What are some hot AI stocks that are worth a look? Artificial Intelligence is a hot trend, and companies worldwide are jumping aboard. Services such as ChatGPT and other similar ones are creating an arms race in the tech industry. Robotics and automation are becoming more prevalent across multiple businesses. So, how can an investor profit from this emerging technology? Here is a look at a few companies worth considering.
The AI World
AI includes things like cloud services, robotics, and computer hardware. AI is a growth industry, so companies at the forefront have the potential to yield high returns to investors. Here are a few companies to research.
Lam Research
Lam Research (LRCX) is a manufacturer of semiconductor equipment used in the fabrication of integrated circuits. Its products and services are used in mobile phones, personal computers, servers, and automobiles. Lam stands to benefit from future AI races, as its technology is crucial in manufacturing advanced memory and chip design.
As chip technology approaches physical limits, vertical stacking becomes critical to further advancements in memory and processing power. Lam excels at this vertical stacking technology. They estimate that demand for this method of packing more and more processing into smaller spaces will increase by up to 30%.
With the stock off its highs and trading at a little over 13 times earnings, there is room for growth. Lam even pays a dividend and will yield you around 1.5% while you wait for the share price to rise.
Adobe
Adobe (ADBE) is a software company offering various products and services that businesses and individuals use. Its flagship product, Creative Cloud, is a software suite sold via a subscription.
Last year, Adobe announced advancements in its AI and learning capabilities. These new algorithms can help businesses understand and predict customer trends and habits better.
Trading at 37 times earnings with a share price in the mid-range of its 52-week average, this stock has room for growth as businesses strive to understand its customers better.
Global X Robotics & Artificial Intelligence
BOTZ isn’t a company. It is an ETF that invests in companies involved in robotics and automation in the U.S., Japan, and Europe. It also has sizeable holdings in the industrial and healthcare sectors. The fund seeks to reap the benefits from these advancements in this fast-paced industry by investing in companies at the forefront of AI and automation.
BOTZ has three main sectors that it focuses on. Technology, Industrial, and Healthcare. This provides a level of diversification and the possibility of gains in the latter two from their reliance on AI.
There are threats to be aware of. High inflation and a possible recession could dampen demand for emerging technology as startups fail and more established businesses scale back spending.
Conclusion
What are some hot AI stocks that are worth a look? Countless companies are developing AI and new computing technologies. The proceeding was just a small sampling of what is out there. A more extensive list can be found here. As always, do your research before investing in anything.
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Writer and Investor. Based in the Pittsburgh, PA area, Brian holds full-time employment as a Warehouse Manager for an electronics firm. Brian enjoys wealth building, investing, gardening and the great outdoors. Brian holds a B.A. in Environmental Studies from the University of Pittsburgh and an MBA from Robert Morris University.