10 Best AI Stocks to Buy for Q3 2024

By:

Crispus Nyaga

Crispus is a Financial Analyst for Invezz covering the stock, cryptocurrency and forex markets. He’s an experienced analyst with more than 8 years of industry experience.... read more.

 & 

James Knight

James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.

Updated: Jul 4, 2024

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This page covers the best artificial intelligence and machine learning companies in the world. Our experts have combed through all the options on the market and picked out the best stocks so you don’t have to.

What are the top AI stocks to buy?

Here are the best five AI companies to buy, according to our expert analysis. The most up-to-date price information for every stock is available if you follow the links in the table below. Alternatively, scroll down to find a more detailed explanation of why each has been chosen.

1. Nvidia

• Market Cap: $3 Trillion.
• 1-Year Performance: 212%
• 5-Year Performance: 3,366

Nvidia is the best AI stock to buy in 2024. The company has become a $2.8 trillion juggernaut because of the strong demand for its Graphic Processing Units (GPUs). These GPUs are used by most AI companies in their data centers. Firms like Microsoft, Apple, Tesla, Amazon, and Google have all ordered vast amounts of Nvidia’s GPUs.

As a result, its first quarter revenue jumped by more than 200% to over $24 billion, a figure that was higher than the $21 billion it made in 2019. Nvidia has also invested in numerous companies in the artificial intelligence industry like SoundHound, CoreWeave, Cohere, and Arm Holdings.

Additionally, Nvidia has a role to play in more industries of the future like machine learning, quantum computing, and autonomous vehicles. 

2. Palantir Technologies (NYSE: PLTR)

• Market Cap: $51.1 billion
• 1-Year Performance: 50%
• 5-Year Performance: N/A

Palantir uses AI software to analyse data. Founded in 2003, it’s a company that often works with government agencies like the CIA and the US Department of Defence to help them train generative AI algorithms with large data sets.

The company has only been public since late 2020 but its stock price has doubled. Because of how it operates in the background and who it works with, it’s not well known amongst the wider population. However, it has begun expanding its customer base to include clients in the financial and healthcare sectors.

Alongside growing the base, Palantir’s revenues have also been on the up and up. It operates in a niche area and offers data services to companies that don’t have the funding or the expertise to create it themselves. That puts it in a great spot to keep making money and means there’s an opportunity for investors to get in on the ground floor. 

3. C3.ai (NYSE: AI)

• Market Cap: $3.78 billion.
• 1-Year Performance: -13.48%
• 5-Year Performance: N/A

C3.ai is a software company that specialises in business solutions. It uses artificial intelligence to create more efficient business practices, such as streamlining supply chains and improving reliability. First set up in 2009, C3 is another young company in stock market terms, having only been public since the end of 2020.

That time on the public markets has been quite rocky. C3’s stock price fluctuated between highs of $150 a share and lows of $50 over just a few months. Those results, however, bear little resemblance to the company’s performance, which has continued to be good.

While the stock price has been jumping around, the company reported positive financial results. It has increased its revenue, particularly from subscriptions which is a good indicator of long term success and added new partnerships in Asia. Like Palantir, it could be a good time to invest in C3.ai before the rest of the market catches up.

4. Salesforce (NYSE: CRM)

• Market Cap: $229 billion
• 1-Year Performance: 12.7%
• 5-Year Performance: 50%

Salesforce is a cloud software company. Set up in 1999, its range of software is focused on customer service and marketing, and it’s best known for its leading customer relationship management (CRM) platform.

Like many cloud-based services, Salesforce did well out of the lockdown as more people were forced to work from home. Having performed well for a while, its stock price went up a further 30% in the aftermath of the pandemic. 

Salesforce has teamed up with Amazon to use machine learning to improve the former’s CRM software. It also now part-owns Figure Eight, a company that uses AI to improve customer support and online search results. Both developments indicate Salesforce’s forward-thinking nature and put it in a great place to keep growing in the future.

5. Advanced Micro Devices (NASDAQ: AMD)

• Market Cap: $268 billion
• 1-Year Performance: 41%
• 5-Year Performance: 506%

AMD is a semiconductor company that develops computer chips. It’s much older than the other companies on this list, having been formed all the way back in 1969. It traditionally lagged behind big names in the semiconductor industry, such as Intel, but that has changed in recent times.

