Artificial intelligence, automation and robotics are disrupting virtually every industry. In recent years, 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* |
| Microsoft Corp. (ticker: MSFT) | 30.9% |
| Nvidia Corp. (NVDA) | 45.9% |
| Alphabet Inc. (GOOG, GOOGL) | 32.7% |
| Amazon.com Inc. (AMZN) | 19.6% |
| Meta Platforms Inc. (META) | 19.9% |
| Taiwan Semiconductor Manufacturing Co. Ltd. (TSM) | 27.5% |
| ASML Holding NV (ASML) | 66.0% |
| Adobe Inc. (ADBE) | 19.8% |
| International Business Machines Corp. (IBM) | 12.1% |
| Arista Networks Inc. (ANET) | 24.1% |
*Over Sept. 6 closing price.
Microsoft Corp. (MSFT)
Microsoft has invested $13 billion in 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. Microsoft recently announced it will begin testing its controversial Recall AI search feature that takes screenshots of user activity starting in October. Analyst Joseph Bonner says Microsoft is all-in on AI technology, investing heavily in both AI acquisitions and internal development. AI services contributed eight percentage points of Azure cloud services’ 29% revenue growth in its most recent quarter. Argus has a “buy” rating and $526 price target for MSFT stock, which closed at $401.70 on Sept. 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. Nvidia recently said countries around the world seeking to build unique AI models incorporating their own languages, cultures and data will account for billions of dollars in fiscal 2025 sales for the company. Analyst Jim Kelleher says Nvidia has a dominant share of the AI graphics processing unit market. Argus has a “buy” rating and $150 price target for NVDA stock, which closed at $102.83 on Sept. 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 2023, Google announced Gemini, its most capable and general AI model ever. In July, Google’s DeepMind AI unit announced AI models AlphaProof and AlphaGeometry 2 successfully solved four out of six advanced math problems at the 2024 International Math Olympiad. Bonner says Google is successfully fending off AI search competition. Argus has a “buy” rating and $200 price target for GOOGL stock, which closed at $150.72 on Sept. 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. Amazon is reportedly planning to roll out a new version of Alexa powered by Anthropic’s Claude AI models ahead of the 2024 holiday shopping season. Kelleher says global generative AI software investments have reinvigorated AWS revenue growth. Argus has a “buy” rating and $205 price target for AMZN stock, which closed at $171.39 on Sept. 6.
Meta Platforms Inc. (META)
Meta Platforms is a market leader in social media and online advertising and is the parent company of Facebook, Instagram and other platforms. CEO Mark Zuckerberg has adopted a bold strategy of making Meta’s AI technology free and open to the public in an effort to gain market share and drive down competitors’ prices. Zuckerberg recently credited AI for improving user recommendations and boosting advertising efficacy on Meta’s platforms. Bonner says Zuckerberg has an impressive track record of building large user bases and successfully monetizing them. Argus has a “buy” rating and $600 price target for META stock, which closed at $500.27 on Sept. 6.
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Taiwan Semiconductor Manufacturing Co. Ltd. (TSM)
Taiwan Semiconductor Manufacturing is the world’s largest pure-play semiconductor foundry. Taiwan Semiconductor manufactures all the advanced AI semiconductors for Nvidia and other AI chipmakers. In June, CEO C.C. Wei said AI-driven demand makes him “very optimistic” about Taiwan Semiconductor’s outlook for the next several years. Kelleher says growth in generative AI, a rebound in electronic device demand and receding inflation will help Taiwan Semiconductor maintain solid growth numbers. He says demand for the company’s five-nanometer products remains strong as it ramps up production of three-nanometer products. Argus has a “buy” rating and $200 price target for TSM stock, which closed at $156.82 on Sept. 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. Taiwan Semiconductor and Samsung Electronics Co. Ltd. (OTC: SSNLF) are two of ASML’s largest customers. Nvidia relies on Samsung and Taiwan Semi to manufacture the AI chips that Microsoft and Google are buying in massive quantities for their AI-capable data centers. Kelleher says generative AI applications and premium-tier edge devices will support EUV and deep ultraviolet lithography demand. Argus has a “buy” rating and $1,250 price target for ASML stock, which closed at $752.79 on Sept. 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. Adobe recently clarified it will not train its AI models on users’ content after artists accused the company of selling AI imitations of their work. Bonner says investors can expect Adobe to continue to roll out generative AI features. Argus has a “buy” rating and $675 price target for ADBE stock, which closed at $563.41 on Sept. 6.
International Business Machines Corp. (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 June, IBM launched several new IBM watsonx AI assistant enhancements. Kelleher says strong generative AI and hybrid cloud solutions demand has helped offset a consulting business slowdown. AI infrastructure upgrades will continue to support IBM’s growth. Argus has a “buy” rating and $225 price target for IBM stock, which closed at $200.74 on Sept. 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 provide the processing power required for intensive AI workloads. Arista credited demand for networking gear from AI applications and cloud computing companies for its recent sales growth guidance that exceeded Wall Street’s expectations. Kelleher says Arista is uniquely positioned to provide the cloud-based data center networking equipment to support large language models delivered as a service. Argus has a “buy” rating and $390 price target for ANET stock, which closed at $314.31 on Sept. 6.
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Artificial Intelligence Stocks: The 10 Best AI Companies originally appeared on usnews.com
Update 09/09/24: This article was published at an earlier date and has been updated with new information.
