Industries are being disrupted by AI, automation, and robotics thanks to technological advancements like Google’s Bard and OpenAI’s DALL-E 2.
Industries are being disrupted by AI, automation, and robotics thanks to technological advancements like Google’s Bard and OpenAI’s DALL-E 2. To stay relevant, companies must invest in AI-related goods and services. Even though many businesses profit, only a small number of stocks have AI and automation at the core of their operations.
Bank of America has listed the following 10 stocks as the top AI investments:
Stock implied an upward turn over the June 12 close:
Microsoft Corp. (ticker: MSFT) 2.5%
Alphabet Inc. (GOOG, GOOGL) 3.5%
Nvidia Corp. (NVDA) 26.6%
Meta Platforms Inc. (META) 10.7%
Taiwan Semiconductor Manufacturing Ltd. (TSM) 7.4%
ASML Holding N.V. (ASML) 17.1%
SAP SE (SAP) 13.6%
RELX Plc (RELX) 17.8%
Arista Networks Inc. (ANET) 0%
Baidu Inc. (BIDU) 74.2%
Microsoft Corp. (MSFT)
Microsoft announced a multiyear, multibillion-dollar investment in OpenAI in 2023 and made a $1 billion investment in the technology in 2019. The ChatGPT search engine was integrated into Bing in February, and thousands of users are now using Teams that are powered by AI.
Microsoft shares will increase, according to analyst Brad Sills, thanks to opportunities in AI and machine learning, Azure expansion, and Office 365 premium sales. For MSFT stock, Bank of America has a “buy” rating and a $340 price target.
Alphabet Inc. (GOOG, GOOGL)
Ad pricing, content promotion, and Gmail spam filters are just a few of the business areas where Google and Alphabet use AI and automation. After being introduced in March, Google’s Bard AI chatbot has since surpassed Bing’s 2.8% market share, according to Statcounter data.
Google is a significant long-term AI beneficiary due to its AI-based advertising technology, data advantages, and distribution advantages. The stock of Googl has a “buy” rating and a $128 price target from Bank of America.
Nvidia Corp. (NVDA)
One of the top AI Stocks to buy is Nvidia. High-end chipmaker Nvidia, whose global market is expanding and whose gaming outlook is improving, is one of the best technology stock picks. Nvidia, according to analyst Vivek Arya, has opportunities to move beyond AI accelerators and into high-performance CPU data processing.
Nvidia is anticipated to keep a 65% market share of accelerators with a long-term earnings per share potential of over $20. For the NVDA stock, Bank of America has a “buy” rating and a $500 price target.
Meta Platforms Inc. (META)
Facebook and Instagram’s parent company, Meta Platforms, has introduced AI Sandbox, a generative AI tool for advertisers. Prior to a wider rollout in July, the company intends to test its initial features using AI Sandbox.
For years, Meta has made investments in AI technology, and Post thinks that AI-related products could raise the stock’s valuation. META stock, which closed at $271.05 on June 12, has a “buy” rating and a $300 price target from Bank of America.
Taiwan Semiconductor Manufacturing Ltd. (TSM)
The demand for chip-on-wafer-on-substrate (CoWoS) has increased at Taiwan Semiconductor Manufacturing, the biggest pure-play semiconductor foundry in the world as a result of generative AI.
The second half of 2023 is when the company’s sales are predicted to rebound from a cyclical low, according to Bank of America, which has a “buy” rating and a $115 price target for TSM stock. Sales of the company are anticipated to increase as a result of the company’s AI expansion from cloud computing to edge devices.
ASML Holding N.V. (ASML)
Due to the increase in AI applications, ASML, a semiconductor fabrication company, anticipates a rise in demand for advanced process nodes. According to analyst Didier Scemama, generative AI could increase yearly spending on wafer fabrication equipment by $3 billion.
It is anticipated that ASML’s earnings multiple will increase, with EPS increasing by at least 22.9% annually through 2025. The ASML stock, which closed at $730.17 on June 12, has a “buy” rating and a $855 price target from Bank of America.
SAP SE (SAP)
AI-driven business solutions for finance, supply chains, procurement, sales, and marketing are provided by SAP, a world leader in ERP software. According to analyst Frederic Boulan, SAP is well-positioned to benefit from the demand for AI.
The business recently announced a joint data analytics offering with Google and displayed its AI offerings at the Sapphire conference. It is anticipated that SAP’s transition to a cloud-based business model will hasten revenue growth and increase margins. The stock of SAP is given a “buy” rating and a $152 price target by Bank of America.
RELX Plc (RELX)
With the acquisition of Aistemos for $36 million, RELX, another of the best AI stocks to invest in, is integrating AI and machine learning into its legal, risk, and science divisions. According to analyst David Amira, the company’s new generative AI research platform will benefit RELX’s legal analytics business.
Amira thinks AI will completely transform the company’s legal division. Bank of America rates the stock as a “buy” with a $37.80 price target and acknowledges the value of RELX’s standing as a trustworthy legal research platform.
Arista Networks Inc. (ANET)
Internet service providers, cloud service providers, and business data centres can use Arista Networks’ cloud networking solutions. For AI workloads, their high-performance products and high-throughput data centre switches are essential.
Although AI is a minor factor in Arista’s revenue growth, it will eventually increase as the industry’s infrastructure for AI develops. Arista has strong profitability, and because component costs are expected to decline in 2023, gross margins should increase. The stock of ANET is given a “buy” rating and a $170 price target by Bank of America.
Baidu Inc. (BIDU)
The leading Chinese internet search company, Baidu, recently unveiled the generative AI product ERNIE Bot. In order to increase sales conversion rates, the company provides advertisers with customer service options and AI-generated content solutions.
Along with integrating AI software into Baidu Search, Baidu is also testing a standalone ERNIE Bot app. For the BIDU stock, Bank of America has a “buy” rating and a $234 price target.