The company broke through in a big way in 2019 and the stock has been on a dramatic upward trajectory ever since. It has increased by more than 500%, thanks to a convergence of the company producing higher quality chips with much more demand for things like graphics cards.

Along with the rest of its chips, AMD has a range of deep learning servers that use artificial intelligence to remove the bottlenecks that often affect regular data centres. New technology like this means AMD is set to capitalise on its big boost in popularity over the last couple of years and transform that into long term success.

6. DocuSign (NASDAQ: DOCU)

• Market Cap: $10.96 billion
• 1-Year Performance: -6.5%
• 5-Year Performance: -4.8%

DocuSign is a software company that specialises in e-signatures. Formed in 2003 and a public company since 2017, DocuSign offers technology that lets people sign important documents digitally, from any device.

More than most, DocuSign did well out of the pandemic. With businesses forced to move most of their operations online, the need for people to sign for things online became acute. Its stock price increased by more than 200% as lockdowns took hold all over the world.

Along with its basic signature offerings, DocuSign has a much more advanced document-checking package that uses AI to scour important files for mistakes. That offers the company the opportunity to monetise a genuine enterprise-level solution that can help it make the next step in its journey.

7. Google. (NASDAQ:GOOG)

• Market Cap: $2.1 Trillion
• 1-Year Performance: 41%
• 5-Year Performance: 220%

Google is a leader in artificial intelligence research and applications. The tech giant leverages AI across its services, including search, online advertising, and self-driving cars. Alphabet. Google’s parent company also offers extensive AI tools through its Google Cloud computing platform, allowing businesses to integrate AI capabilities.

Google’s sheer size as a business means it has a head start compared to smaller AI companies. It has massive datasets, engineering talent, and computing infrastructure to develop predictive analytics, natural language processing, and other AI technologies.

Alphabet has invested heavily in large language models like BERT and speech recognition for Google Assistant. The company’s AI research subsidiaries, like DeepMind, excel in areas like generative AI. Given its proven track record of applying AI to enhance existing products while exploring new domains, Alphabet looks set to benefit from the tremendous growth potential in artificial intelligence technology and applications in the coming decade.

8. Meta Platforms (NASDAQ: META)

• Market Cap: $1.26 Trillion
• 1-Year Performance: 50%
• 5-Year Performance: 179%

Formally known as Facebook, Meta Platforms utilises artificial intelligence across social media and advertising platforms. AI powers several features on Metas platforms, such as personalised recommendations and content moderation. It is also investing billions into developing next generation AI systems for its metaverse.

The company is researching major advances in natural language processing and computer vision to enable more immersive social experiences. With access to tonnes of user data and developers, Meta has the resources to push AI technology forward.

Initiatives like Project CAIRaoke aim to develop human-level AI assistants. Meta may have some near term issues to resolve, but, its long-term potential looks extremely promising, especially in AI research. The company has the scale, ambition, and commitment to remain a leader in applying artificial intelligence breakthroughs to connect people in new ways.

9. SoundHound (NASDAQ: SOUN)

• Market Cap: $1.6 billion.
• 1-year Performance: 71%
• 5-year Performance: -42%

SoundHound is another top AI stock to invest in. it is a leading company that aims to disrupt key industries using artificial intelligence and voice. For example, instead of having restaurant workers handle some repetitive tasks like ordering, they can replace them with SoundHound’s voice recognition software. 

The company is also seeking to disrupt other industries like automotive, customer service, and the hospitality industry. This is a big industry that analysts expect will be worth billions of dollars in the future. This also explains why Nvidia has invested in the company. 

10. Microsoft (NASDAQ: MSFT)

• Market Cap: $3.15 trillion.
• 1-Year Performance: 27%
• 5-Year Performance: 256%

Microsoft is one of the world’s largest tech giants and is making multibillion-dollar investments in artificial intelligence. It has already made several acquisitions, hired thousands of AI researchers, and integrated AI throughout its software and cloud computing services. The company also uses machine learning in its products like Office, Dynamics, Xbox, and LinkedIn to boost productivity and analytics.

