Every so often, an opportunity emerges on the market that has crazy long-term potential for investors. With increasing frequency, those opportunities are focused on technology stocks and key advancements. And it just so happens there’s a pair of artificial intelligence stocks that investors should be looking closely into right now.
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First, an intro: Why AI stocks?
AI may be the emerging buzzword used in the past few years, but there’s a good reason for that popularity. At its simplest, the use of AI can simplify mundane tasks and unlock creativity; more recently, it can be used to provide answers and support across an increasing number of fields as well as aid research and development initiatives.
In short, it’s a game-changer across a multitude of segments across the market.
As the jobs and complexity of those AI tasks increase, so too does the processing power required to power those AI bots. That’s part of the reason why semiconductor stocks have become all the rage- they’re fueling the market’s insatiable demand.
So then, what are those AI stocks that could go parabolic?
This is the must-have AI stock right now
At this point, most investors have heard of Nvidia (NASDAQ: NVDA), which designs GPUs (Graphics Processing Units). GPUs can process the complex calculations needed for AI development in a more efficient manner than traditional CPUs.
And demand for Nvidia’s processors and software continues to grow. In fact, the company has secured partnership agreements with some of the largest technology titans on the market.
That includes the big three cloud providers of Amazon, Microsoft and Alphabet, all of whom are building out their respective AI product portfolios and investing heavily in AI infrastructure.
In other words, investors can expect Nvidia’s growth to continue for some time.
Oh, and to add some icing onto the cake, Nvidia is set to announce earnings for its most recent quarter this week. As a reminder, during the last quarter, the company announced an insane and record quarterly revenue of US$26 billion, reflecting a year-over-year increase of 262%.
E-commerce goes AI
You can’t mention technology stocks without a passing word on Shopify (TSX: SHOP). The e-commerce titan is well-known for its growing platform of products and services that allow businesses to stand up an online storefront in a fraction of the time it used to.
Shopify’s ever-expanding universe of plug-ins and add-ons to that platform now covers everything from purchasing and fulfillment to support and marketing. In other words, Shopify offers a complete set of conceivable tools for businesses.
And now Shopify Magic is the company’s venture into the world of AI. Magic helps users generate product descriptions, enhance media and even generate sales prediction models for returning customers.
Prospective investors should note that Shopify Magic is just one part of the complete package that is Shopify. That complete package has provided investors with stellar growth over the years and represents a unique opportunity for investors.
As of the time of writing, Shopify now sits at an attractive entry point, down 2% year to date.
Artificial intelligence is here to stay
No stock, even the most defensive, is not without risk. That risk extends to AI stocks like Shopify and Nvidia, too.
In my opinion, one or both stocks would do well as great growth stocks to bolster any larger, well-diversified portfolio.
Buy them, hold them, and watch them grow.
