The rapid emergence of artificial intelligence has confounded both skeptics and believers. The shift from obscurity in 2021 to widespread adoption and investment has been unprecedented. Today, we are in an AI race with the best AI stocks positioned to serve this innovation.
While some market participants believe AI is overhyped, the significant strides should not be ignored. Here are some examples of how AI is permeating various industries. Nasdaq (NASDAQ:NDAQ) is using artificial intelligence to help detect and prevent financial crimes. In molecular medicine, scientists are using the technology to simulate molecular interactions from vast data sets to formulate potential drugs.
Technology companies are experiencing breakthrough moments, as ServiceNow (NASDAQ:NOW) CEO Bill McDermott highlighted in Q4 2023 results. “Generative AI is injecting new fuel into our already high performing engine. ServiceNow’s intelligent platform for end to end digital transformation is driving massive leaps in productivity and explosive growth,” he noted.
According to McKinsey’s estimation, generative AI will add $2.6 trillion to $4.4 trillion of value across 63 use cases the firm analyzed. The best AI stocks are critical in helping AI achieve its potential. So far, these companies have shown they are ready to spearhead this revolution.
Best AI Stocks: Accenture (ACN)
Some of the best AI stocks are companies helping enterprises move from AI experimentation to implementation. This consulting giant has embraced AI in its business and is assisting clients to adopt the technology. In June 2023, it announced a $3 billion investment in its Data & AI practice to support its customers in applying AI for growth and productivity.
Accenture (NYSE:ACN) sees unprecedented demand and is ready to pounce on the opportunity. It has been a leader in AI and has over 1,450 patents and pending applications. Today, it is applying its expertise to help clients in retail, manufacturing, and other industries adopt and scale AI solutions.
Recognizing the power of generative AI in personalization, the firm has launched several specialized services. These capabilities enable enterprises to modify and manage foundational models. The company’s proprietary switchboard allows users to select a combination of various models for their unique needs and context.
For Accenture, AI isn’t just a dream. The firm has swung into action and is already seeing results. In the last fiscal year, it had $300 million in GenAI sales. The company is off to an impressive start this fiscal year, delivering over $450 million in bookings in Q1 FY2024 alone.
The firm continues to strengthen its advanced center for AI. Moreover, it aims to increase its AI experts from 40,000 to 80,000. Today, under 10% of companies have advanced AI capabilities, and Accenture will be central to helping companies reinvent their businesses with generative AI.
Over the past year, the market hasn’t appreciated the potential of Amazon (NASDAQ:AMZN) in AI as much as Microsoft (NASDAQ:MSFT). The retail and cloud giant remains one of the best AI stocks due to the several levers it can pull in AI.
First, the firm applies AI in its online marketplace to enhance its recommendation engine. As a result, customers can see products based on their preferences and browsing history, increasing conversions. A good example is how Amazon Fashion is improving the customer experience for shoppers. Its machine learning and AI models help to recommend the best fit and style to customers.
Secondly, Amazon is leveraging AI in other ways in its retail business. For instance, the company is improving its inventory management using generative AI’s predictive capabilities. It’s also utilizing the technology for workforce management and routine task automation, improving productivity.
Thirdly, its cloud division, Amazon Web Services, makes it one of the best AI stocks. AWS has integrated AI to create bespoke solutions for various industries. For instance, retailers rely on solutions such as Amazon Personalize and Amazon Forecast for customer personalization and business planning, respectively.
Also, AWS is providing the computing power and capabilities to train and deploy AI models through Amazon Bedrock. Many organizations are using Amazon’s cloud service to train their foundational models. Organizations like Booking.com (NASDAQ:BKNG) and Perplexity AI have launched their GenAI applications on AWS.
Due to the soaring demand, AWS revenues could reaccelerate in 2024. The division will increase growth due to AI demand after a slowdown in 2023 due to cost optimizations. AMZN stock is one of the best artificial intelligence stocks considering this tailwind.
Marvell Technology (MRVL)
Marvell Technology (NASDAQ:MRVL) is an underappreciated AI play in the shadows of Nvidia (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD) and Broadcom (NASDAQ:AVGO). The semiconductor company has a thriving data center business, mainly in artificial intelligence.
In the latest quarter, Q3 FY2024, data center revenues were up 21% quarter-over-quarter. Although the company sees softer demand in other end markets, AI and cloud are a bright spot. “The diversification of our portfolio is serving us well, with strong growth from AI and cloud carrying us through a softening demand environment in other end markets,” noted CEO Matt Murphy.
Looking at the overall performance, the AI business is becoming a significant portion of revenues. It exited 2023 with over $200 million in quarterly revenues from AI. Management maintains that this business will be a robust grower in 2024. Its optical solutions are part of every AI cluster deployment, which will support data center segment growth.
Analysts have also embraced this bullish view on MRVL stock and consider it one of the best AI stocks. On January 19, Citi reiterated its “buy” rating and ranked it the top pick in the specialty semiconductor industry. Analysts like it as a continued beneficiary of AI and forecast more AI project sales. Furthermore, they expect a boost as non-cloud markets recover in 2024.
Marvell fits the bill if you are looking for an undiscovered artificial intelligence stock. With 25 “buy ratings,” the stock is headed for big gains in 2024. Besides, a recovery in the consumer and enterprise networking markets after 2023’s downturn will boost the stock.
On the date of publication, Charles Munyi did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.