AI is booming, transforming industries like autonomous driving and image recognition. Companies developing AI products and services are set to experience significant growth. Various AI stocks have seen incredible appreciation of late due to chatbots bringing more attention to this space. However, many investors are focused on leading graphics processor companies such as Nvidia (NASDAQ:NVDA), and the stock has surged in response with good reason.
Nvidia is the leader in advanced computing graphics processor units (GPUs). These chips power nearly every application requiring significant computing power. Thus, Nvidia is often seen as the best pure-play AI stock to buy right now.
The reality is that there are other world-class AI stocks worth considering outside of Nvidia. Here are three of my top picks right now.
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Microsoft (NASDAQ:MSFT) has been a top performer in the AI space for several years. Microsoft’s Azure cloud platform is a leader in AI-as-a-service offerings, and the company has invested heavily in research and development of machine learning capabilities. While it may not be the obvious choice when it comes to AI stocks, its advanced artificial intelligence capabilities are among the best in this sector. With the company’s key investment in OpenAI, the company behind ChatGPT, more innovation is likely to come on this front.
After a waitlist period, Microsoft expanded access to its ChatGPT-powered version of Bing, resulting in significant growth. With over 100 million daily active users and a four-fold increase in daily downloads of the Bing mobile app, the search engine has gained significant momentum. New features were also introduced to enhance the user experience, including providing answers with images and videos, chat history recording, chat sharing, and developer capabilities.
Microsoft plans to integrate Bing into ChatGPT, expanding its user base through the platform’s 100 million active users. This presents a significant opportunity for Microsoft to disrupt the industry as traditional search engines often fail to provide satisfactory answers.
Advanced Micro Devices (AMD)
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Investing in high-growth markets is a lucrative strategy and Advanced Micro Devices (NASDAQ:AMD) is a standout stock in this regard. With a strong chip business serving major tech players, AMD’s hardware powers diverse devices and platforms including game consoles, laptops, cloud services, custom-built PCs, and AI programs. This broad market presence enhances the stock’s potential for investors.
AMD stock has outperformed Bitcoin, surging 692% over the past five years. The company’s prospects in thriving markets such as AI and cloud computing make it an attractive investment opportunity at present.
Indeed, AMD is among the AI stocks to buy for investors seeking exposure to semiconductor stocks with significant upside potential. Its recent market performance and diverse customer base suggest a company that is well-positioned for future success. AMD’s commitment to innovation, highlighted by the introduction of products like Ryzen 7040 and MI300 APU, further solidifies its potential for future growth.
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Baidu (NASDAQ:BIDU) continues to lead the AI industry in China, but its early chatbot releases disappointed investors and impacted its stock performance. However, if Baidu can refine its technology and demonstrate its ability to compete with U.S. AI players, it has the potential to make a strong comeback.
Baidu is making significant strides in the AI space following the footsteps of its U.S. counterparts. The company recently demonstrated the capabilities of its chatbot both showcasing its ability to simplify financial statements and to generate PowerPoint presentations through voice commands. Baidu’s Ernie Bot A.I. platform has garnered substantial interest, attracting over 120,000 companies in China for testing.
As a result, BIDU stock has experienced a notable 32% surge in the past six months, with a 4% increase in 2023. These developments highlight Baidu’s growing prominence and potential in the AI market.
On the date of publication, Chris MacDonald has a long position in BIDU. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.
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