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 Nov. 8 Close |
| Microsoft Corp. (ticker: MSFT) | 24.5% |
| Nvidia Corp. (NVDA) | 1.6% |
| Alphabet Inc. (GOOGL) | 12.1% |
| Amazon.com Inc. (AMZN) | 10.5% |
| Meta Platforms Inc. (META) | 12.0% |
| Taiwan Semiconductor Manufacturing Co. Ltd. (TSM) | 19.3% |
| ASML Holding NV (ASML) | 86.7% |
| Adobe Inc. (ADBE) | 36.5% |
| International Business Machines Corp. (IBM) | 21.7% |
| Arista Networks Inc. (ANET) | 12.4% |
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. In October, Microsoft announced new Copilot AI features that allow users to build their own autonomous agents created for a specific purpose using low-code or no-code instructions. Analyst Joseph Bonner says Microsoft is ramping its AI exposure via both internal development programs and outside investments in AI startups, including AI infrastructure startup CoreWeave. Argus has a “buy” rating and $526 price target for MSFT stock, which closed at $422.54 on Nov. 8.
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. In an October interview, Nvidia CEO Jensen Huang said demand for the company’s next-generation AI chip Blackwell is “insane.” Analyst Jim Kelleher says Nvidia is positioned for long term growth beyond data center and AI demand, including demand from end-markets such as professional visualization, gaming and AVs. Argus has a “buy” rating and $150 price target for NVDA stock, which closed at $147.63 on Nov. 8.
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 announced Gemini, its most capable general AI model ever. Google is even developing AI technology that can take over a web browser and complete tasks such as shopping and research. Bonner says Alphabet is making massive investments in Gemini and sees generative AI as a key technological shift. Argus has a “buy” rating and $200 price target for GOOGL stock, which closed at $178.35 on Nov. 8.
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 September, Amazon introduced Amelia, an AI tool designed to help third-party sellers quickly resolve account issues and gather inventory and sales data. Kelleher says the global push for generative AI technology has energized Amazon’s AWS business and boosted margins. Argus has a “buy” rating and $230 price target for AMZN stock, which closed at $208.18 on Nov. 8.
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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. In October, Meta released a batch of new AI models, including a “Self-Taught Evaluator” that can be used to evaluate AI models. Bonner says generative AI will optimize Meta’s performance and efficiency. Argus has a “buy” rating and $660 price target for META stock, which closed at $589.34 on Nov. 8.
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 generative AI demand was largely responsible for Taiwan Semi’s double-digit revenue and earnings growth in the third quarter. As AI becomes mainstream in coming years, Kelleher says it will be one of several large growth catalysts for the stock, including a rebound in electronic device demand. Argus has a “buy” rating and $240 price target for TSM stock, which closed at $201.20 on Nov. 8.
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. (KRX: 005930) 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 is bullish on ASML’s generative AI outlook. Argus has a “buy” rating and $1,250 price target for ASML stock, which closed at $669.47 on Nov. 8.
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 launched its Adobe Firefly Video Model, a creative generative AI model currently in limited public beta testing. Bonner says Adobe is leveraging AI innovations across its entire product stack and will continue to integrate additional features. Argus has a “buy” rating and $675 price target for ADBE stock, which closed at $494.68 on Nov. 8.
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 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 generative AI solutions demand is improving IBM’s enterprise software business. Argus has a “buy” rating and $260 price target for IBM stock, which closed at $213.72 on Nov. 8.
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 Arista will be a central player in supporting the networking growth required by the emerging AI delivery via cloud market. Argus has a “buy” rating and $450 price target for ANET stock, which closed at $400.45 on Nov. 8.
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Artificial Intelligence Stocks: The 10 Best AI Companies originally appeared on usnews.com
Update 11/11/24: This story was previously published at an earlier date and has been updated with new information.
