AI has revolutionized global industries, from brewing beer to crafting fanfiction. When seeking top AI stocks to buy, I think it’s best for investors to focus on top-tier companies with robust resources and expertise. These giants continue to innovate with substantial R&D spending, practical applications, and scalable production capabilities.
Generative AI has significantly reshaped industries and dominated stock markets, especially during last year’s record gains. The recent first-quarter earnings season underscored AI’s pervasive influence, with tech firms consistently exceeding analyst forecasts. AI-powered stocks propelled the market to a 10.2% surge in Q1, its strongest since 2019, marking the fifth consecutive quarter of surpassing expectations.
With that said, here are three leading AI stocks poised to drive significant advancements and shareholder upside over the long-term.
Nvidia (NVDA)
No list of top AI stocks is complete without discussing Nvidia (NASDAQ:NVDA). The company’s CEO Jensen Huang has become a rockstar, for a number of reasons. His strategic leadership for the company and management style has created greater transparency and agility for the world’s largest high-performance chip maker to continue to outperform in this current market. In order for AI to be successful as a broad technology, Nvidia’s chips are going to be necessary to fuel this revolution.
NVDA stock has continued to surge following its announced 10-for-1 stock split, an indication investors want more of what the company has to offer. Post-split, Nvidia shares opened around $120, a minor drop, though the company’s stock price has since minted new highs above $130 per share. Many experts and market watchers believe $150 is a reasonable target by year end, due to the fact Nvidia is perhaps the best example of a prime beneficiary of the AI revolution.
The company has long led in machine learning benchmarks and continues to expand its dominance. The company’s latest MLPerf tests, known as the “Olympics of machine learning,” introduced new benchmarks for fine-tuning large language models and graph neural networks. Despite competition from other mega-cap tech players, Nvidia’s Hopper architecture (set up in a system featuring 11,616 H100 GPUs) set records in nine benchmarks, including the new ones. This is yet another catalyst investors have to point to as a reason to buy this top AI stock right now.
Microsoft (MSFT)
Currently trading at $448 per share and up 20% year-to-date, Microsoft (NASDAQ:MSFT) truly holds a bright future. Its strategic investment in OpenAI and commitment to AI infrastructure solidify its market leadership. With strong cloud revenue and a stable dividend yield, Microsoft remains a top choice for long-term investors.
Starting from September 16, 2024, Microsoft phased out Basic Authentication (username and password) for Outlook clients across personal accounts. This outdated method posed security risks by transmitting credentials without encryption, making users vulnerable to interception by network monitoring tools.
Additionally, cached credentials could be exploited if a device fell into the wrong hands. The company emphasized its shift to modern authentication ways like multi-factor authentication and token-based systems. This enhances its security offers more against cyber threats.
As the company continues to integrate AI technology into its business model, Microsoft stands as a key buying opportunity at this point in the AI hype cycle.
Palantir Technologies (PLTR)
Since the company launched its Artificial Intelligence Platform (AIP) last year, Palantir Technologies (NYSE:PLTR) has been progressing well in recent months. The company’s bootcamps for organizations successfully converted leads by deploying large language models through AIP, driving a 21% revenue increase in Q1 to $634 million.
In Q1 2024, Palantir’s total revenue rose 21% to $634 million, with government revenue up 16% to $335 million and commercial revenue soaring 27% to $299 million. The company’s accelerated commercial revenue growth was driven by increased adoption of its AI platform. Palantir’s strategy includes conducting “bootcamps” to educate customers on AI deployment, with sessions held for 915 organizations, enhancing customer acquisition.
With over two decades of experience, Palantir serves both government and commercial sectors. Now trading around $25 per share and up 40% year-to-date, Palantir appears poised for continued growth.
On the date of publication, Chris MacDonald 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.
