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.
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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. Here are 10 of the best AI stocks to buy, according to Argus:
| Stock | Implied upside from Oct. 4 close |
| Microsoft Corp. (ticker: MSFT) | 26.4% |
| Nvidia Corp. (NVDA) | 20.1% |
| Alphabet Inc. (GOOGL) | 19.7% |
| Amazon.com Inc. (AMZN) | 9.9% |
| Meta Platforms Inc. (META) | 0.7% |
| Taiwan Semiconductor Manufacturing Co. Ltd. (TSM) | 10.4% |
| ASML Holding NV (ASML) | 50.1% |
| Adobe Inc. (ADBE) | 33.1% |
| International Business Machines Corp. (IBM) | -0.4% |
| Arista Networks Inc. (ANET) | -1.5% |
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. The company recently announced it will soon begin testing its controversial Recall AI
search feature that takes screenshots of user activity. Analyst Joseph Bonner says Microsoft is going all-in on AI, investing in both internal AI innovation and external AI startups. Bonner says demand for cloud AI services currently outpaces supply, and Microsoft is addressing that gap. Argus has a “buy” rating and $526 price target for MSFT stock, which closed at $416.06 on Oct. 4.
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 has 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 Nvidia. Analyst Jim Kelleher says Nvidia is dominating the high-growth AI graphics processing unit market. Argus has a “buy” rating and $150 price target for NVDA stock, which closed at $124.92 on Oct. 4.
Alphabet Inc. (GOOGL)
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 introduced 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 AI will supplement Alphabet’s search and advertising businesses. Argus has a “buy” rating and $200 price target for GOOGL stock, which closed at $167.06 on Oct. 4.
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 generative AI investments have reinvigorated AWS revenue growth and boosted margins. Argus has a “buy” rating and $205 price target for AMZN stock, which closed at $186.51 on Oct. 4.
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 has credited AI for improving user recommendations and boosting advertising efficacy on Meta’s platforms. Bonner says Zuckerberg has had success in building large user bases and then monetizing them over time. Argus has a “buy” rating and $600 price target for META stock, which closed at $595.94 on Oct. 4.
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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. Taiwan Semi CEO Hsu Ming-chi recently said the “booming of the AI industry has just begun.” Kelleher says more mainstream generative AI, a rebound in electronic device demand and lower inflation will help support Taiwan Semi’s sales growth. He says investors shouldn’t be concerned about additional U.S. restrictions on semiconductor exports and says Taiwan Semi’s current stock price offers investors an attractive entry point. Argus has a “buy” rating and $200 price target for TSM stock, which closed at $181.16 on Oct. 4.
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 are two of ASML’s largest customers. In August, semiconductor research firm Imec reported it successfully printed circuitry as small or smaller than the leading logic and memory chips currently in commercial production in only a single pass under ASML’s new “High NA” tool. Kelleher says ASML is a generative AI winner. Argus has a “buy” rating and $1,250 price target for ASML stock, which closed at $833 on Oct. 4.
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 announced it will launch a new AI-powered video creation and editing tool by the end of the year. Bonner says Adobe is innovating rapidly and will continue to roll out new AI features throughout its product set. Argus has a “buy” rating and $675 price target for ADBE stock, which closed at $507.22 on Oct. 4.
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. Mount Sinai Health System and IBM Research recently launched a research effort to leverage the power of AI technology to improve mental health care for young people. Kelleher says AI will play a central role in IBM’s future. Argus has a “buy” rating and $225 price target for IBM stock, which closed at $226 on Oct. 4.
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 announced significant new capabilities in its CloudVision platform, which uses generative AI techniques to provide faster problem resolution and ease network management. Kelleher says enterprise spending on generative AI is supporting demand for cloud-based data center networking capable of supporting large language models delivered as a service. Argus has a “buy” rating and $390 price target for ANET stock, which closed at $395.97 on Oct. 4.
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Artificial Intelligence Stocks: The 10 Best AI Companies originally appeared on usnews.com
Update 10/07/24: This story was previously published at an earlier date and has been updated with new information.
