Artificial intelligence (AI) has been increasingly gaining attention from investors this year due to its extensive applications in various industries. One of the most notable generative AIs is OpenAI’s ChatGPT chatbot, which has gained significant adoption since its launch in November 2022, reaching over 100 million active users by January 2023. ChatGPT’s success has created a massive interest in developing large language models.
Many tech giants are using OpenAI’s models, like ChatGPT, including Microsoft, Meta Platforms, and Alphabet. In addition, many companies are developing their own generative AI services, such as IndexGPT from JPMorgan Chase and Google Bard from Alphabet. Despite the competition, the generative AI market is expanding, offering significant growth opportunities for specialized data providers, chipmakers, and server OEMs.
Here are five top-ranked AI stocks that are expected to benefit from the increasing demand for generative AI in the market:
1. NVIDIA (NVDA) – NVIDIA’s GPUs provide the computational power necessary for generative AI to thrive, and the company is applying its GPUs in AI models that expand its footprint in untapped markets like automotive, healthcare, and manufacturing. NVIDIA’s expanding partner base, including IBM, Microsoft, and Amazon, is also expanding its enterprise user base.
2. Meta Platforms – Meta Platforms has access to a vast amount of user data, making it a strong contender for generative AI dominance. The company is reportedly working on several AI tools, including a ChatGPT-like chatbot that will eventually be incorporated into Messenger and WhatsApp. Meta Platforms’s generative AI tools, once available, are expected to change the advertising market significantly.
3. ServiceNow (NOW) – ServiceNow recently launched generative AI capabilities that help deliver faster and more intelligent workflow automation. Strategic acquisitions related to generative AI with the likes of Microsoft Azure and NVIDIA also bode well for ServiceNow.
4. MongoDB (MDB) – MongoDB’s Atlas, a database-as-a-service, accounted for 65% of revenues in the first quarter of 2024. MongoDB is incorporating AI-related functionality into its database, which is expected to improve the software development process, making it more efficient, scalable, and automated.
5. Adobe (ADBE) – Adobe has aggressively expanded its footprint in the generative AI space through partnerships and new solutions. Through its partnership with NVIDIA, Adobe is developing advanced generative AI models that focus on deep integration into applications. Adobe has also expanded its offerings powered by Adobe Sensei GenAI, unveiling Generative Fill in Photoshop, bringing Adobe Firefly generative AI capabilities directly into design workflows.
These top-ranked AI stocks are poised to benefit from the expanding generative AI market and are expected to provide healthy returns for investors.
