AI stocks: Missed out on Nvidia? Here are two stocks that still offer good opportunities

Many artificial intelligence (AI) stocks have soared this year as traders continue to invest in the space. Photo: Getty.

Investors continue to buy into technology firms investing in artificial intelligence (AI) with the hype further steering market sentiment in the direction of particular stocks which are already making headlines in the sector.

The challenge for investors, however, is distinguishing the companies that will continue to succeed from those that could end up going bust.

As a result, one potential solution for investors is to put money into the already top performing firms that have AI exposure.

Here are two stocks in the AI space to watch, according to Interactive Investor’s head of investment, Victoria Scholar.

After last year’s tech wreck when many stocks in the technology sector were heavily punished, Microsoft has been staging an impressive comeback.

“Shares are up around 45% this year, landing it among the best performing US stocks so far,” Scholar said.

She further noted that the company hit a record closing high this June, surpassing its all time peak from November of 2021 – and JP Morgan and Mizuho both raised their price targets on the stock recently.

“Its blockbuster run has been powered by optimism towards its AI exposure. Microsoft has benefited from Chat GPT, which was released last November and has been dominating the headlines ever since, thanks to its impressive prowess. Chat GPT was started by Open A.I., which is backed by Microsoft,” Scholar added.

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Moreover, the analyst noted, Microsoft’s search tools Bing and its Windows operating system both use open AI with more opportunities likely just round the corner.

It comes as the company’s finance chief, Amy Hood, said recently that next generation AI will be the fastest growing $10bn (£7.86bn) business in our history.

Another stock Scholar said to watch is the Dutch supplier to the chip-making industry, ASML.

“It’s up by almost a third so far this year and makes equipment required in the production of artificial intelligence chips. The boom in AI has pushed end video to a valuation of over $1trn briefly at the end of May.

“ASML, whose lithography machines are required to build Nvidia’s most advanced chips, has been rallying amid the excitement. Its most advanced machines go for around €350m each, and it’s the only firm able to build them. ASML’s stock market valuation is much cheaper than that of NVIDIA, but faces less competition and is just as essential to the growth they are,” she told Yahoo Finance.

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Remember, past performance is not a guarantee of future results. Do your own research and always remember your decision to trade depends on your attitude to risk, your expertise in this market, the spread of your investment portfolio and how comfortable you feel about losing money. Moreover, never trade more than you can afford to lose.

AI stocks to watch

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