2 Top AI Stocks Ready For A Bulls Run

Technology stocks have been eyeing it lately as some investors have left the sector in search of seemingly safer bets. But the mass exodus from tech stocks has left some companies — and those making big strides in… artificial intelligence — looks like a good buy now.

This is why Amazon AMZN 3.15% and Nvidia NVDA -4.20% are two technology stocks that are perfectly positioned in the AI ​​space.

A microchip with the letters

Image source: Getty Images.

1. Amazon

You might think of Amazon as an e-commerce company, but one of the driving forces behind the company’s online store is artificial intelligence.

AI is responsible for providing recommendations and rankings for the products on its platform and what deals it shows customers. The company also uses AI for its StyleSnap feature, which allows customers to snap a photo of the clothes they’re looking for and instantly find similar products for sale in-store.

But it’s not just online shopping that Amazon’s AI is used for. The company’s Amazon Go and Amazon Fresh supermarkets use real-world AI — along with sensors and cameras — to track what shoppers add to their cart and automatically bill customers when they walk out of the store. Amazon calls it “Just Walk Out” technology, and the company is licensing the technology to retailers — including Starbucks — since 2020.

And while all of this is impressive, perhaps the most practical way Amazon takes advantage of AI is through its Amazon Web Services (AWS) cloud computing service. AWS provides developers and businesses with a range of AI tools, including speech-to-text conversion, image and video analytics, chatbots, forecasting, fraud detection, and more.

AWS is the main driver of Amazon’s earnings, with the segment earning $6.5 billion in operating revenue in the most recent quarter, up 56% from the same quarter a year ago. AWS is not only highly profitable, but it is also the leading cloud infrastructure servicewith a market share of 33%.

And with cloud computing poised to grow into a $1.6 trillion market by 2030, Amazon’s market leadership and early focus on AI should help the company continue to capitalize on the rising demand for AI. .

2. Nvidia

Nvidia has long been a leader in the video game processor market for its powerful graphics semiconductors. But the company has increasingly expanded its chip capabilities to data center chips for AI.

Just a few months ago, the company introduced three new AI-specific chips that will help the company stay ahead of its competitors. New iterations of semiconductors are important to Nvidia as the company derives an increasing share of its revenue from its data center segment.

In the most recent quarter, data center revenue was $3.7 billion, up 83% from the same quarter a year ago. Those data center sales accounted for 45% of total revenue, compared to just 36% of total revenue in the same quarter last year.

Nvidia’s chips have been used in everything from AI servers towards self-driving vehicles, and there are only more opportunities ahead. Allied Research estimates that by 2030, the global AI chip market will be worth nearly $195 billion, up from just $8 billion in 2020.

With Nvidia already a leader in AI chips and moving further into this massive market, the company should be able to grow with the growing AI market.

Remember this

The stock market is very volatile at the moment and buying shares of these technology companies is not likely to yield immediate profits. But investors should remember that finding great companies that lead in their respective markets — and holding those stocks for at least five years — is one of the best ways to make long-term gains.

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