Artificial intelligence has been a scorching hot investment trend during this bull market run.
And while some AI winners have slowed a bit this summer, investors and analysts remain bullish the long-term potential of this innovative nology.
AI stocks have been volatile lately, but volatility can also present opportunities to get stocks at a reasonable price. If you’re interested in in AI, here are seven stocks to watch this summer.
Quick Look at Best AI Stocks:TickerCompany±%PriceInvestMSFTMicrosoft1. 00Buy stockNVDANVIDIA1. 25Buy stockMETAMeta Platforms0. 41Buy stockNOWServiceNow3. 38Buy stockCLSCelestica3.
01Buy stockPANWPalo Alto Networks2. 30Buy stockTSMTaiwan Semiconductor0. 51Buy stockStart Your Free 14-Day Benzinga TrialTable of ContentsQuick Look at Best AI Stocks:Microsoft Corp.
(Nasdaq: MSFT)NVIDIA Corp. (Nasdaq: NVDA)See All 10 ItemsMicrosoft Corp. (Nasdaq: MSFT)Microsoft is heavily invested in artificial intelligence, spanning various applications and re.
A core focus is Azure AI, viding cloud-based AI services for es. Additionally, Microsoft incorporates AI into its ducts, Office 365, enhancing features with intelligent assistants and automation.
The company is also exploring natural language cessing, computer vision, and machine learning.
Beyond innovative nology, Microsoft emphasizes responsible AI, ensuring its developments align with ethical guidelines.
Notable jects in this area include AI for Good, which addresses global challenges climate change and hunger, and ject Alexandria, which creates a knowledge base for es using AI.
From a nical standpoint, MSFT s are trading near all-time highs but still have a reasonable 38. 4 P/E ratio and a Relative Strength Index (RSI) reading of 51, well below the overbought level.
NVIDIA Corp. (Nasdaq: NVDA)NVIDIA is one of the strongest AI stocks in the market, primarily thanks to its constantly in-demand GPUs.
These GPUs have the cessing power required for the most complex machine and deep learning algorithms, making them necessary tools for AI development.
The firm’s focus extends beyond hardware, offering software platforms and development kits to support AI reers.
NVIDIA’s work spans various AI applications, including self-driving cars, medical imaging, natural language cessing, and games.
The company’s re arm also explores the boundaries of AI, pushing the nology forward with jects in areas computer vision, robotics, and generative AI.
For now, NVIDIA is the computational backbone for much of the world's AI advancements.
The company’s stock has seen a transcendent rise over the last two years but has been rangebound since the 10-1 stock split announcement. However, the next earnings call is scheduled for Aug.
28, which could pel s out of the current range. Meta Platforms (Nasdaq: META)META has devoted significant resources to AI development in its social media platforms and the Metaverse.
Their AI re focuses on natural language cessing, computer vision, and machine learning to enhance user experiences.
This includes AI models for image recognition, content moderation, and personalized recommendations.
Much of the company’s AI efforts are directed toward building the Metaverse, a virtual reality universe.
This involves creating AI systems that understand and respond to human interactions within this digital environment.
Additionally, META is exploring AI for augmented reality applications, such as virtual assistants and smart glasses.
Other jects include the Llama 2 open-source large language model and Cicero, which claims to be the first AI to play the strategy game Diplomacy at a human level. ServiceNow Inc.
(NYSE: NOW)ServiceNow is primarily known for its cloud-based platform that helps es manage workflows and IT operations.
However, the company has also invested significantly in AI to enhance its platform and free up human clients for more complex tasks.
ServiceNow's AI strategy centers around intelligent automation, which involves using AI to line and automate various cesses.
Some areas where this focus is magnified include Natural Language cessing (NLP) to understand and respond to user queries, machine learning algorithms to analyze data and identify trends, and AI-powered virtual agents to handle routine (and mundane) tasks and inquiries.
Despite not being a household name Microsoft or Meta, ServiceNow is still a massive company with a $158 billion market cap and over $8 billion in annual revenue.
The company also has an upcoming catalyst when it reports earnings on July 24. Palo Alto Networks Inc.
(NYSE: PANW)Palo Alto Networks is a cybersecurity sector champion that heavily leverages AI to tect organizations from evolving online threats.
The company utilizes AI and machine learning algorithms to analyze vast amounts of security data, identifying malicious activity patterns.
This enables them to detect and prevent zero-day attacks, ransomware, and other sophisticated threats.
AI automates routine security tasks, such as incident response and threat hunting, freeing security teams to focus on more strategic initiatives.
