3 Artificial Intelligence Stocks to Buy as the Technology Advances in 2024

Stocks to buy

According to the International Monetary Fund, we are on the brink of a technology revolution spearheaded by artificial intelligence. The technology will boost productivity, accelerate global growth and raise incomes globally. Multiple AI stocks will benefit from this transformation.

Today, businesses are analyzing how they can leverage AI to improve productivity and how it affects the competitive landscape. Already, organizations are using AI in various use cases, such as application development, customer service, pharmaceutical discovery and creative design.

However, to achieve the promise of AI, companies must make significant investments. That starts with the data and models they use. First, organizations are investing in systems to collect, store, manage and access massive data sets. Then, using the right models, they can derive patterns from their data to drive decision-making, customer service and innovation.

Across the artificial intelligence stack, several companies are meeting various needs. From chip companies producing chips for training large language models to companies developing large language models. These AI stocks are at the forefront of this race and will be winners in 2024.

Artificial Intelligence Stocks to Buy: Taiwan Semiconductor Manufacturing (TSM)

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As the largest semiconductor foundry, Taiwan Semiconductor Manufacturing (NYSE:TSM) is one of the leading AI stocks. The company is seeing soaring demand as the scramble for AI chips for data centers and edge computing grows. Over the years, many integrated device manufacturers transitioned to fabless designers, cementing Taiwan Semiconductor’s importance in chip production.

Taiwan Semiconductor has built an unassailable competitive advantage in its process technology. By investing heavily in research and development, it has maintained leadership in node advancement. As a result, it attracts and retains high-quality, fabless customers. For instance, Apple (NASDAQ:AAPL) in mobile chips and Nvidia (NASDAQ:NVDA) in graphic processing units.

Today, the company is producing leading-edge node chips for its AI customers. Competitors have had challenges producing these chips, enabling Taiwan Semi to dominate the market and charge higher prices. Already the firm is producing 3-nanometer chips for Nvidia, Apple and Intel (NASDAQ:INTC) as competitors struggle to catch up.

On January 19, the company released results and issued upbeat guidance. The company is benefitting from cloud service providers upgrading their data centers with chips supporting AI capabilities. Management was optimistic on high-performance computing demand related to AI, forecasting more than 20% revenue growth in 2024.

While AI adoption has been mainly in the data center, it will become ubiquitous, supporting Taiwan Semi’s growth. Consumer devices such as smartphones and industrial equipment will need AI capabilities, ushering in the next growth cycle.

Meta Platforms (META)

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Although it is primarily a social media company, Meta Platforms (NASDAQ:META) has been a player in the AI for a while. Its increased efforts in the field came out of necessity after Apple’s IDFA changes curtailed user tracking. Faced with diminished advertising accuracy, Meta Platforms pivoted to AI.

Two years later, the company has become one of the top AI stocks. Notably, CEO Mark Zuckerberg has touted AI as “the foundation of our discovery engine and our ads business.” The company has amassed hundreds of top A.I. researchers and invested in significant computer power to power these systems. These efforts are paying off with impressive results.

In February 2023, it released LLaMA (Large Language Model Meta AI) a foundational large language model. Meta’s aim was to advance AI research. Then, in July 2023 it released LLaMA 2 for research and commercial use. Impressively, the model outperforms other open-source language models in coding, reasoning, proficiency, and knowledge tests.

Meta has adopted a unique approach, giving away its models for free. By open-sourcing its models, Meta hopes third-party developers will help improve the platform. Like Linux became the open-source operating system, Meta hopes Llama will become integral to building the next generation of AI applications.

Zuckerberg recently committed to developing artificial general intelligence. He pledged to spend heavily on compute infrastructure to support this effort. If Meta Platforms manages to standardize AI development through its open-source models, it will be a key player in the ecosystem. Considering Zuckerberg’s focus on winning in AI, it remains one of the top artificial intelligence stocks, and certainly one of the artificial intelligence stocks you should grab.

Alphabet (GOOG, GOOGL)

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Google’s parent company, Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), has been derided for losing the AI war to Microsoft (NASDAQ:MSFT). These assessments seem overly pessimistic. The company is an innovator and will prove the doubters wrong.

The search giant has made significant investments in artificial intelligence. The most significant one was the 2014 acquisition of DeepMind. Secondly, Google has been using artificial intelligence in search for a while, even before OpenAI launched ChatGPT.

Moreover, it is introducing products that will integrate generative AI into search. Today, users can rely on Bard for chat-like responses. It is also testing Search Generative Experience and has expanded its features since its May 2023 launch.

One competitive advantage that positions Google to succeed is its high-quality training data. Today, Google has six products with over 2 billion users and 15 products, each with more than 500 million users. This data has been crucial in creating context-aware AI functions. For instance, features such as Smart Compose in Gmail have significantly improved the user experience.

Alphabet’s leadership among artificial intelligence stocks extends beyond software to hardware, making it one of the best AI stocks. It developed a specialized chip, a Tensor Processing Unit (TPU), specifically for AI applications. Its TPUs and open-source framework, Tensor, power services such as Gmail, Maps and YouTube.

As Google integrates AI into its products, it will see more growth. For example, serving context-rich ads into generative search results will improve ad conversion and monetization. In December 2023, Google released Gemini, its latest and most powerful LLM, proving Alphabet is still in the AI race. Don’t count out this technology giant yet; it has the resources to win!

On the date of publication, Charles Munyi did not hold (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.

Charles Munyi has extensive writing experience in various industries, including personal finance, insurance, technology, wealth management and stock investing. He has written for a wide variety of financial websites including Benzinga, The Balance and Investopedia.

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