In today's rapidly evolving technological landscape, investing in artificial intelligence (AI) stocks has become an attractive option for many. With the continuous advancements in artificial intelligence, there is a broader range of AI companies to invest in than ever before. Many have emerged as promising investment opportunities, catching both investor attention and the media wave.
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This article will provide an overview of the best AI stocks to invest in globally, along with some listed in specific regions. As global tech hubs and areas we are seeing really strong interest, we have added some of the best AI shares in Australia (ASX Listed) alongside the top UK AI stocks listed on the London Stock Exchange.
The Best AI Stocks
| Ticker | Company | Year-to-date Performance (as of March 11, 2024) |
|---|---|---|
| NVDA | Nvidia | +74.2% |
| AMD | AMD | +37.5% |
| MSFT | Microsoft | +8.2% |
Best LSE AI stocks
| Ticker | Company | Year-to-date Performance (as of March 11, 2024) |
|---|---|---|
| LSEG | London Stock Exchange | +0.22% |
| AWE | Alphawave IP | +39.4% |
| PCT | Polar Capital Technology Trust | +38.1% |
Best ASX AI Stocks
| Ticker | Company | Year-to-date Performance (as of March 11, 2024) |
|---|---|---|
| WTC | WiseTech Global | +25.9% |
| XRO | Xero | +19.1% |
| NXT | NextDC | +25.6% |
Best AI Stocks List
Nvidia
NVIDIA is a semiconductor chip company with data-center-scale offerings that are reshaping the industry. The company invented the GPU in 1999, sparking the growth of the PC gaming market, redefined computer graphics, and ignited the era of modern AI. Nvidia's much sought-after chips are able to perform complex AI tasks, processing massive amounts of data to train generative AI programs.
The soaring demand for Nvidia's chips has resulted in its share price surging.
NVIDIA Stock Price Chart
Advanced Micro Devices (AMD)
Like Nvidia, AMD is a semiconductor company that develops computer processors and related technologies for business and consumer markets. The company develops high-performance computing and graphics solutions, including CPUs and GPUs used for AI workloads, making it an essential player in the AI hardware market.
AMD Stock Price Chart
Microsoft
Tech powerhouse Microsoft develops, licenses, and sells computer software, consumer electronics, and personal computers. However, it has also made strides in artificial intelligence. While it confirmed at the end of 2023 that it does not have a stake in AI giant and ChatGPT creator OpenAI, Microsoft said its partnership with the company means it “is simply entitled to share of profit distributions.”
Meanwhile, AI is used across various Microsoft products, including Azure, Windows, Xbox, Bing, Microsoft 365, Teams, Azure AI, Power Platform, Dynamics 365, and Microsoft Defender.
Microsoft Stock Price Chart
London Stock Exchange Group
London Stock Exchange Group provides financial markets infrastructure and delivers financial data, analytics, news and index products. It has more than 40,000 customers in over 170 countries. However, the company has also entered the artificial intelligence space. At the end of 2022, the company announced a strategic 10-year partnership with Microsoft to advance next-generation data and analytics, along with cloud infrastructure solutions for the financial markets.
London Stock Exchange Group Price Chart
Alphawave IP
Alphawave IP Group, also known as Alphawave Semi (AWE), is a company with direct AI exposure. It operates in the realm of high-speed connectivity solutions, particularly for data infrastructure. In a recent trading update, the company announced record quarterly bookings, with the momentum “driven by the leading hyperscalers and AI companies in North America.”
The company's customers include leading semiconductor device companies, as well as data center module makers and hyperscalers. In its update, the company noted that generative AI has “fundamentally transformed” data centre compute and connectivity by “creating a surge in demand for compute, memory bandwidth, I/O speeds, and energy efficiency.”
Alphawave IP Price Chart
Polar Capital Technology Trust
Polar Capital Technology Trust (PCT)is a tech-focused investment trust that has significant exposure to AI names via its portfolio. At the time of writing, PCT's top five holdings are Microsoft, Nvidia, Apple, Alphabet (Google) and AMD. There are, of course, other AI chip names in the portfolio, including ASML, Meta Platforms and Amazon. The company's portfolio provides investors with wide-ranging exposure to the AI industry.
Polar Capital Technology Trust Price Chart
WiseTech Global
ASX-listed WiseTech Global offers cloud-based software for logistics in 173 countries. The company's CargoWise platforms are built with workflows, automation, and robotics in mind.
WiseTech has expanded significantly in recent years, which has resulted in it making several acquisitions. In late 2022, the company acquired data entry automation software provider for the logistics industry, Shipamax. Shipamax's platform utilises AI and machine learning to automate entire operational workflows, including data extraction.
WiseTech Global Stock Price Chart
Xero
Xero provides cloud-based accounting and scheduling software for small and medium-sized businesses. The New Zealand-based technology company has more than 3 million subscribers worldwide, and over the last few years, it has invested in AI technology.
For example, in 2021, the company added new bank reconciliation predictions to its accounting platform. Furthermore, it also launched Analytics Plus, an AI-powered suite of planning and forecasting services.
