Top AI Stocks to Watch in 2022
Artificial intelligence (AI) represents one of the most exciting and potentially lucrative industries to invest in for 2022. In fact, artificial intelligence stocks have the potential to be some of the best performing tech stocks of the next decade. Along with tech like the internet of things, 5G technology and more. Let’s look at them before dive into the AI stocks to watch.
What is AI?
Artificial intelligence is a technology that enables machines to complete tasks that generally require the type of natural intelligence possessed by humans. As a result, AI tech allows computers to analyze highly complex data. Gain insight from such data. And then use it to make predictions and optimize systems for performance.
AI isn’t just one technology. But instead, it’s a group of technologies that enable machines to mimic human thinking. Some of these technologies include Machine Learning (MI), Natural Language Processing (NLP), Predictive Analysis, Image Recognition, and Robotics.
The artificial intelligence market was valued at $23.94 billion in 2018. It is expected to grow to $208.49 billion by 2025. That’s a compound annual growth rate (CAGR) of 36.2%.
The technology is already promising to transform everything from automobiles to healthcare to online advertising. This creates a list of companies to watch that are leveraging AI for their own businesses. Here’s a list of some of our favorite AI stocks:
The Top AI Stocks to Watch for the Coming Year
1. Alphabet Inc. (Nasdaq: GOOG)
Sundar Pinchai, the CEO of Google, called the search engine gargantuan an “AI first” company repeatedly. And he isn’t kidding. Which is why Google is one of the very best AI stocks of all.
This tech giant made the most acquisitions in artificial intelligence technology of any of its competitors since 2012. They acquired twenty investments overall. Including a purchase of predictive analytics platform Kaggle. They also acquired the British DeepMind project.
Google uses the technology with Gmail, Maps, its cloud system, Photos and more. They are also poised to become a top player in autonomous vehicles, which rely heavily on AI.
Shares of Google have been climbing steadily and are currently trading around $2,370. They boast a robust PE ratio of about 21 and an EPS around $111.
2. Nvidia Corporation (Nasdaq: NVDA)
Nvidia, based in Santa Clara, CA, is a gaming technology company that has long been a leader in the AI space. But this AI stock to watch is now far from just a gaming company.
It’s graphics processing unit (GPU) chip technology powers much of the gaming industry but also cloud computing, big data and more. These GPU chips can process massive amounts of data.
In its own words, NVIDIA has evolved the GPU into, “a computer brain at the exciting intersection of virtual reality, high performance computing, and artificial intelligence.”
Like Google, NVIDIA stock has performed well recently but trades around a much more affordable $167 per share. However, this AI stock’s PE ratio is about 46 based on its earnings per share of $3.73.. .
3. Microsoft Corporation (Nasdaq: MSFT)
Bill Gates’s technology empire currently has around 8,000 employees working on AI products. And one of the products it’s working on is direct competition for both Google and NVIDIA: a new AI chip for the cloud.
These chips can make intelligent predictions based on complex data patterns and unlock key insights. Microsoft has used this technology to develop products across a variety of sectors and industries.
These include human language technologies, assistive robotics, medical imaging readers and the consumer-facing platform Cortana. Also, Microsoft CEO Satya Nadella seeks to democratize the AI landscape across even more industries such as education and manufacturing.
Such technology is special because it can do virtually anything that human intelligence can do. And is not limited to specialized niches of thought. Plus, the moneymaking power of such a project – if it is successful – is virtually infinite. Therefore, this makes this another one of the top AI stocks out there.
4. Amazon.com, Inc. (Nasdaq: AMZN)
If you’ve ever shopped at Amazon.com – and let’s be honest everyone has – you’ve seen their artificial intelligence program in action.
All those personalized product recommendations that have you reaching back into your wallet are created with intelligent technology. Everyone’s good friend Alexa also leverages AI.
But, Amazon’s use of the technology is not limited to their storied e-commerce platform. Amazon is also using partnerships with major players like JP Morgan and Berkshire Hathaway to deliver the technology to even more spaces like healthcare.
Amazon Web Services (AWS) is also a major profit engine for the tech giant making making significant use of computer brains. Powering the cloud computing services of AWS, Amazon’s technology offers everything from speech translation to facial recognition capabilities.
Other AI Stocks to Watch
Intel (Nasdaq: INTC)
Helping self-driving cars prevent collisions is one way this blue-chip semiconductor legend is playing the AI game. But it’s not the only way. In addition to its Mobileye division, Intel manufactures visual processing units that allow smart cameras to perform tasks such as facial recognition and counting crowds.
Also, Microsoft is leveraging Intel’s technology. And Intel’s field-programmable gate arrays run deep learning on Microsoft’s cloud. So, keep this in mind if you invest in both Intel and Microsoft at the same time as it opens you to more company exposure than you might have anticipated.
Twilio (NYSE: TWLO)
This AI stock to watch is a cloud software company whose Application Programming Interfaces (APIs) enable software developers to build various features into apps including messaging, voice, and video capabilities. Plus, this omnichannel customer engagement platform can be a fit for any size organization. So its field of potential business and enterprise customers is vast.
Tencent Holdings (OTC: TCEHY)
This Chinese firm is the country’s largest social media player. For example, it invented the omnipresent WeChat app. And recently invested in building a major AI lab in Seattle, Washington. The aim of the lab is to expand upon the company’s virtual assistant and voice-to-text product offerings.
Other capabilities offered by the company’s stake in AI include smart news aggregators, facial recognition tech and natural language processing devices. Tencent Holding is also investing intelligently in AI people. Stealing talent away from top rivals like Microsoft and Baidu.
Facebook, Inc. (Nasdaq: FB)
Mark Zuckerberg’s social media empire – love it or hate it – is deeply committed to developing machine learning technologies.
And using AI to detect and filter out hate speech and fake news is one of many abilities Facebook is pursuing to continuously improve its ever-popular platform. This means Facebook remains a key AI stock to watch moving forward.
Baidu, Inc. (Nasdaq: BIDU)
Baidu is, quite simply, the Google of China. And the search engine giant has made a heavy investment in artificial intelligence to help improve both their search engine results and the ads they serve up. But it’s also a major player in the self driving automobile market.
Match Group, Inc. (Nasdaq: MTCH)
In case you are still seeking an AI stock to swipe right on, Match Group is using artificial intelligence on its popular “casual” dating app Tinder.
Its “Super Likable” feature is powered by machine learning technology. So, if you want an alternative way to play AI stocks; make a hot date with your stockbroker and pick up some shares of Match.
Concluding Thoughts on These AI Stocks to Watch
These AI stocks are important to watch as we continue to move through 2022. This revolutionary technology is not going anywhere, so it might be time to consider investing. As always, do your own research and assess your risk tolerance before making investment decisions.
About Brian M. Reiser
Brian M. Reiser has a Bachelor of Science degree in Management with a concentration in finance from the School of Management at Binghamton University.
He also holds a B.A. in philosophy from Columbia University and an M.A. in philosophy from the University of South Florida.
His primary interests at Investment U include personal finance, debt, tech stocks and more.