The crypto market has produced some insane returns over the years. However, its tendency to unexpectedly rise and fall makes it a bigger risk than most stocks. The decentralized aspect of cryptocurrencies means very few factors truly influence their price fluctuation. As a result, buying crypto can feel more like gambling than making an informed stock investment.
Meanwhile, the tech industry is known for its reliable long-term gains. Tech companies profit significantly from the innovative nature of the market, with constant upgrades to software, services, and various devices that consistently drive revenue growth.
In 2023, artificial intelligence (AI) has exploded, sending many tech stocks soaring. AI has the potential to boost countless industries across tech as millions of businesses and consumers adopt the technology. As a result, AI stocks could offer far bigger gains over the long term than the crypto market.
Data by YCharts
The chart above shows that all three AI-motivated companies on this list have produced significantly more growth in the last six months than the two most prominent cryptocurrencies. So, here are three artificial intelligence stocks with more potential than any cryptocurrency.
1. Apple
It's still early days for Apple's (AAPL 1.45%) venture into AI. However, the potency of its brand could take it far in the industry. The company has built immense brand loyalty with consumers, which bodes well for its long-term position in AI.
Apple has taken a quieter approach to AI than most companies, gradually using the technology to improve user experience across its product lineup. This year, the company introduced several AI-enabled features to its devices, such as improvements to Siri, the iPhone's camera, autocorrect, and various upgrades to the AirPods and Apple Watch.
NASDAQ: AAPL
Key Data Points
Moreover, Bloomberg revealed in July that Apple has developed a framework for building large language models and produced its own version of OpenAI's ChatGPT, which engineers call Apple GPT. The report aligned with comments from CEO Tim Cook, who said the company's $3 billion increase in research and development spending in its third quarter of 2023 was primarily owed to its expansion in generative AI.
While most companies are focused on the commercial side of AI, Apple has its sights set on consumers. The tech giant holds leading market shares in multiple product categories, which could see it become the biggest growth driver of the public's adoption of AI. The company has massive potential in the industry, making it a better investment than any cryptocurrency.
2. Microsoft
As an early investor in AI, Microsoft (MSFT 2.44%) became a company to watch this year. It invested $1 billion in ChatGPT developer OpenAI in 2019, increasing that figure by a further $10 billion at the start of this year. As a result, Microsoft now boasts a 49% stake in the start-up, giving it access to some of the most powerful AI technology available.
Microsoft's partnership with OpenAI gave it a head start in the industry, gaining an edge over competitors like Amazon and Alphabet. The Windows company has used OpenAI's technology to bring AI upgrades to many of its services, including Word, Excel, Bing, and Azure. These platforms have seen millions of consumers and businesses grow to depend on Microsoft's productivity software, giving it massive AI potential. As more companies seek AI services to improve productivity, Microsoft's offerings are an increasingly attractive option.
NASDAQ: MSFT
Key Data Points
The tech company is taking advantage of its dominance in productivity, with plans to soon launch an AI assistant called Copilot to its Microsoft 365 service. The assistant will be a $30 monthly add-on to a regular 365 subscription, which could significantly boost earnings over the next year.
Microsoft is on a promising growth path and will likely offer far larger returns than any cryptocurrency.
3. Advanced Micro Devices
Chip stocks like Advanced Micro Devices (AMD 0.79%) have been among the biggest winners as the AI market has exploded. Its stock soared about 70% since Jan. 1, as Wall Street grew bullish over its long-term prospects.
AMD started the year on the back foot, having fallen behind its biggest competitor, Nvidia, in AI. However, the company has pivoted its business to the high-growth sector and is gearing up to make a play for a portion of Nvidia's market share in 2024.
NASDAQ: AMD
Key Data Points
At the start of next year, AMD is expected to launch the next generation of its MI300 line of chips, which it described as its most powerful graphics processing unit (GPU). The new chip comes as many AI-driven companies are calling for increased competition in the market and alternatives to Nvidia that can offer high performance at a lower cost.
If AMD can launch its new chips at an attractive price point, its stock and earnings could skyrocket. The company has solid prospects in AI and is another far better investment than the crypto market.
