in AI research. Per ChatGPT, Baidu focuses on autonomous driving, NLP, and other AI-driven applications. Since the beginning of this year, BIDU gained nearly 20% of its equity value. Still, from a relative standpoint, it offers a tempting discount. In the past 365 days, BIDU gained only a bit over 1% in the charts.
To be completely upfront, investors who bid up BIDU must be geopolitically agnostic. I’m not going to get into the details but a recent controversy over stolen intellectual property implicates Baidu. Certainly, for at least some investors, BIDU will be a no-no just for that. You’ll have to make the decision for yourself.
On the financial front, Baidu’s core strengths lie in its consistent profitability. Its trailing-year net margin comes in at 11.34%, above 72.11% of sector rivals. Also, its return on equity (ROE) pings at 6.4%, above 62.13%. Notably, its three-year free cash flow growth rate is 23.9%, beating out 68.64% of companies listed in the interactive media industry.
Tencent (TCEHY)
A multinational conglomerate with a strong presence in the broader tech ecosystem, Tencent (OTCMKTS:TCEHY) has made significant investments in AI, per ChatGPT. Specifically, it focuses on facial recognition, NLP protocols, and robotics. Since the Jan. opener, TCEHY slipped more than 1%. However, it has gained momentum recently, moving up over 2% in the trailing five sessions.
Fundamentally, TCEHY offers a two-pronged approach for retiring rich with AI stocks. First, the Chinese tech market veritably skyrocketed over the past several years. All indications from the political grapevine suggest that the Chinese government will continue to undergird tech innovations. Second, TCEHY could be one of the AI stocks for retirement wealth thanks to the lucrativeness of the AI ecosystem. As stated earlier, Grand View Research estimates that the global AI market could expand at a CAGR of 37.3%. If so, you’ll probably want to have some exposure to TCEHY.
Lastly, Tencent offers a balance of growth and profitability. Its three-year revenue growth rate clocks in at 13.5%, beating out 62.79% of its peers. And its net margin soars to 33.19%, above 92%.
On the date of publication, Josh Enomoto 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.
