If you've been hibernating in a cave, far away from where Wall Street crosses Silicon Valley, then it's time to wake up and smell the overheated circuitry: Artificial intelligence (AI) is no longer just a sideshow in the tech world. Instead, it's emerging as the driving force behind a new digital era. Automated algorithms and mock-creative computers are reshaping the way people live, work, and play.

Investors who want to profit from this unstoppable sea change should keep an eye on a few powerful megatrends. So, let's explore why AI stocks could be your key to profits in 2023 and beyond.

Mind you, I can only scratch the surface of this massive opportunity -- future generations will write books and design college courses around this game-changing moment in history.

AI is growing up, and so are the profits

One could say that AI is maturing from its "toddler" stage to a full-grown "tech teenager" right about now.

According to market research firm Next Move Strategy Consulting, the global AI market is expected to pass the trillion-dollar milestone by 2028, up from a modest $95 billion in 2021. That's a compound annual growth rate (CAGR) of 41%. If those numbers don't excite you, it's time to check your pulse.

With such explosive growth, investing in AI stocks is like hitching a ride on a rocket ship. Just make sure to buckle up for the inevitable ups and downs along the way. These rocket rides are never smooth, you know.

Smarter AI, smarter applications

As the technology advances, AI is becoming an essential component in a wide range of industries -- from the plainly obvious to the downright surprising. Whether you're looking at healthcare and finance or transportation and manufacturing, AI is changing the game in ways people could have only imagined a few years ago. It's like installing a brain upgrade across the entire global economy, one business at a time.

For example, AI-powered chatbots are now handling customer queries with ease, making those pesky hold times in understaffed and overloaded human call centers a thing of the past. Leaders in this niche include tech giants such as International Business Machines and Amazon, but also smaller specialists like Sprinklr and 8x8.

Meanwhile, self-driving cars are cruising closer to reality every day. AI systems that used to be stumped by complex roadways and ever-changing real-time traffic conditions are learning how to manage millions of unique situations. Tesla leads the pack as always, but more traditional car designers like Ford Motor Company, Nissan, and General Motors are catching up fast.

These smarter applications are opening up new avenues for revenue growth and attracting investors like bees to honey.

The rise of the AI chip

As AI systems grow more sophisticated, the hardware needed to support them must also evolve. That's where AI chips come in. The special demands of the latest AI software call for equally specialized silicon chips, designed specifically to power AI applications. Traditional central processors or graphics chips can still crunch the numbers behind the robotic scene, but nowhere near as quickly or efficiently as the tailor-made AI chips.

Established semiconductor giants Nvidia, Advanced Micro Devices, and Intel are all vying for a slice of this burgeoning market. You can bet your last dollar that this subsector is teeming with relative unknowns as well, all hoping to make a mint while changing the world.

As these tech giants and smaller challengers race to develop the next generation of AI chips, investors stand to benefit from the innovation-fueled competition.

AI in healthcare: A prescription for success

The healthcare industry is ripe for disruption in many ways, and AI stands ready to administer a healthy dose of innovation. From improving diagnostics and streamlining medical processes to developing personalized treatment plans, AI is revolutionizing the way healthcare is delivered.

I'm no doctor, but I do own some healthcare stocks. Of course, the two healthcare names in my collection of 36 stocks just happen to be high-tech powerhouses with decades of AI leadership.

  • The da Vinci surgical robots from Intuitive Surgical would be far less accurate and safe without the help of AI-powered stabilization algorithms. The company also analyzes medical procedures and outcomes with artificial intelligence systems, supporting further research and even better surgical results over time.
  • Teladoc Health has applied machine learning tools to its telehealth services for years. The company boasts sophisticated data analysis tools alongside a vast treasure trove of data collected in Teladoc's interactions with patients and doctors. Taken together, Teladoc is perfectly positioned to leverage AI-driven insights to enhance its telehealth offerings.

As a longtime investor in these cutting-edge healthcare stocks, I'm excited about the potential of AI-driven innovation to not only improve patient care but also to strengthen the long-term growth prospects and value of innovators like Intuitive Surgical and Teladoc. As the global population ages, the demand for healthcare services increases, and AI-powered solutions will soon be indispensable.

Companies at the forefront of AI in healthcare could be just what the doctor ordered for investors seeking long-term growth opportunities.

The time to invest in AI is now

In conclusion, dear investor, the AI revolution is well underway.

The incredible growth rates and diverse applications you've seen here are just the tip of the proverbial iceberg. As AI continues to redefine industries, from healthcare to transportation, savvy investors have a golden opportunity to take advantage of this innovative surge and make a mint in the long run.

So, don't sit back to watch the AI parade pass you by. Do some research, identify those key players making the biggest splashes in the AI space, and consider how these trailblazers could fit into your investment portfolio. No matter which market sector you know best, you'll find numerous companies embracing the AI revolution right now.

The future belongs to those who embrace change and seize the opportunities it presents. And when it comes to world-changing AI opportunities, the change is underway and the future is now.