What Are the 3 Top Artificial Intelligence (AI) Stocks to Buy Right Now?

Artificial intelligence (AI) stocks have soared over the past two years as investors bet on what could be the next technological revolution. The idea is that AI will change the way businesses operate by reducing costs and driving innovation – and the technology also aims to make everyday life easier, as AI helps us with a wide range of tasks, from making an appointment to planning a trip.

Although AI stocks have been climbing, the good news is that it’s not too late to jump into this investing theme – and that’s because we may only be in the early days of the full AI story. Even some companies that have generated significant growth through AI still offer potential for additional growth over time.

With that in mind, what are the top three AI stocks to buy right now? Let’s find out.

1.Nvidia

Nvidia (NVDA 0.04%) has already achieved many victories in AI thanks to its dominance in the AI ​​chip market. As the potential of AI became clear several years ago, Nvidia adapted its graphics processing units (GPUs) to the technology, and it turned out to be a brilliant gamble. Over the past few quarters, Nvidia’s GPUs have helped the company achieve double- and triple-digit revenue growth and strong sales profitability.

This has resulted in a share price increase of 1,300% over the last three years. But the good news is that the gains in earnings and stock performance may be far from over. For several reasons. Companies are investing in data center development now and in the years to come, and Nvidia GPUs are an essential part of any high-performance data center. The company’s GPUs are also needed well beyond the training phase of AI models: they also play a key role in AI inference or in actually solving complex problems. Finally, Nvidia GPUs could expand their dominance in areas like robotics and cellular technology.

All of this means that Nvidia stock could have a lot of room to run in the years to come – and now is the perfect time to get in on it.

2.Oracle

Oracle (ORCL +2.21%) is a leading database software company, and in recent quarters it has also emerged as a potential winner in AI. This is due to the company’s cloud business, which offers customers something they currently need badly: capacity for AI workloads.

Over the past few quarters, Oracle has seen its business gain momentum, and the latest period is a perfect example of that. Over the three months, Oracle’s infrastructure revenue jumped 55% to $3.3 billion, and more importantly, the company expects this trend to continue. It predicts cloud infrastructure revenue will reach $18 billion in the current fiscal year, then grow to $144 billion in four years.

Although Oracle plans to increase capital spending to meet its customers’ AI needs – with $35 billion planned for this fiscal year – most of it is for data center equipment. By investing in equipment rather than buildings or land, Oracle can focus on developing technologies that generate revenue growth while limiting costs.

Oracle stock soared after the company’s latest earnings report, then fell to take its valuation to 37 times forward earnings estimates – and that gives you a great entry point.

3. Alphabet

You may know Alphabet (GOOG +0.00%) (GOOGL 0.07%) the best for a platform used daily around the world: Google search. It has about 90% share of the search market, and thanks to Alphabet’s focus on generating the best possible search results, that’s unlikely to change. This is important because advertising on Google generates revenue for the company.

What is the place of AI? In a big way. Alphabet has developed its own language model, Gemini, which it uses for a variety of key tasks: from improving search and ad experiences to serving the company’s Google Cloud customers. This focus on AI has helped boost profits in recent quarters, and in the most recent period, Alphabet beat analysts’ estimates for revenue and earnings.

As companies flock to cloud providers for their AI tasks, recent trends suggest that Alphabet should be one of the winners. The company said in the most recent quarter that demand for AI drove growth in the cloud industry, and the cloud backlog reached $155 billion.

Alphabet is among the cheapest tech stocks in the Magnificent Seven, trading at 27x forward earnings estimates, and this, along with the points I mentioned above, make it one of the best AI buys to make right now.