As attackers increasingly use AI themselves, Palo Alto Networks is defenses Precision AI to counter these complex AI threats with other forms of AI and create a more resilient security infrastructure.
PANW s have receded from the all-time high reached in Q1 2024, but the company remains one of the top cybersecurity innovators, and its re into AI can only enhance its efficiency.
The stock’s P/E ratio is 48. 2, but the 57 RSI shows that s have yet to reach overbought territory. Taiwan Semiconductor Co.
(NYSE: TSM)If you want to make money during a gold rush, why not sell shovels to spectors. That’s the idea surrounding an investment thesis in Taiwan Semiconductor Co.
, which vides many of the other companies on this list with vital components needed for their AI cesses. AI models require immense computational power to train and operate.
This magnitude of power is derived from specialized chips, which enable them to cess vast amounts of data rapidly.
TSM is a key player in manufacturing these chips, and its advanced semiconductor fabrication operations allow for the duction of smaller, more powerful, and energy-efficient chips.
In other words, TSM's ability to duce leading-edge chips is a cornerstone of the AI revolution.
Without their advanced manufacturing capabilities, AI application development and deployment could be significantly hindered.
The firm drives innovation in semiconductor nology, which in turn fuels advancements in AI. Celestica Inc. (NYSE: CLS)Not all AI innovation happens in large-cap firms.
S of mid-cap electronics manufacturer Celestica Inc. Have more than doubled in the last year thanks to high demand for its components that underlie AI infrastructure.
But despite this rapid stock growth, the company still has a low P/E ratio of 21 and a market cap below $7 billion.
A significant portion of Celestica's AI-related work revolves around manufacturing network switches.
These high-performance switches are critical components in data centers, where AI models are trained and deployed.
The company's expertise in designing and ducing these switches is essential for building the infrastructure required for AI applications.
Furthermore, Celestica is actively involved in cutting-edge networking solutions specifically designed for AI and machine learning applications.
Their high-speed switches, for example, facilitate rapid data transfer within data centers, which is essential for training and deploying AI models. What Makes a Good AI Stock.
Picking the best stocks in any particular sector or industry is challenging, especially in volatile and evolving ones AI.
Getting your investments 100% right is a practical impossibility, but you can give yourself the best odds of success by ing specific rules and knowing what to look for.
Here are four key factors to re when selecting the best AI stocks.
Catalysts – A catalyst is some kind of news or event that gets a stock moving, an earnings release, duct launch, insider purchase, or upgrade/downgrade from a stock analyst.
Ject Pipeline – What types of AI jects does the company have on its radar. Do they duce components TSM or CLS, or are they training new models META or PANW.
Make sure your AI investments have a bright pipeline of future jects; otherwise, they could lag behind the ones that continue to expand and innovate.
Management Team – While reing the company, don’t neglect to re the executives and managers either. Are they attracting top talent. Do they have a history of success in similar industries.
Are there any skeletons in the closet that you should be aware of. Faulty leadership can sink even the most innovative companies.
Nical Signals – Finally, if you’re looking for stocks that are to make a big upward move, you’ll want to pay attention to nical trading signals and analysis, as well as fundamental data earnings growth and price ratios.
A breakout signal an RSI oversold reading or a cross over the 50-day moving average could trigger a move before any major news reaches the market.
Choosing the Right Brokerage for AI StocksWhen in AI stocks, you’ll want to choose a broker that has access to s and suits your style and investment goals.
Here’s a list of our favorite online brokerages and what type of investor they’re best suited for.
Claim Exclusive OffersInteractive Brokers ReviewBest For:Active and Global TradersVIEW S & CONS:Securely through Interactive Brokers’ websiteGet Started with Interactive BrokersPlus500 ReviewBest For:Leveraged TradingVIEW S & CONS:securely through Plus500 Yield's websiteGet Started with Plus500public.
Com ReviewBest For:Trading IdeasVIEW S & CONS:securely through public. Com's websiteGet Started with public.
ComRobinhood ReviewBest For:BeginnersVIEW S & CONS:securely through Robinhood's websiteGet Started with RobinhoodTradeZero ReviewBest For:Global Broker for Short SellingVIEW S & CONS:securely through TradeZero's websiteGet Started with TradeZero Dan SchmidtDan Schmidt is a finance writer passionate helping readers understand how assets and work.
He has over six years of writing experience, focused on stocks. His work has been published by Vanguard, Capital One, PenFed Credit Union, MarketBeat, and Fora Financial.
Dan s in Bucks County, PA with his wife and enjoys summers at Citizens Bank Park cheering on the Phillies.