With businesses and countries across the world elevating artificial intelligence (AI) to enjoy higher revenue and growth, investors are also on the lookout for AI stocks that have massive upside potential. Self-driving cars, robotics, gaming or machine learning, you name it and AI is present there. It has become a part of every industry and is only going to expand in the coming years. If you look at the potential of AI, we are just scratching the surface right now. According to PWC, AI can contribute $15.7 trillion to the economy by 2030. The report also states that the greatest economic gains from AI will be in China, followed by North America.
While AI is everywhere, not every company that invests in it is set to benefit. If you are thinking of investing in AI, you need to keep in mind that there are only a few companies that offer solid growth opportunities and have a positive long-term outlook. Here are three AI stocks to buy for getting rich in 2023.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA), an extremely powerful company, is leading the AI race and is at the forefront with its powerful technology. While the stock might look expensive right now, with Nvidia, you will get what you pay for. It is trading at $474 today and is up over 200% since the beginning of the year. One of the high potential AI stocks, NVDA stock started the year at $143 and has now hit $474, making several investors rich.
The company is growing at a ridiculously rapid pace and reported a revenue of $7 billion in the first quarter. It has invested heavily into AI and with the rising demand of its chip powered applications, Nvidia is going to see higher growth in the next few years. The company isn’t at the top today but is on the road to massive success. There was a point of time when gaming was the biggest source of revenue for the company. It then moved toward the data center and despite a drop in gaming revenue, the company continues to see steady growth in the data center segment. It produced a revenue of $4.28 billion while the gaming segment produced $2.24 billion.
With the increase of generative AI applications, the demand for graphics processing units (GPUs) is on the rise – and Nvidia has the power to increase the prices as well. The company recently invested $50 million in Recursion, which led to the recent stock rally. It is a company that specializes in accelerated computing and this investment will allow it to work on AI models of Chemistry and Biology. Currently, it is difficult to dethrone Nvidia, and if you are looking for AI stocks to invest in this year, buy NVDA.
Microsoft (MSFT)
There is nobody unaware of Microsoft (NASDAQ:MSFT) and its products. It has become difficult to run a business without using at least one of Microsoft’s products. If you are considering tech industry investing, Microsoft is the one to pick. The numbers are proof of how well Microsoft is doing. It reported a revenue of $52.9 billion and a net income of 18.3 billion, both better than the same quarter the previous year. Already an early investor in AI, the company’s Intelligent Cloud Segment shined through and brought in $22.1 billion in revenue.
Besides the investment in OpenAI, Microsoft is also developing its own AI chip named Athena. This chip will have the ability to power the technology behind AI chatbots. By producing chips, the company will be able to save money that goes into buying chips from other vendors. If the chips perform well, it will put Microsoft into direct competition with Nvidia.
MSFT stock is not cheap – it is exchanging hands at $359 today and is already up 50% year to date. Despite being expensive, the future of this stock looks bright. It has generated over 200% returns in the past five years. The stock surged after the company announced that it will charge $30 a month for its generative AI features. This fee will boost the company’s revenue in the near-term. In a recent memo, the company stated that it plans to grow its revenue by at least 10% through 2030 and this means it will be able to generate over $500 billion in revenue by the end of this decade. If it hits this target, we will see the stock hit a new all-time high. Microsoft is set to announce results next week and the stock could move higher then.
Advanced Micro Devices (AMD)
It is not possible to talk about AI stocks without mentioning Advanced Micro Devices (NASDAQ:AMD). The company is a direct competitor of Nvidia and is here to challenge its dominance. If you think NVDA stock is too expensive, consider investing in AMD stock because it has the potential to reach the same highs. The company is already succeeding with its chips and its recently revealed MI300 is here to change the way cloud data centers run AI applications. The performance of this chip drew Amazon’s (NASDAQ:AMZN) attention – and they could be using it for Amazon Web Services very soon. This could give a huge boost to the stock.
Another reason to bet on AMD is its diversified business model. The company has revenue flowing in from multiple streams and it could also use AI for gaming, potentially transforming the gaming experience of every user. AMD stock is trading at $117 today and is up 84% year to date. The company has strong financials and it reported a quarterly revenue of $5.4 billion – a 9% year-over-year drop; however, I believe this loss is only temporary. It will be interesting to see the second-quarter results from the company. AMD has all it takes to inch closer to Nvidia and has a solid leadership that can make it happen, too. It isn’t too far behind and if you want to get rich, AMD stock is definitely one to own.
On the date of publication, Vandita Jadeja did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.