AI stocks have taken off in 2023. So, naturally, many investors are curious to understand the technology’s various applications across a wide range of sectors. Artificial intelligence involves training computerized systems with huge amounts of data, through a process called machine learning. These systems can then make inferences about future outcomes, analogous to the natural intelligence displayed by humans.

Companies are leveraging AI to create new technologies that promise to reshape our world. Some AI applications will fail, while others will be game-changing. Thus, investing in this sector is an exciting proposition. It’s important for investors to separate the wheat from the chaff, and these are three top options I think should certainly be sorted in the highest-quality bucket for those considering AI stocks right now.

Microsoft (MSFT)

Microsoft (NASDAQ: MSFT) is worth investing in, for a wide range of reasons. However, many investors are now looking at this company based solely on its association with game-changing AI technology. Microsoft has been connected to OpenAI since 2019, when it began investing in the AI startup that has since released Chat GPT and DALL-E 2.

Then, Microsoft invested an additional $10 billion in OpenAI a few months ago. The move put Microsft in the driver’s seat among big tech firms as the first Silicon Valley firm to stake a claim in generative AI.

Microsoft has integrated ChatGPT into its Bing search engine. The hope is that ChatGPT can revitalize the company’s competitiveness in search and claw back some of Google’s market share.

This ChatGPT investment also gives Microsoft a first-mover advantage in AI integrations with cloud technology. The company is looking to leverage AI in its Azure cloud division, leading to potentially-lucrative applications. Further, it gives Microsft even more strength in its core software business. That’s because the company’s office products will become much more effective, automating certain mundane tasks, and improving users’ experience with the product.

Just how dystopian this all gets remains to be seen. However, MSFT stock is one to own for the long-term, in my view.

Nvidia (NVDA)

Nvidia (NASDAQ:NVDA) is another company has garnered a lot of attention around the emergence of AI. Its business touches on wide-ranging AI applications, from all-encompassing enterprise applications to more niche uses.

Among those uses, Nvidia is most promising for the intersection of AI and graphics, where it holds a leading market position in terms of high-performance graphics processing units (GPUs). Research related to the AI applications arising via Nvidia’s GPUs is pouring out now, with around 20 papers heading to a leading conference in August.

NVDA stock has skyrocketed as a direct result of the surge in interest around AI over the last few months. Some have chided the run-up citing the notion that AI graphics are overhyped. Maybe. But given how massive the gaming industry has become, it’s difficult to argue against there being a massive opportunity ahead for Nvidia.

Combine the growth of gaming with that of data, speech, analytics, cybersecurity, and other applications at Nvidia, and I think there’s a very solid argument that Nvidia’s AI exposure may be only the tip of the iceberg of what investors should care about right now.

C3.ai (AI)

C3.ai’s (NYSE:AI) game-changing technology is the application of AI within a SaaS business model, deployed across the enterprise realm. This pure-play company offers a range of software applications and deployments to its clientele. Thus, it’s no surprise to see C3.ai surge in popularity amid this boom around artificial intelligence of late.

In many respects, C3.ai is considered to be among the most direct ways to play the AI boom. This positioning has led to a flood of investor capital into the stock.

Of course, when things are good in the AI world, they’re amazing for C3.ai. However, as we’ve seen in the past, downturns can also be nasty for investors. Thus, there’s a volatility-based risk assessment that all. investors should make with such companies.

Interestingly, C3.ai is among the smaller and more nimble options in the AI world (particularly when compared to Microsoft and Nvidia). Accordingly, investors likely have more upside with such a name, if AI turns out to be what everyone expects.

Of course, I think a well-diversified portfolio should include all three options. But C3.ai may be the best pick for investors with more appetite for risk, and those seeking higher potential returns over the long-term.

On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.