The AI invasion is upon us, making it a great time to consider the best AI stocks to buy. There are numerous players in the AI market, each wanting to get a piece of the pie.
Right now, it is extremely difficult to measure the true impact that artificial intelligence will have on the global economy. Some experts are forecasting tens of trillions of dollars contributed to global GDP over the next decade. This certainly makes for an exciting time ahead, given the long term market opportunities in generative AI.
Now, let’s discover the top three AI stocks to buy now!
Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) should need no introduction as it’s one of the best in-class AI stocks to buy in March. Generative AI tailwinds continue to fuel cloud growth, and this AI-powered copilot software is set to be a game changer.
Microsoft has become synonymous with AI, thanks to generative AI backed startup, OpenAI. The company’s release of ChatGPT has been the most prominent introduction to LLMs. The partnership between the two companies allows OpenAI to leverage Microsoft’s robust Azure cloud infrastructure to train these advanced models. It is already fueling Azure cloud growth, and the copilot software is getting ready to take off.
In Microsoft’s latest quarterly financial results, revenue in the intelligent cloud increased 20% YOY to $25.9 billion. Azure and other cloud services revenue grew 30%, and Microsoft continues to signal strong demand for its AI products. The company is just beginning to integrate AI across its entire tech stack and holds a lot of promise. With demand for generative AI set to power cloud growth in FY24, Microsoft remains one of the top AI stocks to buy now.
Amazon (AMZN)
Amazon (NASDAQ:AMZN) has recently had a massive turnaround in its business, and the future looks extremely bright. After employing cost-cutting measures in the back half of 2022, CEO Andy Jassy is leading the charge in the AI revolution.
Large cloud providers like Amazon will heavily benefit from the rapid scale and deployment of generative AI models. Cloud infrastructure is the backbone of artificial intelligence, and Amazon Web Services (AWS) is well positioned to benefit from the increased demand. Additionally, Amazon’s suite of generative AI products including Amazon Bedrock, Amazon Q, Code Whisper and AWS Tranium will make a significant dent in the market.
The company closed off a record year in FY23, after cutting costs and making key investments into generative AI. This resulted in Amazon seeing a record FCF of $36.8 billion. Additionally, the company has seen a turnaround in its e-commerce business shipping more than seven billion units. As the company continues to make strategic investments in AI and control costs, Amazon should definitely be kept on your radar in 2024.
Alphabet (GOOG, GOOGL)
Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is a sleeping giant and one of the best no-brainer AI stocks to buy and hold for the decade. The company has continued to see incredible cloud growth, and its Gemini AI model is a serious threat to ChatGPT 4.0.
Artificial intelligence is going to transform Alphabet’s core businesses, which all saw strong double-digit growth in the 2023 fiscal year. This includes Google Cloud, Google Search and YouTube. In Q4 2023, YouTube’s ad revenue increased 15% YOY to $9.2 billion. Every year the business makes a more meaningful contribution to Alphabet’s advertising revenue. Ultimately, AI will help drive growth and innovation across these platforms.
Furthermore, Alphabet’s Gemini AI model is a serious competitor to OpenAI’s ChatGPT 4.0. It offers multimodal capabilities, including handling text, code and images. Alphabet is in a unique position as it holds over 90% search engine market share, with the ability to leverage data like none other. This could give them a significant competition advantage in the marketplace, making them an undisputed leader in the AI race.
On the date of publication, Terel Miles 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.
