Artificial intelligence (AI) cloud computing stocks are benefiting a great deal from the advent and proliferation of artificial intelligence. Cloud providers that are getting the biggest lift from the AI boom are those that provide the data centers where AI systems are “trained and housed,” Matt Biringer, the co-founder and CEO of cloud AI optimization firm North told InvestorPlace in an email.

Launched last year, North has already “used AI to save companies $20 million in cloud data center costs,” Biringer stated. As more AI is deployed, greater cloud capacity is needed, he explained. Meanwhile, AI also improves cloud providers’ products. That’s because the technology enables firms to avoid using cloud capacity when there’s no demand for it, saving them a great deal of money, Biringer explained. “AI can predict what servers and databases a client actually needs and when, while adjusting the switch accordingly,” he wrote. Here are three top AI cloud computing stocks to buy.

Amazon (AMZN)

The revenue of Amazon’s (NASDAQ:AMZN) cloud unit, Amazon Web Services, jumped 19% versus the same period a year earlier to $26.3 billion. Analysts, on average, were expecting the unit’s sales to climb only 17.6% year-over-year.

CEO Andy Jassy reported that AWS has a great deal of “potential,” given the likely rapid growth of AI going forward. ” Our AI business continues to grow dramatically with a multi-billion dollar revenue run rate despite it being such early days,” the CEO stated on the company’s earnings call.

He noted that the firm’s AI system, Amazon Bedrock, “has the largest selection of models (and) the best generative AI capabilities in critical areas.” And according to the CEO, “tens of thousands” of companies” are already using Bedrock.

Matt Biringer, the CEO of cloud AI optimization firm North whom I quoted extensively in the introduction to this column, stated that Amazon is already a “big winner” from the AI boom.

Given Amazon’s quick start when it comes to providing cloud services for AI users, it’s one of the top AI cloud computing stocks to buy.

Microsoft (MSFT)

The revenue of Microsoft’s (NASDAQ:MSFT) cloud unit, Azure, soared 29% last quarter versus the same period a year earlier. While the increase came in slightly below the firm’s previous guidance of a 30%-31% year-over-year increase, it was still a very impressive gain. I believe that Azure’s rapid growth shows that it is benefiting a great deal from the AI boom.

Indeed, Microsoft, reported that its “AI services” had boosted “its Azure and other cloud services revenue” by eight percentage points YOY.

In a note to investors shortly before Microsoft released its quarterly results, Goldman Sachs wrote that the software giant was benefiting from Azure’s market share gains and its “leadership in [generative artificial intelligence].”

In light of Azure’s tremendous success when it comes to supporting AI, I view Microsoft as one of the top AI cloud computing stocks to buy.

ServiceNow (NOW)

ServiceNow’s (NYSE:NOW) software helps its customers migrate their data smoothly and securely to the cloud Moreover, the company owns data centers that “support its cloud-based platform and solutions,” which include AI-based products. Given these points, I put ServiceNow in the category of AI cloud computing stocks.

Last quarter, the net new annual contract value of the company’s AI-capable software, known as Pro Plus, doubled versus the previous quarter, MHMCorgan Stanley reported. Moreover, firms signed 11 deals for Pro Plus that were worth over $1 million in Q2, and ServiceNow was able to increase the price of Pro Plus by over 30%.

Among the companies that are using Pro Plus are Honda (NYSE:HMC), Merck (NYSE:MRK), Adobe (NASDAQ:ADBE), and Dell (NYSE:DELL).

Meanwhile, ServiceNow expanded in the Middle East last quarter, as it announced that it would “launch a ServiceNow UAE cloud hosted on Microsoft Azure,” The deal will enable the firm to provide its offerings in the UAE. The company also intends to offer more products in India and Southeast Asia.

On the date of publication, Larry Ramer held a long position in AMZN and his wife held a long position in NOW. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.        

On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.