Artificial Intelligence Stocks: The 10 Best AI Companies

These companies are leading the way in artificial intelligence.

Artificial intelligence was once a far-off imagination of scientists and sci-fi enthusiasts. Now, the industry has a value just under $1 trillion and is projected to grow to $14 trillion by 2030, according to Ark Invest. That’s because AI is more than just a supercomputer that can play chess and engage in small talk; companies are using AI to automate and streamline their business processes. For example, automated algorithms remove most of the posts that violate Facebook’s community standards. Companies are now working to ramp up such capabilities, developing AI-specific chips and computers that enable companies to complete more complex tasks completely with machines. The industry is in flux, with tech behemoths mixed with fledgling new startups. Here’s a list of the top 10 AI companies.

Nvidia Corp. (ticker: NVDA)

Nvidia is the most valuable semiconductor company in the U.S. The company produces central processing units and graphics processing units for personal computers and corporate data centers. Nvidia has thrived under the current demand for AI services, reporting an increase of 46% in total revenue year over year this past quarter. The company’s gaming and data center divisions both posted record revenue this past quarter, as well, coming in at $3.62 billion and $3.75 billion, respectively. That’s no surprise considering that the company’s technology is used in 355 of the 500 top supercomputers and in all major cloud computing services. Nvidia is also a lead innovator, working on developing the world’s fastest AI supercomputer, dubbed Eos. High-growth Nvidia trades for 29 times forward earnings as of July 8.

Palantir Technologies Inc. (PLTR)

Palantir specializes in security and defense AI technologies. It was awarded a contract by the U.S. Department of Defense to integrate the Army database of personal and security data. The company is branching into the U.K. with an attempt to win a contract with the National Health Service to manage its database services. Normally, such government contracts are viewed as a stable form of income, but with recessionary fears, many are skittish on PLTR stock. Kunal Sawhney, CEO of Kalkine Group, notes that PLTR has plunged 44% year to date through July 8, and its operating margins and free cash flow have also declined year over year. Sawhney cautions: “Despite PLTR’s revenue being estimated to grow in 2022 and 2023, which is likely to draw in investors, those who are wary of the current macroeconomic factors and PLTR’s overdependence on governmental contracts would stay away from it unless there is a change in market sentiments.”

Alphabet Inc. (GOOG, GOOGL)

Alphabet uses AI in nearly every facet of its business. From its targeted ad business in Google and YouTube to its driverless car offerings, building and maintaining strong AI systems is at the heart of the company’s business model. While YouTube is facing hurdles while competing with short-form media app TikTok, the deep integration of machine learning will benefit the company in staying relevant and even outperforming market competitors. Alphabet is one of the largest companies by market capitalization, worth over $1.5 trillion, and has a price-earnings ratio around 21. Alphabet stock is down about 18% this year as of July 8.

Micron Technology Inc. (MU)

Micron is a computer and storage chip manufacturer that produces memory and storage technology for a broad range of industries. The company recently began producing more chips in Japan and announced a $150 billion global expansion plan. The plan will boost investment in manufacturing, research and development by partnering with governments across the world to diversify Micron’s capacity to deliver products. While the company recently warned of declining demand that will affect its products due to the rise in inflation, global demand for advanced chips is bound to increase over the long term as the range of products using those chips also increases. However, Sawhney notes that the current conditions paint a rocky picture of its short-term prospects, stating that “although its third-quarter revenue jumped 16% to $8.64 billion, measuring up to market estimates, MU expects its fourth-quarter revenue to plunge 13% year over year.”

C3.ai Inc. (AI)

C3.ai is an enterprise AI company that focuses on delivering machine learning software to industry leaders. Some of the company’s customers include Shell PLC (SHEL), the U.S. Air Force and Enel SpA (ENLAY). Its software is flexible, providing financial security, product reliability and secure systems across its customer base. For example, by partnering with utility companies like Enel, Duke Energy Corp. (DUK) and the New York Power Authority, C3 assists with ensuring that grid capacity is maximized across the U.S. AI stock is down 36% this year as of July 8, but given its deep foothold across both corporate and governmental end users, it’s a company to keep an eye out for.

