Investing in stocks is a tricky business. You do it wrong and you lose money fast. You do it right and you can laugh your way out of the bank. Companies like Apple and Microsoft have been some of the fastest-growing companies riding on the wave of the third industrial revolution. If you invested in these companies in the 1980s, you would have had a multi-bagger in your portfolio. This is the reason people are looking into the best ai companies to invest in.
Artificial intelligence could be the next big thing. Companies that rely heavily on AI can offer good returns for the shareholders as this technology matures. Although there is no guarantee, however, research shows that companies that rely on technological innovations typically offer higher returns.
Methodology
We employ an aggregated information approach for preparing the list of top companies to invest in. We used the information from six different sources to prepare the initial list of companies. Then we filtered the list based on the AI centricity of the company. We eliminated companies that are not primarily based on AI. We used the company homepage and the latest annual report to ascertain the AI-centricity of the firm. Then we tallied the number of sources citing these stocks as value AI investment.
| Company | Code | USNEWS | Investors | Fool | Yahoo Finance | Economy Watch | NASDAQ | Total |
| Accenture | ACN | Y | 1 | |||||
| Alphabet | GOOGL | Y | Y | 2 | ||||
| Amazon | AMZN | Y | Y | Y | Y | 4 | ||
| Apple | AAPL | Y | Y | Y | 3 | |||
| Applied Materials | AMAT | Y | 1 | |||||
| C3.ai | AI | Y | Y | Y | 3 | |||
| Coupa | COUP | Y | 1 | |||||
| Crowdstrike Holdings | CRWD | Y | 1 | |||||
| Docusign | DOCU | Y | Y | Y | 3 | |||
| Epam Systems | EPAM | Y | 1 | |||||
| FB | Y | Y | 2 | |||||
| IBM Corp | IBM | Y | Y | Y | Y | Y | 5 | |
| Intel Capital | INTC | Y | 1 | |||||
| Micron Technology | MU | Y | Y | Y | 3 | |||
| Microsoft Corp | MSFT | Y | Y | 2 | ||||
| Nvidia | NVDA | Y | Y | Y | Y | Y | Y | 6 |
| Palantir | PLTR | Y | 1 | |||||
| Qualcomm | QCOM | Y | Y | 2 | ||||
| ServiceNow | NOW | Y | Y | 2 | ||||
| Snowflake Inc | SNOW | Y | 1 | |||||
| Splunk Inc | SPLK | Y | 1 | |||||
| Taiwan Semiconductor Manufacturing | TSM | Y | 1 | |||||
| Twilio Inc | TWLO | Y | 1 | |||||
| UiPath Inc | PATH | Y | 1 | |||||
| Zendesk | ZEN | Y | 1 | |||||
| ZoomInfo Technologies | ZI | Y | 1 |
The top 3 AI companies to invest in
- NVIDIA
- IBM
- Amazon
NVIDIA (NVDA)
Nvidia is an American company known for its graphics cards or Graphical Processing Units (GPUs). The homepage of their website clearly demonstrates their commitment to artificial intelligence. The title of the page reads ‘Artificial Intelligence Computing Leadership from NVIDIA.’ NVIDIA has invested heavily into technologies that can drive the artificial intelligence platforms of the future. The tech-savvy readers may be aware that AI can benefit immensely from the use of GPUs. GPUs are far more optimum for AI type of computation when compared to CPUs or Central Processing Units. A modern GPU may contain over 1500 to 5000 processing cores while a CPU typically has about 4 to 12 cores. Also, the manufacturing of such sophisticated hardware has very deep dependencies. You can’t have an overnight competition from new entrants. Remember Porter’s five forces?
There is a strong reason for the inclusion of NVIDIA in most of the lists presented above. Firstly, hardware is an essential player in any digital transformation. If we look back to the 1980s and 1990s, Major hardware players saw immense growth. The steam story can be repeated in this industrial revolution as well. NVIDIA is one of the largest companies in the world that is focused on making hardware for AI computing. Therefore, it will enjoy a decent market share in the foreseeable future.
IBM (IBM)
IBM is one of The Pioneers who jumped on the AI bandwagon. They have been marketing their AI supercomputer, which is the IBM Watson for over two decades now. It got a lot of media coverage when it defeated human players in the game of Jeopardy. However, it has now evolved into a full-fledged enterprise AI solution.
On one hand, we saw how NVIDIA plans to create value through AI hardware products. On the other hand, IBM positions itself as a service company. IBM offers a host of software as a service or SaaS packages for AI-based applications. Some of the key offerings are:
- IBM Watson Assistant – multichannel communication solutions
- IBM Watson Discovery – data analytics platform
- IBM Watson Natural Language Understanding – text analytics
- IBM Watson Speech to Text – transcription services
- IBM Watson text to Speech – TTS engine
- IBM Watson Knowledge Studio – domain specific knowledge
- IBM Watson Language Translator – translation engine
- IBM MaaS360 with Watson – cloud unification
They have built some specific industry or domain-specific tools and solutions. It encompasses everything from IT security to marketing automation.
Amazon (AMZN)
Although IBM was one of the highly revered companies of the 20th century, Amazon commands a similar respect today. We can safely say that it is not a startup anymore. Amazon has matured as not the largest marketplace in the world, but also a leading cloud service provider. It offers a host of AI as a service over its AWS or Amazon Web Services platform. Secondly, Amazon is also one of the leaders in AI assistants. Amazon Alexa is the third most popular virtual assistant after Apple Siri and Google Assistant.
When we specifically talk about the enterprise AI solution, the first Amazon product that comes to mind is Amazon SageMaker. They try to differentiate it from other solutions by making it easier to build and deploy. This platform promises easy deployment of ML algorithms. They offer solution-specific algorithms related to Business process centers, marketing, document processing, fraud detection engines, media intelligence, data analytics, DevOps, and business transformation.
Are there some other AI companies to invest your money?
Of course, there is no dearth of good investment opportunities. Firstly, this list focuses only on American companies. There are several AI companies located in different places in the world. Also, many new AI startups are coming up every day. It requires higher due diligence to invest in these smaller companies. You may need to closely follow the latest IPOs to catch these investments early. We shall be updating this list with such opportunities soon. However, in this list, we have only included the top three companies that are relatively safer bets. These companies are also diversified into many different business domains. This diversification of business means a lesser risk for the investors. Please feel free to share your thoughts in the comment section below.