Artificial intelligence (AI) has been the most popular topic this year on Wall Street. Investors were rushing to get in on the action due to the excitement surrounding the potential of this emerging technology. Predicting which businesses will ride the AI revolution wave longer and which will fade into obscurity as the initial excitement fades is important. These three AI stocks have a fair amount of continuous power and growth potential.
Nvidia
The maker of graphics processing unit (GPU) chips, Nvidia (NVDA 1.63%), has undoubtedly been the face of the AI market’s comeback in 2023. The stock has outperformed the market as a whole, rising by more than 170% since January. The company’s early dominance in AI has investors giddy; its AI chips are estimated to hold an 80% market share. The chips made by Nvidia are optimized for applications that require a lot of processing power. In the past, Nvidia was only used for applications like gaming and cryptocurrency mining, but after successfully embracing AI, businesses are now in high demand for Nvidia’s chips.
Snowflake
One of the most important aspects of creating these new AI technologies is training AI models. Programming the model is one thing, but it also needs to be trained on vast amounts of data, which are largely inaccessible to businesses other than Microsoft, Meta Platforms, and Alphabet. However, that might soon change due to data cloud and analytics provider Snowflake (SNOW 0.54%). Snowflake is a cloud-based platform that stores, organizes, analyses, and exchanges data.
The fact that Snowflake is creating a marketplace with easy access to over 2,100 data sets, services, and apps for businesses is fascinating. The company wants to establish itself as the go-to source for businesses looking to locate and extract the data necessary to enhance their operations or train and refine AI models.
Taiwan Semiconductor Manufacturing Co Ltd
Contrary to popular belief, top semiconductor firms like Nvidia do not manufacture their chips. Chips are typically designed by semiconductor companies, which then contract with fabs—specialized manufacturers—like Taiwan Semiconductor Manufacturing (TSM 0.08%) to produce the chips. With a 56% market share, TSMC, as it is commonly known, is the largest chip manufacturing facility globally.
Because TSMC is likely to build whatever chip becomes widespread, it makes it a true pick-and-shovel investment in AI. Leading the industry, TSMC is known for its expertise in advanced manufacturing—a skill that advanced chips are expected to require.
Contact Medallion Guarantee on 0203 985 9551.