We are at the beginning of the artificial intelligence (AI) revolution. The computer is getting smarter and becoming more integrated into our daily lives.
In the 1980s, semiconductors had minimal usage in computers, servers, electronics, and telephones. After 40 years, the semiconductor content in these devices has increased tremendously. And more new devices have sprung up. Supporting the computer age was the age of the internet, the mobile revolution, and the cloud boom. We are now in the digital age, and the AI revolution will take digital cloud solutions to the next level.
On this note, you could consider investing in the AI revolution in this digital landscape with just $200.
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Three no-brainer AI stocks to buy with $200
AI stocks have skyrocketed and are trading at a higher price. Most AI semiconductor stocks are trading above US$150. Would $200 be sufficient to add three AI stocks to your portfolio?
The AI ecosystem has a long value chain from chip companies to cloud companies to digital service providers to device manufacturers and automakers. And they are just the broad categories. The deeper you go, the more niche and risky the categories become. You could consider beginning with the broad categories, investing some amount in each of them.
The ultimate AI chip stock
If you invest in the right semiconductor stocks that have advanced AI tech, it will give you returns. What makes me confident about it is the complex and expensive process of developing advanced AI chips and the pace at which they are advancing. Nvidia (NASDAQ: NVDA) has spent more than a decade preparing for artificial intelligence. It has built the entire AI hardware/software solution from scratch. Even then, it does not manufacture the hardware chips because of the high cost. It outsources the manufacturing to focus on designing the complete infrastructure from server to edge device.
Nvidia’s solutions are sticky and are likely to benefit from all future tech cycles like self-driving cars, robot factories, or smart cities. The 10-to-1 stock split has made Nvidia’s stock affordable. Moreover, the bear market momentum and a tech stock correction have pulled the stock price near the US$100 range. Even a single stock of Nvidia can grow your investment multiplefold in the coming five to seven years.
The AI digital stock
While most lucrative AI stocks trade on NASDAQ, TSX also has some good AI stocks that could pick up momentum later in the AI race. HIVE Digital Technologies (TSXV:HIVE) has expanded its offerings beyond Bitcoin mining. It has opened its Nvidia graphics processing unit (GPU)-powered data centres to enterprises. Its GPU-based cloud solutions will enable companies to perform high-performance and AI computing through its data centre.
While the majority of its revenue comes from Bitcoin mining, the digital solutions are growing and could generate sizeable revenue in the next few years. Hive will help you benefit from both the AI and blockchain revolution. The stock is trading near the $4 range, allowing you to buy 10 shares for over $40.
The application stock
While Nvidia is benefitting from companies building AI capabilities and Hive from companies building AI applications, Docebo (TSX: DCBO) is among the companies that are applying AI to enhance its learning management system. It uses AI to create content for training and make intelligent content suggestions. It then provides these courses to companies to train their staff and customers.
The company has consistently increased its revenue by increasing its number of customers and average contract value per customer. Even though its fundamentals are improving, the $50 stock price values the stock at six times its sales per share and 43 times its forward earnings per share. While AI is enhancing its efficiency, it is unlikely to bring windfall gains for Docebo as it operates in a competitive landscape.
Investor takeaway
You can buy a single stock of Nvidia and Docebo and 10-12 stocks of Hive for $200, diversifying your AI investments. The three stocks can give you exposure to the different stages of the AI revolution, bringing in short-, medium-, and long-term returns.
