Like it or not, AI has become a recurring buzzword that thousands of businesses have used to stoke the interest of investors and consumers alike. To be sure, increasingly sophisticated artificial intelligence solutions have already permeated our lives, whether we're talking about self-driving vehicles, the effortless interactions we have with new smart-home devices, or the algorithms underlying a seemingly simple internet search.

In the same way that products featuring AI are more complicated than they seem, it's not easy to find the best AI-centric stocks. So we asked three Motley Fool contributors to each discuss an artificial intelligence stock investors should be watching this month. Read on to learn what they had to say about Splunk (SPLK), IBM (IBM -0.03%), and Alphabet (GOOG 0.14%) (GOOGL 0.07%).

Aerial view of Earth at night with connected wireless nodes, AI/Internet of Things concept

Image source: Getty Images.

An (operationally) intelligent way to invest

Steve Symington (Splunk): Judging by Splunk's more than 20% pullback from its all-time high set in September, you'd think something had happened to derail the operational intelligence platform leader's success. But that couldn't be further from the truth.

Rather, Splunk's drop came on broader weakness in the stock market, with high-flying tech names taking the biggest hit in recent weeks. Splunk's decline also came despite multiple analysts weighing in with positive notes last month regarding expanding use cases and continued high interest in Splunk's platform -- both happy consequences of cutting-edge machine learning capabilities the company recently implemented into its core products.

Splunk is set to announce its next quarterly results in less than two weeks, on Nov. 29. When it does, it will aim for its 27th straight quarter of exceeding guidance, which this time calls for revenue to climb more than 30% year over year to between $430 million and $32 million, and for adjusted operating margin of 13%.

Of course, if Splunk does make it 16 straight, with the market so accustomed to its relative outperformance, the gravity of another beat and the movements of the broader market will likely determine where the stock is headed in the short term. But for patient, long-term investors who recognize that Splunk is still in its early stages of growth, I think the stock is definitely worth considering this month.

It's time to go big and blue

Anders Bylund (IBM): Big Blue has been dabbling in artificial intelligence for decades. You knew that the company's interest was getting serious by 1997, when its Deep Blue system defeated chess world champion Garry Kasparov. These days, the so-called Watson platform sits at the very heart of IBM's business plans.

The transformation from a one-stop IT shop to an AI-centric specialist in faster-growing fields has been long and painful, leaving us IBM investors with a negative return of 34% in the last five years. Over that span, we missed out on a 52% gain in the broader market, as measured by the S&P 500 benchmark.

IBM Chart

IBM data by YCharts.

But IBM's so-called strategic imperatives have been collecting more than half of Big Blue's quarterly sales all year long. At long last, the company is ready to reap the benefits of that difficult strategy shift.

Mr. Market is still not sure about any of that, leaving the stock for sale at a hugely affordable 9.9 times trailing earnings and 11 times free cash flow. Peers in the technology sector often trade at twice or thrice those multiples, and the fun part about earnings valuations like that is that IBM would unlock stronger earnings and cash flows in the process.

On top of all that, Big Blue is acquiring cloud computing and open-source software veteran Red Hat (RHT) in a $35 billion blockbuster of a deal. That company is a serious challenger to the AI crown in its own right, giving IBM a serious leg up on the competition. I can't wait to see Red Hat and Big Blue working up some purple solutions in the cloud and AI spaces.

So we have a leader in the AI market trading at a massive discount and investing heavily into expanding an already-impressive market position. Any one of those three arguments would be enough to make IBM a strong ticker in the artificial intelligence market. All three together makes it nearly unbeatable.

From search engine to AI engine

Chris Neiger (Alphabet): The tech giant has its hands in many types of technologies, but artificial intelligence is taking up more and more of the company's attention these days. Alphabet uses AI to find the most relevant search results for its users, uses it in text-to-speech applications for its language translation app, and has even designed its own AI chips for its Google Cloud servers.

But one of the most notable ways Alphabet is betting on AI is through its self-driving car company Waymo. The company uses artificial intelligence that allows its autonomous vehicles to recognize and analyze images in real time and determine whether they are road signs to be followed, pedestrians to be avoided, or fellow vehicles.

To date, Waymo's AI-powered vehicles have racked up 10 million miles of real-world road tests and more than 7 billion miles in virtual tests. The company's latest phase of testing is its Early Rider Program in Phoenix, Arizona, in which members of the public use the self-driving vehicles to travel to and from work and school, pick up groceries, and run other errands.

Waymo's autonomous AI cars are more than just a side project for Alphabet, though. The company will launch a commercial self-driving service later this year, and some analysts forecast Waymo will be worth $70 billion by 2030 -- or potentially even $140 billion, by less conservative estimates.

Waymo's self-driving service will be one of the first ever of its kind, and it would be a testament to just how serious Alphabet is about making money from its artificial intelligence investments. Considering Alphabet's shares are down about 13% since the beginning of October, now is a good time for investors to consider snatching up shares of this AI leader.

The bottom line

Most artificial intelligence is still young. But it seems clear that AI is poised to continue positively disrupting the world as we know it in the coming years. From Splunk's recent pullback and upcoming quarterly report, to the growing influence of IBM's strategic imperatives, and the impending launch of Waymo's commercial self-driving vehicle service for Alphabet, we think investors would be wise to keep a close eye on these three companies in November.

Editor's note: This article has been corrected to note Splunk was aiming to notch 27 straight quarters of beating its guidance.