With AI beginning to transform just about everything, the potential $1.8 trillion AI boom could mint a few millionaires. Even analysts at Bank of America are excited, noting that AI stocks are on the brink of an “iPhone moment” and could boost the global economy by $15.7 trillion in seven years.
“We are at a defining moment – like the internet in the ’90s – where Artificial Intelligence (AI) is moving towards mass adoption, with large language models like ChatGPT finally enabling us to fully capitalize on the data revolution,” the firm told Business Insider. “It took ChatGPT just 5 days to reach 1 million users, 1 billion cumulative visits in 3 months, and an adoption rate which is 3x Tik Tok and 10x Instagram’s,” they added. “The technology is developing exponentially.”
And this is just the start. As AI explodes, here are three of the top “no-brainer” AI stocks to buy.
|ROBT||First Trust Nasdaq AI ETF||$40|
SoundHound (NASDAQ:SOUN) is a $417 million company that develops conversational AI technology. Its goal is to allow humans to interact with technology as they would with their friends. Moreover, the company is working with the auto industry, integrating voice assistants into vehicles. Auto could be a massive market for SoundHound, with the company expecting 90% of new cars to have voice assistants.
SoundHound’s earnings have been strong. Just last week, the company posted 2022 revenue of $31.1 million. That was at the high end of its guidance. SOUN expects its revenue to increase by about 50% this year.
“Conversational AI is at a watershed moment and our proprietary Dynamic Interaction and Generative AI solutions are perfectly positioned. From electricity to telecommunications to internet search, each generation has established a new foundational capability to better serve society, and AI will catalyze this next horizon,” said Keyvan Mohajer, CEO. “Such a convergence of technological maturity and market demand is rare, and SoundHound, as a leading innovator of voice and conversational AI, is in a unique position to create tremendous value.”
First Trust Nasdaq AI and Robotics ETF (ROBT)
One of my favorite ways to trade any hot sector is with an ETF, such as the First Trust Nasdaq AI and Robotics ETF (NASDAQ:ROBT). This ETF, which has an expense ratio of 0.65%, tracks AI, robotics, and automation companies.
The ETF owns the shares of companies that develop the building blocks of AI, create robotics or AI themselves, or provide AI and/or robotics services.
AI could soon be a $600 billion addressable software market, says C3.ai (NYSE:AI) CEO Tom Siebel. “Everyone will be using enterprise AI applications, just like they use PCs, just like they use relational databases, just like we use CRM. Generative AI definitely accelerated the interest in AI. So, AI is now at a peak, and that seems to work very well for C3.ai because I think we’re the largest application player in that space.”
Even more impressively, the company is making money by developing AI solutions and software for large firms in several industries, including Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), and Alphabet (NASDAQ:GOOG,NASDAQ:GOOGL).
Last quarter, C3.ai posted revenue of $66.7 million, down about 4% year over year. However, that was ahead of the company’s guidance range of $63 million to $65 million. It was also above analysts’ average estimate of $64.3 million.
The company posted a loss, excluding certain items, of $15 million. That was better than its guidance range of -$25 million to $-29 million. And C3.ai is on track to be cash positive and profitable, excluding certain items, by the end of 2024.
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.