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.
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With advances in machine learning, large language models, smart applications and appliances, digital assistants, synthetic media software and 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. Here are 10 of the best AI stocks to buy, according to Argus:
| Stock | Implied Upside from July 5 close |
| Microsoft Corp. (ticker: MSFT) | 1.6% |
| Alphabet Inc. (GOOG,GOOGL) | 4.9% |
| Amazon.com Inc. (AMZN) | 2.5% |
| Nvidia Corp. (NVDA) | 19.2% |
| Meta Platforms Inc. (META) | 1.9% |
| Taiwan Semiconductor Manufacturing Co. Ltd. (TSM) | -13.0% |
| Adobe Inc. (ADBE) | 16.7% |
| ASML Holding NV (ASML) | -6.9% |
| International Business Machines (IBM) | 27.8% |
| Arista Networks Inc. (ANET) | -14.0% |
Microsoft Corp. (MSFT)
Microsoft has plowed $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 May, Microsoft published its inaugural Responsible AI Transparency Report, publicly detailing the company’s AI practices, spelling out its AI goals and highlighting its accountability initiatives. Analyst Joseph Bonner says Microsoft is ramping up its AI commitments by developing its own internal technology and investing heavily in OpenAI and other AI startups. Argus has a “buy” rating and $475 price target for MSFT stock, which closed at $467.56 on July 5.
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 2023, Google announced Gemini, its most capable and general AI model ever. In May, Google launched AI Overview, a service that provides AI-generated summaries on the top of Google search results. Bonner says Google’s AI tech has helped fend off competition from other AI search and advertising platforms. Argus has a “buy” rating and $200 price target for GOOGL stock, which closed at $190.60 on July 5.
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. Amazon is reportedly investing $100 billion over the next decade in building a network of AWS data centers that can handle the tremendous AI workload that is coming. Analyst Jim Kelleher says the global push for generative AI has reinvigorated AWS. Argus has a “buy” rating and $205 price target for AMZN stock, which closed at $200 on July 5.
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. CEO Jensen Huang recently announced Nvidia will begin designing and rolling out new AI chips on an annual basis rather than the two-year chip refresh cycles it has used in the past. Analyst Jim Kelleher says Nvidia’s data center and AI businesses are central to its growth trajectory. Argus has a “buy” rating and $150 price target for NVDA stock, which closed at $125.83 on July 5.
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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. Meta is reportedly soon planning to release free AI customer-relations chatbots on its WhatsApp messaging platform. The move will be a test of CEO Mark Zuckerberg’s bold strategy to make Meta’s AI technology free and open to the public in an effort to gain market share and drive down competitors’ prices. Bonner says Zuckerberg has a history of building massive user bases and then monetizing them. Argus has a “buy” rating and $550 price target for META stock, which closed at $539.91 on July 5.
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 a major earthquake in Taiwan in April will likely weigh on gross margins in the near term, but enterprise generative AI solutions demand will fuel high-end semiconductor demand growth for years ahead. Argus has a “buy” rating and $160 price target for TSM stock, which closed at $183.99 on July 5.
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 will continue to invest in generative AI product extensions in pursuit of a growing addressable market. Argus has a “buy” rating and $675 price target for ADBE stock, which closed at $578.34 on July 5.
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 Dassen 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’s revenue growth accelerate in 2025. He says ASML shares are also attractively valued. Argus has a “buy” rating and $1,000 price target for ASML stock, which closed at $1074.48 on July 5.
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 help improve its Hybrid cloud and AI solutions security. Argus has a “buy” rating and $225 price target for IBM stock, which closed at $176.02 on July 5.
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 generative AI software has boosted spending on cloud-based data center networking capable of supporting large language models, and he says Arista is providing optimal networking infrastructure for accounts payable platforms and outcomes. Argus has a “buy” rating and $315 price target for ANET stock, which closed at $366.14 on July 5.
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Artificial Intelligence Stocks: The 10 Best AI Companies originally appeared on usnews.com
Update 07/08/24: This story was previously published at an earlier date and has been updated with new information.
