Artificial intelligence, automation and robotics are disrupting virtually every industry. In the past year, the world has gotten a firsthand look at remarkable advances in AI technology, including OpenAI’s ChatGPT AI chatbot, GitHub’s Copilot AI code generation software and Google’s Gemini AI model.
Whether it be machine learning, large language models, smart applications and appliances, digital assistants, synthetic media software or autonomous vehicles, companies that aren’t investing in AI products and services risk becoming obsolete. Countless companies stand to benefit from AI, but a handful of stocks have AI and automation as a central part of their businesses.
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Here are 10 of the best AI stocks to buy, according to Argus:
| Stock | Implied upside from June 6 Close |
| Microsoft Corp. (ticker: MSFT) | 11.9% |
| Alphabet Inc. (GOOG,GOOGL) | 13.2% |
| Amazon.com Inc. (AMZN) | 10.8% |
| Nvidia Corp. (NVDA) | -9.1% |
| Meta Platforms Inc. (META) | 11.4% |
| Taiwan Semiconductor Manufacturing Co. Ltd. (TSM) | -1.3% |
| Adobe Inc. (ADBE) | 47.3% |
| ASML Holding NV (ASML) | -5.0% |
| International Business Machines (IBM) | 33.8% |
| Arista Networks Inc. (ANET) | 6.2% |
Microsoft Corp. (MSFT)
Microsoft has invested $13 billion into OpenAI and has integrated ChatGPT into its Bing search engine. Microsoft has also integrated all its AI copilots into a single AI experience called Microsoft Copilot. In March, Microsoft revealed its first Surface PCs that come with a dedicated Copilot AI button to easily access an OpenAI-backed AI chatbot. Analyst Joseph Bonner says Microsoft is going all-in on AI technology by ramping up investments in internal development and external startups. AI technology accounted for 7% of Azure’s growth in the most recent quarter. Argos has a “buy” rating and $475 price target for MSFT stock, which closed at $424.52 on June 6.
Google and YouTube parent company Alphabet uses AI and automation in virtually every facet of its business, from ad pricing to content promotion to Gmail spam filters. Google launched its Bard AI chatbot in March 2023. In December, Google announced Gemini, its most capable and general AI model ever. Google is reportedly considering only offering its AI search features to premium subscribers, which could boost subscription revenue. Alphabet is an early leader in generative AI, and Bonner says the company’s stock is attractively valued given its impressive technology. Argus has a “buy” rating and $200 price target for GOOGL stock, which closed at $176.73 on June 6.
Amazon.com Inc. (AMZN)
Amazon has integrated AI into every aspect of its business, including targeted advertisements, marketplace search and recommendation algorithms, and Amazon Web Services. Amazon offers a wide range of AI and machine learning services to its AWS cloud customers, including advanced text analytics, automated code reviews and chatbots. In March, Amazon announced it is investing another $2.75 billion in Anthropic, maker of AI foundation model and chatbot Claude, bringing its total investment up to $4 billion. Analyst Jim Kelleher says AI integration has significantly improved AWS cloud margins. Argus has a “buy” rating and $205 price target for AMZN stock, which closed at $185 on June 6.
Nvidia Corp. (NVDA)
High-end chipmaker Nvidia provides the massive processing power needed to run advanced AI applications. Nvidia has been one of the best-performing stocks in the entire market in recent years, and it’s largely due to the company’s AI exposure. At its annual developer conference in March, Nvidia unveiled its new Nvidia Blackwell platform and AI chips, which it claims can perform certain tasks 30 times faster than existing AI chips. Kelleher says accelerating AI chip demand is driving triple-digit percentage gains in both revenue and earnings. Argus has a “buy” rating and $1,100 price target for NVDA stock, which closed at $1,209.98 on June 6.