The company has gone on to sign a deal to take its AI-powered bank reconciliation technology to more territories, while last year, it introduced new AI-powered features to its learning and support portal.
Xero Stock Price Chart
NextDC
NextDC is an ASX 100-listed data centre operator. The company is not a pure AI play, but it provides crucial data center infrastructure for AI technologies, with a nationwide network of Tier III and Tier IV facilities in the Australian market.
The company is actively involved in AI via its partnership with La Trobe CDAC, sponsoring PhD students to work on AI and machine learning projects aimed at enhancing the performance of their interconnection network. NextDC's CEO, Craig Scroggie, has previously discussed the significant opportunities in AI and the company's investment in an AI-fuelled future, highlighting the focus on harnessing its potential.
NextDC Stock Price Chart
How are Australian AI Companies on the ASX Performing?
The performance of Australian AI companies on the ASX is mixed, with the performance of companies operating in different aspects of the AI market differing.
For example, BrainChip (BRN), a neuromorphic chip technology company, is gaining traction for its efficiency and security features, leading to positive stock performance, pushing the stock more than 111% higher so far this year. On the other hand, Bigtincan Holdings (BTH), which has an AI-powered sales platform, is down more than 13% in 2024.
How Are UK AI Stocks Performing?
In a similar vein, UK AI stocks have also had a mixed performance. While not an AI pure-play, Scottish Mortgage Trust, which invests in companies across the Artificial Intelligence (AI) spectrum, is down around 3% this year. Meanwhile, Alphawave has jumped almost 40% in 2024, benefitting from this year's AI rally.
How to Buy AI Stocks
Conduct Thorough Research: When conducting research, make sure to identify your investment goals (long-term growth, short-term gains, or a balance of both), research individual AI companies (assess their financials, business models, the market landscape, and future prospects), and read industry news (understand AI trends, assess market forecasts, and take on board expert opinions).
Choose a Reputable Broker: To buy AI stocks or stocks of any kind, you'll need to open an account with a reputable stock brokerage firm. Firstly, make sure the broker is regulated in your region. Then look at factors such as the range of stocks offered, research tools and educational resources, and whether it has a user-friendly trading platform. Furthermore, make sure to assess trading fees, account minimums, and customer service.
Fund Your Account: Once you haveopened a brokerage account, you will need to add funds in order to buy AI stocks. Most brokers offer a variety of funding methods, such as bank transfers or wire transfers.
Execute Your Trade(s): Now you have an account that is funded, you can navigate to the broker's platform (if you aren't on it already), locate your chosen AI stock, input the order details, and hit submit or buy to place the order (make sure to double-check the details first).
Why Invest In AI Stocks?
The momentum in AI stocks across the board is hard to ignore, and looking at the share price of companies such as Nvidia and Super Micro Computer Inc (up 285% this year, as of March 11, 2024) provides an extremely attractive case to buy artificial intelligence stocks. Essentially, analysts, investors, and companies see the AI use cases expanding, resulting in higher demand and allowing them to grow revenue and profits while also potentially cutting costs over the long term.
If that is the case, then demand for the AI picks and shovels stocks will also rise, again providing a compelling case to invest in the sector. However, it is important to remember that its never that straightforward, and it is vital you research each individual company thoroughly before deciding to invest. Nothing goes up forever, and there is the risk that the valuation of the stock you want to invest in is stretched. Research and risk management is key.
Types of AI Companies to Invest in
Investing in AI stocks offers exposure to a wide range of companies involved in the different aspects of the AI ecosystem, such as development, deployment, and utilisation. When considering AI investments, it's important to understand the different types of AI companies available for investment. Here are some categories of AI companies to consider:
Chip Manufacturers and Hardware Providers
Chip manufacturers and hardware providers play a crucial role in the AI ecosystem, which is why the share price of stocks such as Nvidia has soared. These companies supply essential components and infrastructure needed to power AI systems, such as semiconductor chips and graphic processing units (GPUs). These stocks are also known as the AI “picks and shovel” stocks.
AI Service Providers
AI service providers and solution integrators offer AI-based products and services to businesses across various industries. For example, companies such as Amazon,Microsoft and Google provide AI services to business customers. Companies in this space may specialize in offering AI-powered analytics, automation, and decision-making solutions.
AI-Enabled Industry Disruptors
Another set of companies in the AI ecosystem are businesses leveraging AI to disrupt traditional industries. These companies can be found across sectors such as healthcare, finance, transportation, and manufacturing, where AI is transforming business models and creating new opportunities for growth and efficiency.
Large Language Models (LLMs)
LLMs, or Large Language Models, are advanced computer programs that can understand and generate human-like text. Companies in this space aren't necessarily single entities that solely focus on LLMs themselves, as the LLM landscape is quite broad. Big technology firms such as Google build them. For example, OpenAI’s large language models, including the ones powering ChatGPT, are created using information that is publicly available on the internet, information the company licenses from third parties, and information its users or human trainers provide.
Meanwhile. some companies in the LLM space will provide the infrastructure to run them, while others focus on building applications with pre-existing LLMs. Cloud giants offer the computing power to make it happen.
