AI, or artificial intelligence, stocks have had a stellar run in recent months. Generally, AI is powered by machine learning, which basically trains systems with vast amounts of data. The trained system is then used to develop applications across verticals and industries. OpenAI’s ChatGPT was launched in late 2022 and showcased the supremacy of generative AI as well as large language models.
Investor optimism surrounding AI stocks is huge, and for good reason. The AI space will be worth more than US$1 trillion by the end of 2030, providing early movers with a great chance to drive top-line growth.
Here are the best AI stocks you can buy for explosive growth in 2023 and beyond.
Microsoft stock
One of the largest companies in the world, Microsoft (NASDAQ:MSFT), is a well-diversified tech giant. It first invested in OpenAI back in 2019 and plowed in another US$10 billion recently following the blockbuster launch of ChatGPT.
Its search engine, Bing, is integrated with ChatGPT allowing Microsoft to significantly increase ad sales and gain market share from Google. Microsoft is now looking to incorporate ChatGPT with products such as Azure and its Office productivity suite.
MSFT stock has already surged 43% year to date and is up over 1,000% in the last decade.
NVIDIA stock
Due to the AI buzz, Nvidia (NASDAQ:NVDA) stock has almost tripled year to date. Trading at record highs, the semiconductor giant has now gained over 12,000% since June 2003, easily crushing broader market indices.
Now valued at over US$1 trillion in terms of market cap, Nvidia’s graphics chips will be used to train data-intensive machine learning platforms and large language models.
Nvidia is part of several growth markets, such as gaming and autonomous driving, making it one of the hottest tech stocks globally.
Docebo stock
A TSX stock part of the e-learning vertical, Docebo (TSX:DCBO) is up 211% since its initial public offering in 2019. Docebo has already onboarded approximately 3,500 enterprises on its AI-based e-learning platform, enabling the company to increase sales by 37% year over year in 2022.
In addition to an expanding customer base, the average contract value for Docebo has also increased by 30% in the last three years. This suggests companies are increasing spending on the Docebo platform, allowing it to benefit from improving profit margins.
It generates over 90% of sales via subscriptions, enabling Docebo to generate predictable cash flows across market cycles.
Down 60% from record highs, DCBO stock trades at a discount of 40% to consensus price estimates.
C3.ai
The final AI stock on my list is C3.ai (NYSE:AI). Similar to NVDA stock, C3.ai has gained 300% in 2023. A SaaS (software-as-a-service) company, C3.ai allows its base of enterprise clients to deploy AI applications effectively.
It offers a portfolio of tools for enterprises to enhance overall productivity at a lower cost. It will soon be launching a suite of AI-backed solutions, such as enterprise search, where companies can use natural language interfaces and retrieve relevant data sets from systems.
C3.ai is well poised to benefit from a first-mover advantage and deliver market-thumping gains to shareholders.
But AI stock trades at a premium of over 40% to price target estimates.