Amazon.com Inc. (AMZN)

The average individual conjures up images of shopping carts and Prime deals when they hear “Amazon.” Behind the curtain, however, stands Amazon Web Services, or AWS, which underpins nearly all of the modern day internet. Many companies do not have the capacity to efficiently manage all the data, storage and computing power needed to maintain business operations. Starting in 2006, Amazon began offering its excess data capacity to other entities with a pay-as-you-go price model. Now, a vast swath of businesses depend on the service to deploy their online platform and presence. As of July 8, Amazon stock is down more than 30% this year amid the broader bear market and the sell-off in tech stocks.

Meta Platforms Inc. (META)

Meta changed its image and name as part of its expansion into AI technology. Machine learning was always a keystone of its social media platform Facebook, as algorithms worked to connect individuals with content and companies that would be of interest to them. Now, Meta is letting its AI capabilities seep into different parts of its business. The prospects of this are massive, as recently was shown when AI tools at Meta enabled the translation of over 200 languages with an average increased quality of 44%, when compared to previous AI research. By broadening the range of how its programs use AI, such breakthroughs are bound to become more common. Meta stock is down almost 50% this year through July 8, placing it in possible value stock territory. Meta’s current forward price-earnings ratio is 14.3.

Microsoft Corp. (MSFT)

Microsoft began as a software company but now reaches deep into the AI sphere with its cloud computing program, Azure. Offering secure storage and data capacity to corporations, Azure is a global leader in cloud computing and software development. Recently, Microsoft detailed how its facial recognition software could be used in an effort to increase ethical use of AI. Such moves will prove pivotal as legislators and consumers begin to worry about the privacy threats that AI can pose. Putting these ethical concerns first ensures that Azure is a step ahead to bypass such concerns. Azure and other cloud computing revenue grew 46% year over year last quarter.

International Business Machines Corp. (IBM)

One of the longest-running computing companies, IBM has been at the forefront of data storage and computing technologies for decades. The company’s hallmark AI technology, Watson, aimed to revolutionize how businesses use AI as part of everyday operations. Seventy percent of global banking institutions use the software to streamline their services and provide secure financial transactions. The software can even work in tandem with Azure and AWS, meaning that businesses can use Watson without fully transitioning the framework of their operations. The company saw 8% revenue growth last quarter, with gains led by software and consulting services, which had increases of 12% and 13%, respectively. The company anticipates revenue to continue increasing at a similar pace for the rest of its fiscal year, at the high end of the mid-single digits.

DocuSign Inc. (DOCU)

You might not consider online document signing as the next hub for AI-fueled innovation, but DOCU is making advancements. By providing companies with machine learning tools, DOCU make finding clauses in contracts and signing documents easier and faster. Contract AI can also help businesses understand the legal requirements of documents, locate potential issues that could arise from signing and then help organize contracts with a click of a button. DOCU is down about 56% this year through July 8, but analysts expect double-digit revenue growth in fiscal 2023 and fiscal 2024.

10 of the best AI companies:

— Nvidia Corp. (NVDA)

— Palantir Technologies Inc. (PLTR)

— Alphabet Inc. (GOOG, GOOGL)

— Micron Technology Inc. (MU)

— C3.ai Inc. (AI)

— Amazon.com Inc. (AMZN)

— Meta Platforms Inc. (META)

— Microsoft Corp. (MSFT)

— International Business Machines Corp. (IBM)

— DocuSign Inc. (DOCU)

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Artificial Intelligence Stocks: The 10 Best AI Companies originally appeared on usnews.com

Update 07/11/22: This story was published at an earlier date and has been updated with new information.

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