There's little doubt that artificial intelligence is here to stay. It's just too game-changing to put back in the box now. In fact, we've only scratched the surface of its potential usage. Industry research outfit Precedence Research predicts the worldwide AI market will grow at an average annualized pace of over 19% through 2034.
This, of course, translates into opportunity for investors. The question is, which stocks offer the best shot at capitalizing on the movement's future growth? Here's a rundown of 10 of the hottest names in the business that will likely remain hot for the duration of the artificial intelligence revolution.
Image source: Getty Images.
The OG centerpiece of AI data centers
It's become such a commonly touted linchpin of the movement that it's almost become cliché. Nevertheless, Nvidia (NVDA +0.64%) deserves top billing on any list of AI stocks to consider stepping into.
The company's role in the matter is simple enough -- Nvidia makes the high-performance processors that serve as the brains of artificial intelligence platforms; most estimates still put Nvidia's company's share of the artificial intelligence processor market in the ballpark of 85%. No rival seems to be able to break its firm hold on the business, meaning it stands to ride the industry's projected growth.
Making AI practical to use
Hardware is only half of the AI story, though. Users also need a means of doing something constructive with all the mountains of digital data just waiting to be tapped.
That's what Palantir Technologies (PLTR 0.65%) offers. It's got four different user interfaces that allow users to harness the power of AI. Its AIP platform, for instance, helps workers within an office setting to custom-build their own automated workflows and apps to improve their own productivity. Meanwhile, its platform called Gotham supports data-driven decision-making for military combat situations.
NASDAQ: PLTR
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Priced at more than 200 times this year's expected per-share earnings of $0.58, Palantir stock is anything but cheap right now. With annualized growth rates of around 30% expected for at least the next few years, though, the premium price may well be worth it.
A whole new kind of computing
Although the vast majority of AI is still powered by traditional computers, a brand-new kind of computing platform is upon us. So-called quantum computing isn't limited by binary code's ones and zeros. By using the quantum mechanics of atomic and even subatomic particles, a computing platform can simultaneously process a near-infinite number of mathematical possibilities. Calculations that would have taken years to complete can now be finished in a matter of minutes. This solution, of course, has enormous implications for artificial intelligence.
A handful of companies are developing quantum computers. None are quite as far along or as focused as IonQ (IONQ 1.79%), though, which already commercialized the technology. The organization did $43 million worth of business last year, nearly doubling its top line, which is expected to nearly double again this year.
Already there
Software giant Microsoft (MSFT 1.21%) is still very much dependent on its Windows operating systems, its office productivity software, its Azure cloud computing platform, and even its Xbox video gaming franchise as profit centers.
Don't look past its foray into the consumer-facing artificial intelligence market, though. While its virtual AI assistant, Copilot, hasn't exactly dethroned market-leading ChatGPT in this space, Microsoft's existing omnipresence (by virtue of its hold on the enterprise software space) arguably leaves it in the best position to monetize such a tool. As of late last year, roughly two-thirds of large U.S. businesses were using Microsoft 365 Copilot in some way.
Specialist versus generalist
Microsoft's Copilot is a handy and powerful tool, to be sure. But, it's also a generalized assistant that might occasionally struggle to handle specific or more complex tasks. That's where C3.ai (AI 7.28%) shines. Although its tech isn't exactly well suited to serve as a general web search platform, the company offers more than 130 enterprise AI apps that can handle narrowly defined tasks like predicting when an aircraft component is about to fail, optimizing a retail store chain's product pricing, and shorten the amount of time needed to approve a consumer loan. As time marches on, institutions may figure out that these more specialized solutions are the kind of artificial intelligence tools they actually need.
Hiding in plain sight
It might be one of the least conspicuous names in the business, but International Business Machines, (IBM 1.94%) or IBM, is quietly waist-deep into the AI business in a handful of ways.
One of these ways is through its artificial intelligence platform, called Watson, which is being used by Samsung SDS America, Intel, Deloitte, and Vodafone, just to name a few, as a means of becoming more cost-efficient, improving results, or both. The company's generative AI book of business alone currently stands at (annualized) $6 billion.
