These three stocks are quite affordable right now.
In recent years, artificial intelligence (AI) stocks have offered a compelling opportunity for investors. This technology aims to enhance business efficiency, save costs, and spur innovation, and we’re beginning to see the benefits. Companies that develop AI tools and platforms are already reaping significant revenue, and this trend is expected to continue as demand for these services grows.
If you’re interested in long-term growth from the AI sector, diving into AI stocks can be a smart move. I’m referring to established tech companies with a solid history that precedes the AI boom, positioned to leverage this innovative technology. Here are three that you might consider buying today.
1. Amazon
Amazon is a name most of us recognize, mainly due to its vast e-commerce presence. Over the years, it’s built a strong competitive edge, notably through its delivery network and Prime membership. Investors can generally count on steady growth from this company.
Additionally, Amazon Web Services (AWS), which was already boosting Amazon’s profits prior to the AI surge, is entering a transformative period. AWS provides a variety of AI products and services, recently generating a whopping $132 billion in revenue. As the AI landscape evolves—think self-driving cars and robotics—AWS is likely to benefit further.
Currently, Amazon’s stock is priced at 29 times forward earnings, which seems quite reasonable given the company’s strength and future potential in the AI sector.
2. Apple
Apple isn’t the most prominent player in the AI space right now. The company is focused on developing its AI platform and is gradually implementing this technology into its devices. This somewhat late entry could be a risky move. Investors might consider reallocating profits from earlier AI winners to Apple, which has the potential for future growth.
This year, Apple plans to launch an upgraded version of its AI-driven virtual assistant, Siri, which could positively impact its stock prices. The company has proven its brand strength by consistently generating revenue growth and retaining customers through its latest device offerings.
Apple stock currently trades at 30 times forward earnings estimates, a fairly reasonable valuation that could make it appealing as a new AI stock to consider.
3. Microsoft
The tech giant Microsoft has been a key player in the AI narrative for several years. It’s a major investor in OpenAI and collaborates with various AI initiatives. Microsoft’s Azure cloud services, similar to AWS, offer a wide range of AI products and services for its customers.
The company reported increased AI revenue in its latest quarter and emphasized its commitment to investing in infrastructure and personnel to seize upcoming opportunities. Revenue from Azure and other cloud services grew by 40% in just three months.
With notable demand for AI products across the sector, optimism about Microsoft’s momentum is warranted. The company’s next earnings report on January 28th could significantly influence its stock prices.
Currently, trading at 26 times forward earnings estimates, Microsoft is seen as an affordable investment that one could hold through the unfolding AI boom.
