The surgeon general has determined that investing in artificial intelligence (AI) has proven to be advantageous to your financial health. OK, not really. However, if the nation's top doctor were to weigh in on AI and investing, that could very well be his conclusion.
Of the top 10 biggest stocks by market cap right now, seven of them have solid AI credentials. Four have more than doubled since January 2020. Google parent Alphabet (GOOG 0.20%) (GOOGL 0.30%) isn't far away from delivering a 100% return.
What's especially exciting is that the AI boom could just be getting started. Which top AI stock could make investors the most money this decade? Here's why it just might be Google.
Several worthy contenders
Several top AI stocks are legitimately in the running to make the most money during the new version of the Roaring Twenties. Tesla (TSLA 1.82%) especially stands out because of its big head start. The electric vehicle (EV) maker's shares have skyrocketed more than 8 times so far this decade, including a gain of more than 180% in 2023.
NASDAQ: TSLA
Key Data Points
AI could be the key to Tesla holding onto its lead. The company has a huge opportunity in the autonomous ride-hailing (robotaxi) market. Ark Invest founder Cathie Wood thinks that Tesla could be worth nearly 9.5 times its current value by 2027.
Nvidia (NVDA 1.40%) also is already way ahead of most other AI stocks. Its shares have risen more than 6 times since early 2020. Most of the gain has come this year with surging demand for the company's graphics processing units (GPUs) to power generative AI applications. This demand trend doesn't show any signs of slowing down so far.
NASDAQ: NVDA
Key Data Points
Microsoft (MSFT +0.63%) is another worthy contender in the race. The tech giant shrewdly teamed up with ChatGPT developer OpenAI. Microsoft's software products now have significant integration with generative AI. It's not hard to envision the stock delivering impressive returns over the next six or so years as customers move to Microsoft's Azure platform to take advantage of its AI capabilities.
We could make a similar argument for Amazon (AMZN +0.81%). The company's Amazon Web Services (AWS) is the top cloud-services platform. Amazon has moved quickly to roll out generative AI functionality for AWS.
Don't ignore Apple and Meta Platforms, though. Apple might not be trumpeting its AI progress as loudly as others, but it's nonetheless doing a lot in AI. Meanwhile, Meta is taking an open-source approach with much of its AI work -- a strategy that could pay off handsomely.
The case for Google
However, I think there's also a strong case to be made that Google will be the best AI stock of the decade. Like Tesla, Google could be a key player in the robotaxi market. Its Waymo self-driving car technology unit already operates autonomous ride-hailing services in Phoenix and San Francisco. It's expanding soon to Los Angeles.
Like Nvidia, Google has developed and continues to develop AI chips. Earlier this summer, the company announced the next generation of its tensor processing unit (TPU) chip that it claims is up to 1.7 times faster than Nvidia's A100 GPU and uses as much as 1.9 times less power.
While Microsoft and Amazon have integrated generative AI with their cloud platforms, so has Google. And Google Cloud is trouncing Azure and AWS based on sales growth.
Google could even be about to give Microsoft and OpenAI a run for their money. The company is reportedly close to releasing its Gemini generative AI tool. Semiconductor research company SemiAnalysis maintains that Gemini is already 5 times more powerful than GPT-4.
There's also the valuation factor. Google is cheaper than all of the other top AI stocks based on forward-earnings multiple and price-to-earnings-to-growth (PEG) ratios, except for Meta.
What about the threat AI presents to Google?
Some argue that AI presents an existential threat to Google. For example, Bill Gates predicts a scenario in which an AI personal assistant could wipe out search engines completely. Search generates, by far, the most revenue for Google and Alphabet right now.
I don't rule out that possibility. However, my view is that Google is as likely to develop such an AI personal assistant as any other company. And I have no doubt that Google would be able to successfully monetize such an app.
Perhaps Tesla, Nvidia, Microsoft, or one of the other big AI leaders will make investors the most money this decade. But it won't surprise me in the least if Google ends up on top.