NYSE: IBM
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The other chief way IBM is evolving as an artificial intelligence stock is the organization's foray into the quantum computing realm. While IonQ may be one of the earliest names in the market with a more modest platform, IBM is aiming for raw quantum computing power. It intends to build a 200-qubit platform by 2029, versus IonQ's current top-performing system consisting of only 36 qubits.
Let's not forget Alphabet
Since quantum computing has been put into focus here, know that Alphabet (GOOG 0.76%) (GOOGL 0.33%) is working on this tech as well. Late last year, it unveiled a quantum computer chip nicknamed Willow, with 105 qubits ready to be put to work.
It's still more of an experiment than a commercial offering, if the company decides to commercialize it at all -- it's possible Google could choose to use this high-powered computing platform strictly for its own purposes. Whatever the future holds on this front, though, the company's got the proverbial goods.
In the meantime, Google is making inroads with a more practical and marketable AI tool. While its Gemini remains a popular direct interface for anyone needing higher-level help from the World Wide Web and now serves on the order of 50 million users per day (according to numbers compiled by Business of Apps), users of Google's popular search engine are now regularly finding AI-powered responses to queries in their search results as well. If nothing else, this helps ensure Google's search tool remains a potent cash cow.
AI platforms are more than processors and software
What if the most important advancements on the artificial intelligence front weren't being driven by hardware powerhouses like Nvidia or software and interface providers like Palantir and C3? What if ushering in the next generation of artificial intelligence solutions was instead going to depend on the tech you never see or think about?
That's likely to be the case, putting a relatively small Marvell Technology (MRVL 3.71%) into the well-deserved spotlight.
In simplest terms, Marvell makes many of the components that connect -- and connect to -- the wall of motherboards that make up an AI data center. For instance, Its optical digital signal processors allow for the super-fast transmission of data using fiber-optic cables that can stretch for miles. But, it also manufactures custom processors for artificial data centers that don't require an often-expensive off-the-shelf solution from a provider like Nvidia. The company did nearly $5.8 billion worth of business last year and is expected to grow this figure by a hefty 43% this year.
Look beyond your corner of the world
You're almost certainly familiar with ChatGPT, Google's Gemini, and Microsoft's Copilot. You may also know that Facebook parent Meta Platforms now provides a similar tool, while X (formerly Twitter) offers a generative AI search tool called Grok. All of them seemingly have a respectable following relative to their age.
These aren't the only artificial intelligence search and virtual assistant options out there, though. These are just the ones you're familiar with because they're readily available in the Western world with little fuss or regulatory oversight. Asia has its own homegrown consumer-facing AI offerings, like DeepSeek, Alibaba's (BABA 1.57%) Qwen, and Baidu's Ernie.
NYSE: BABA
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Qwen may not be China's most popular artificial intelligence assistant, and it's certainly not the whole world's. But, much like Microsoft, Google, or Facebook, Alibaba has the advantage of already being there. Remember, Alibaba's Tmall and Taobao dominate China's and the region's e-commerce space, with commanding control of roughly half of China's massive online shopping market alone.
And now for something completely different
Finally, add Recursion Pharmaceuticals (RXRX 3.37%) to your list of the market's hottest artificial intelligence stocks.
Yes, this is a pharmaceutical outfit, but yes, it's also an AI name. The company uses artificial intelligence to predict how a particular drug might perform or plan how the underlying molecule might be best fabricated, saving time as well as money on clinical trials that may end in failure.
It's not a mere premise, either. The software exists. The company's so-called Recursion OS has access to 36 petabytes (36 million gigabytes) of proprietary scientific data that's not only being used by the company to develop its own drugs but also works in partnership with more conventional pharma players, like Roche and Sanofi, that recognize saving time and money allows a drugmaker to focus on more promising prospects.
This might help make the point: Recursion reckons that nine out of 10 intended drugs never make it past clinical trials despite a decade's worth of development and roughly $2 billion worth of R&D costs for each one. Recursion OS cuts these figures down to a fraction of their usual levels.
