Listen up, investors! Artificial intelligence (AI) is like the quarterback of the tech world. It can analyze plays, predict outcomes, and make decisions faster than any human ever could.
Think about it: With AI on your team, you have the power to analyze data and make better business decisions, streamline processes, and even create new products and services that were previously unimaginable.
And just like a good quarterback, AI never gets tired, never makes mistakes, and is always ready to take the field. So let's get out there and find some companies that dominate the game of business with some top-notch artificial intelligence. Here come three great examples, like a fullback running right up the gut!
NASDAQ: GOOGL
Key Data Points
Alphabet
Google parent Alphabet (GOOG +1.00%) (GOOGL +1.08%) has a long history of building and using AI tools. The first example of this is Google Translate, which has been a staple tool on mobile phones since 2010.
But Alphabet is just getting into the game, with its sights set on ambitious goals. For instance, it recently acquired Prezi to develop "presentation software" and also bought DeepMind, an AI company that developed the world's first computer program to play a video game successfully.
Nowadays, AI tools are part of pretty much everything Alphabet does. In the long run, this should help the company increase profits while offering more products and services. After all, a significant aspect of AI is that it can be used across many businesses and industries. Beyond Google Translate, AI is applied to Google's other core business areas: ads, maps, and search.
Alphabet also has a strong presence in areas where companies are looking for applications of AI. For instance, some of its products are smart fitness trackers that detect strokes and heart attacks. And it's all part of a long-term vision.
"Google's mission is to organize the world's information and make it universally accessible and useful," Google Fellow Jeff Dean wrote on the company's AI hub. "AI is helping us do that in exciting new ways, solving problems for our users, our customers, and the world."
That vision makes Google an early leader in the artificial intelligence race, giving you another reason to add the parent company's stock to your portfolio. Here's another: After falling 37% over the past year, Alphabet's shares are trading at some of the lowest price-to-earnings ratios of the last decade. So you're getting an outstanding AI stock at a fantastic price.
NASDAQ: PLTR
Key Data Points
Palantir
Palantir Technologies (PLTR +1.17%) makes special software that helps people and organizations make sense of lots of different kinds of data. Sometimes, data can be really confusing or hard to understand, especially when there's a lot of it. But Palantir's tools can help people see patterns and connections in the data, and even make predictions about what might happen in the future.
This is all possible because of artificial intelligence. Palantir's software uses AI to help people make better decisions and solve problems based on their collected data. The company's clients include lots of different kinds of organizations, like hospitals, governments, and banks.
Palantir's business is quite healthy, even in the economic downturn of 2022. In last month's third-quarter report, revenue grew by 22% year over year despite a significant negative impact from currency translation trends. In particular, commercial clients in the domestic market drove their Palantir orders 53% higher. Adjusted free cash flows have been positive in each of the eight latest earnings reports.
So Palantir's management sees an opportunity for growth in a troubled economy. The idea is that this company's AI-powered tools can add value to clients' business operations, making Palantir's products and services even more necessary when budgeting belts are tight.
At the same time, the stock trades near its all-time lows. If you have been keeping your fingers off of Palantir because the shares were too pricey, this could be a good time to take a second look at this robust growth stock.
NASDAQ: NVDA
Key Data Points
Nvidia
Nvidia (NVDA +1.65%) designs computer graphics processing units (GPUs). These chips are specialized to process and render images, video, and other visual data quickly and efficiently. They are used in a wide range of applications, including gaming, professional visualization, and artificial intelligence. Nvidia's products are used in laptops, desktops, servers, and other devices to improve their graphics processing and overall performance.
The company uses AI to develop products and technologies that can help computers and other devices think and learn in more human-like ways. This includes developing GPUs and other hardware that is specifically designed to be efficient at running AI algorithms, as well as software and tools that enable developers to build and deploy AI applications.
Nvidia's AI products and technologies are used in many industries to help businesses and organizations make better decisions and automate tasks. For example, Nvidia's AI platforms might be used in a self-driving car to help it recognize and respond to objects and events in its environment, or in a hospital to help doctors analyze medical images and make more accurate diagnoses.
Palantir and Alphabet address the AI market with computerized data analysis tools. Nvidia flips the script and provides the silicon brains of those AI systems. There's a place for both sides of the AI story in any forward-thinking investor's arsenal.
This AI stock may look expensive at 70 times earnings and 14 times sales. Still, many investors see great value in Nvidia because of its skyrocketing sales and beefy profit margins. Furthermore, the stock price has fallen 51% from the all-time highs of November 2021. Buying Nvidia today is a bet on continued high-octane growth in the years ahead. On the way to that bright future, management missteps or tough market conditions could send Nvidia's stock further down, at least for a while.
That's not every investor's cup of tea, and I understand if you'd rather watch Nvidia from the sidelines for now. But there's a good chance the stock might never be this cheap again. Dollar-cost averaging your way into Nvidia could be the most comfortable way to take action on this volatile stock.
So there are my top three AI stocks for the end of 2022. Stay focused on the value of AI-powered data analysis, stick to the long-term game plan, and give it your all. Whether you pick one, grab all three, or skip them all and find your favorite AI investments in this market, I hope you learned something valuable from the game plan I shared here.
Let's execute that plan to perfection and come away with some moneymaking AI investments.