Microsoft’s Azure cloud computing platform provides AI APIs, tools, and infrastructure to customers. Microsoft’s search engine, Bing, now utilises large language models like Prometheus. With massive growth in its cloud business, Microsoft has the resources and computing power to drive AI innovation. Partnerships with companies like OpenAI (ChatGPT) reflect Microsoft’s commitment to developing the next wave of generative AI.

Microsoft also produces AI chips to optimise performance. Under CEO Satya Nadella, Microsoft aims to be at the forefront of enterprise AI with the widespread adoption of natural language processing, computer vision, robotics automation, and more. For investors seeking broad exposure to the AI boom, Microsoft is a top AI stock pick.

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What is an AI stock?

Any company that incorporates artificial intelligence or machine learning software in the product or service they offer. AI is relatively new but these companies operate across a whole range of industries, from futuristic cloud software to enhancing the supply chains of traditional, old-school companies.

Are artificial intelligence shares a good investment?

They can be, although they are more risky than other industries because they are relatively unproven. Owning an AI stock is a bet on the future and you should be prepared to hold it for a while – years, rather than months – if you expect the technology to become more mainstream over time.

As with many tech stocks, AI companies are often volatile investments to hold. They might rise or fall dramatically over a short space of time as the industry is based on a lot of hype rather than real results at the moment. Keep your focus on the raw numbers: if the revenue and customer base keeps increasing, that’s a good sign if you’re in it for the long haul.

In an industry based on innovation and new technology, it’s more important than ever to keep track of the latest developments. New competition can spring up at any time and you want to be the first to know when it does. Use the links below to stay up to date with everything that happens in the AI sphere.

Risks of investing in AI stocks

There are two main risks to remember when investing in AI stocks. First, there is the issue of valuation since companies like Nvidia, AMD, and Docusign trade at extremely pricey valuations. This trend has created a bubble that could burst as we saw in the electric vehicle and cannabis industries. 

Second, it is unclear how companies will monetize artificial intelligence applications. For example, while Microsoft has launched the Copilot+, many companies have complained that the $30 per user per month price is very expensive.

Third, there is a risk that some companies are overpromising their AI credentials as we saw during the dot com bubble.

Methodology: How we chose the best AI stocks

At Invezz, our mission is to empower our readers with the most accurate and reliable financial information. Our curated selection of the best stocks in specific industries is designed to provide investors with well-researched, expertly reviewed stock recommendations. Our team follows a rigorous process to ensure our readers receive high-quality, trustworthy stock selections.

• Initial screening. Our team of experienced stock market analysts conducts an initial screening of stocks within the chosen industry. This involves analyzing a broad range of companies based on key financial metrics such as revenue growth, profitability, debt levels, and market capitalization.
• Earnings reports and financial analysis. Analysts review the latest earnings reports of shortlisted companies. This includes a detailed assessment of financial statements, looking for consistent earnings growth, strong balance sheets, and positive cash flow trends. Special attention is given to year-over-year performance and quarterly results.
• Sector analysis. A comprehensive sector analysis is conducted to understand the macroeconomic factors affecting the industry. This includes examining market trends, competitive landscape, regulatory changes, and technological advancements. Our analysts utilize industry reports, market research, and economic forecasts to gain a holistic view of the sector.
• Analyst recommendations. We consider recommendations from reputable sources such as Barron’s and Zacks. These sources provide expert opinions and ratings on stocks, which serve as an additional layer of validation for our selections. Incorporating external analyst recommendations ensures that our curated stocks are backed by a consensus of expert views.
• Internal review. After the initial selection by our analysts, the chosen stocks are reviewed by a sub-editor. The sub-editor ensures that the analysis is clear, concise, and adheres to Invezz’s editorial guidelines. This review process helps maintain the quality and readability of our content, making it accessible to a broad audience.
• Quarterly updates. To ensure our stock recommendations remain relevant and up-to-date, we update the curated section quarterly. Each update cycle involves re-evaluating the stocks based on the latest financial reports, industry developments, and market conditions. This regular update process ensures that our recommendations reflect the most current information available.

Our approach combines expert analysis, comprehensive research, and regular updates to deliver reliable and insightful investment recommendations. Read more about our review process and editorial policy.