Jasmine Birtles
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5 AI stocks to look out for in 2024
Karl
18th Dec 2023
The pages of history will undoubtedly mark 2023 as the turning point when Artificial Intelligence (AI) stepped into the limelight. If you’ve been closely monitoring the sector over the past 12 months or so, it’s likely you’re already aware of the extraordinary pace in which AI is evolving.
Because of the success of AI in 2023, investors have – perhaps understandably – been falling over themselves to stash their capital into the sector. Because of this, we’ve seen the value of AI firms skyrocket this year.
So, will 2024 follow the same trend? Or is everyone getting a little too carried away with the chatbot revolution? In this article we’re going to explore how AI has developed in 2023, and take a look at some stocks to watch out for in the new year.
Scroll down for all of the details or click on a link to head straight to a specific section…
The AI stocks to look out for in 2024
How has AI evolved in 2023?
After being released by little-known Open AI in late 2022, it didn’t take long for ChatGPT to capture the public’s imagination
The AI chatbot, the first to offer human-like responses to questions, became the fastest-growing consumer internet app of all time, surpassing a whopping 100 million users in just two months. To put that into perspective, it took Facebook four and a half years to reach the same milestone. Twitter, or ‘X,’ took over five years to hit 100 million users.
The year of the chatbot
Since the reveal of ChatGPT, we’ve seen its maker, Open AI, release ChatGPT 4 – a more sophisticated paid-for version. We’ve also seen the launch of copycat chatbots from the likes of Google, Meta, and even Elon Musk.
Once the public had a peek of the capability of these chatbots, it soon became clear that the AI revolution was just getting started.
Aside from responding to text, there are now AI tools out there with computer vision. In other words AI tools can already recognise and identify objects, people, and scenes in images and videos. Such technology is already being used in self-driving cars, medical imaging, and facial recognition.
In addition AI tools today also boast machine learning. This means they can learn from data without being programmed in advance making it possible for them to identify patterns, make predictions, and adapt to new situations on the spot. We’re already seeing this technology used in things like fraud detection and personalised product recommendations (think about that the next time you browse on Amazon!).
Remember, this acceleration of AI has all happened in a very short space of time. Goodness knows what AI will look like a year from now!
Of course, without a crystal ball (and world-leading technical expertise), it’s difficult to predict just how far the current AI uprising will take us. But one thing for certain is that we’ve yet to see the full capabilities of the technology.
We’re sure you’ll agree that the current position we’re in is both exciting AND scary!
The AI stocks to look out for in 2024
Now we’ve touched on how much AI has evolved over the past several months, we’ve put together a list of publicly traded AI stocks which all have the potential to do well in 2024…
Note: Before you consider investing in AI stocks, bear in mid that just because a stock has recently gone up, that doesn’t mean it will continue to do so. Remember, past performance should not be used as a reliable indicator of future performance.
1. NVIDIA
What a year it’s been for NVIDIA. The world’s leading AI chipmaker has seen its value surge over the past 12 months. Between 1 January 2023 and 14 December 2023, the time of writing, NVIDIA shares are up a colossal 235%!
With the company now valued at over $1 trillion, who knows how high its stock price could go in 2024? It’s been suggested demand for NVIDIA’s chips is outstripping supply by at least 50%, so it would take a brave soul to bet against the company right now.
2. Microsoft
Another AI stock to watch is Microsoft. Hardly an undiscovered name, we know, but it’s worth appreciating just how seriously the firm is taking the AI revolution.
Microsoft was one of the earliest adopters of AI, and the firm played a huge part in getting Open AI’s ChatGPT off the ground thanks to the small matter of a $10 billion investment into the firm. Microsoft has since integrated the latest version of GPT within its ‘Bing’ search engine.
So far in 2023 Microsoft shares are up 56%.
3. Palantir Technologies
Palantir Technologies is another firm that’s on our list of stocks to watch in 2024.
The US-based company specialises in big data analytics, and recently launched its very own Artificial Intelligence Platform which can integrate large language models into privately operated networks.
Palantir Technologies stock has risen 188% this year.
4. Alphabet
Alphabet – owner of Google – is another huge player in the AI sphere, and has been hot on the heels of Open AI ever since it launched ChatGPT. In March, Alphabet treated the public to its own AI chatbot, ‘Bard’.
While Bard had access to real-world data on the day it launched, it’s fair to say its intelligence level was a step below that of ChatGPT. While the chatbot has since improved a tad, many believe Alphabet was blindsided by the unexpected brilliance of ChatGPT.
That said, Alphabet isn’t going away any time soon. It recently showcased its new AI tool, Gemini which can respond to text, images, video, audio, and code. If you haven’t watched the demo on YouTube, it’s clear to see that Alphabet is aiming to take AI technology to the next level.
Since the beginning of the year, Alphabet’s stock has risen an impressive 49%. If Gemini takes off next year, then who knows how high its stock could climb in 2024.
5. C3.ai
California-based C3.ai provides enterprise AI applications to firms within the manufacturing, financial services, government, utilities, chemicals, defense, intelligence sectors, and more. In layman’s terms, this means the company works with firms to accelerate their transformation into the digital sphere.
CS.ai only went public in 2020 but that hasn’t stopped investors backing the company. So far in 2023, its stock has risen an almighty 171%.
How to invest in AI
If you’re looking to invest in AI, you’ve three ways to go about it. You can:
- Buy shares in firms involved in AI. To do this you’ll need a brokerage account. (Note: If buying US-based shares, you’ll have jump through a few hoops. See: how to buy US shares in the UK.)
- Invest in related industries. Putting your capital in specific industries is another way to invest to AI – even if it’s a less direct approach. Healthcare, science and research, and education, are just some of the industries likely to benefit from rapid AI advancement in the coming years.
- Invest in an AI fund. If you want exposure to multiple AI forms but don’t have a desire to own single shares, buying an AI fund, such as an AI exchange-traded fund ETF, is likely your best bet. There’s already a host of AI ETF’s out there such as the Global X Robotics & Artificial Intelligence ETF and the AI Powered Equity ETF. Both give strong exposure to the AI sector.
To learn more about these steps take a look at our article that explains how to invest in artificial intelligence.
Do you want to learn more about investing? To keep on top of the latest developments in the wider investing sphere sign up to the fortnightly MoneyMagpie Investing Newsletter. It’s free and you can unsubscribe at any time.
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence. Companies listed above are not necessarily endorsed by Money Magpie. When investing your capital is at risk.
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