Meta Platforms Inc. (META)
Meta Platforms is a market leader in social media and online advertising and is the owner of Facebook, Instagram and other platforms. In April, Meta announced Meta AI, a new AI assistant built using its Llama 3 model that the company claims is the most intelligent AI assistant available for free. Bonner says CEO Mark Zuckerberg’s recent comments on surging AI costs spooked the market, but investors should trust in Zuckerberg’s long-term track record of success in building innovative products and then monetizing them over time. Argus has a “buy” rating and $550 price target for META stock, which closed at $493.76 on June 6.
Taiwan Semiconductor Manufacturing Co. Ltd. (TSM)
Taiwan Semiconductor Manufacturing is the world’s largest pure-play semiconductor foundry. Taiwan Semi manufactures all the advanced AI semiconductors for Nvidia and other AI chipmakers. CEO C.C. Wei recently described the AI-driven demand Taiwan Semiconductor is experiencing as “insatiable,” particularly when it comes to demand for upgrades from traditional servers to AI servers. Kelleher says enterprise demand for generative AI solutions will remain a demand driver for high-end semiconductors and shares of Taiwan Semi represent an investment in the leading merchant fabrication company at an attractive valuation. Argus has a “buy” rating and $160 price target for TSM stock, which closed at $162.07 on June 6.
Adobe Inc. (ADBE)
Adobe produces creative content software and other applications used for marketing and e-commerce. The company’s Firefly generative machine learning model is generating customer interest across Photoshop, Illustrator and other platforms. Adobe has also applied its Sensei AI and machine learning technology to its Adobe Analytics, Campaign and Target products. In May, Adobe announced Acrobat AI Assistant for enterprise customers, a generative AI-powered conversational engine that can boost document productivity. Bonner says Adobe has released several generative AI applications and will likely continue to integrate additional AI features. Argus has a “buy” rating and $675 price target for ADBE stock, which closed at $458.13 on June 6.
ASML Holding NV (ASML)
ASML produces photolithography systems and other processing equipment used in semiconductor fabrication. ASML is the only major producer of the extreme ultraviolet (EUV) lithography equipment necessary to produce advanced AI chips. ASML CFO Roger Daasen recently predicted a rebound in sales driven in part by the opening of new U.S. chip manufacturing facilities subsidized by the CHIPS Act. Kelleher says demand for generative AI applications and premium-tier edge devices will help ASML sales accelerate in 2025. He says ASML is favorably valued for an AI stock. Argus has a “buy” rating and $1,000 price target for ASML stock, which closed at $1,052.61 on June 6.
International Business Machines (IBM)
For years, IBM has been developing ways to adapt its AI supercomputer Watson to revolutionize health care, finance, law and academia. IBM’s portfolio of Watson AI solutions includes applications to improve customer service, automate workflow processes and predict outcomes. IBM’s Watson Studio even helps enterprise customers build proprietary AI applications. In May, NASA and IBM Research announced the Prithvi-weather-climate foundational model, which uses AI technology to better predict local weather and climate patterns. Kelleher says IBM’s HashiCorp acquisition will further improve its AI solutions infrastructure and security. Argus has a “buy” rating and $225 price target for IBM stock, which closed at $168.20 on June 6.
Arista Networks Inc. (ANET)
Arista Networks supplies cloud networking solutions to internet companies, cloud service providers and enterprise data centers. Arista’s high-performance cloud networking solutions and high-throughput data center switches are necessary to provide the processing power required for intensive AI workloads. Arista has repeatedly stated its goal of reaching $750 million in AI networking revenue in 2025. Kelleher says Arista has a growing AI opportunity, and the company is already delivering optimal networking for AI platforms. He says Arista is a top-tier long-term investment in the cloud networking market. Argus has a “buy” rating and $315 price target for ANET stock, which closed at $296.57 on June 6.
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Artificial Intelligence Stocks: The 10 Best AI Companies originally appeared on usnews.com
Update 06/07/24: This story was previously published at an earlier date and has been updated with new information.
