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12 Generative AI Stocks to Watch as ChatGPT Soars (Updated 2024)
Can you invest in OpenAI's ChatGPT? Not directly — but these 12 companies offer exposure to AI chatbot technology.
The launch of OpenAI’s ChatGPT created a major buzz around artificial intelligence (AI) stocks.
ChatGPT is an AI chatbot software application that uses machine learning techniques to emulate human-written conversations. A hitherto niche subsector in the AI industry, this technology is called generative AI, and it's been making an impact on myriad industries, including marketing, security, healthcare, gaming, communication, customer service and software development.
While generative AI technology is in its early stages, Reid Menge, co-portfolio manager for the BlackRock Technology Opportunities Fund, sees immense potential. “ChatGPT is nearly as smart as the human brain today,” he said, “and with the computational horsepower being used to train these AI models, imagine the capabilities of these generative AI services by 2025.”
According to Grand View Research, the generative AI market is expected to grow at a compound annual growth rate of 34.6 percent between 2022 and 2030 to reach an impressive US$109.37 billion.
Although investors can’t directly take a position in privately owned OpenAI, several technology stocks offer exposure to the expected growth in generative AI technology.
Below, the Investing News Network showcases 12 technology stocks that stand to benefit the most from the rise in advancements and adoption of AI chatbot technologies and seven smaller companies that may be perfectly positioned to profit from their advancements in generative AI.
All market cap and share price data were current as of February 14, 2024.
Biggest generative AI stocks to watch
These 12 tech giants offer investors exposure to generative AI by offering their own chatbots and generative AI products, developing the hardware and software necessary for AI and integrating AI into their product.
1. Microsoft (NASDAQ:MSFT)
Market cap: US$3.04 trillion; current share price: US$409.49
After having initially invested at least US$3 billion in OpenAI a few years ago, the technology behemoth Microsoft reportedly committed to investing up to another US$10 billion in the chatbot creator in the years ahead.
Microsoft built its own AI solutions based on OpenAI's technology, Bing AI and Copilot. An update to Windows 11 in 2023 integrated Bing into the operating system's search bar, allowing users to query the chatbot directly with Microsoft's Edge browser, Chrome and Safari.
2. Alphabet (NASDAQ:GOOGL)
Market cap: US$1.82 trillion; current share price: US$145.94
Alphabet subsidiary Google’s conversational agent, formerly called Bard, was rebranded as Gemini on February 8. The name change was a nod to the AI model that powers it, which Google called its "largest and most capable AI model."
Also in February, Google introduced Gemini Advanced, a more sophisticated version of its chatbot, for US$20 per month as part of a new plan called the Google One AI Premium Plan. This plan includes the same benefits as the Google One Premium Plan, as well as more integrations for Google Apps, which will be released in the future. Gemini and Gemini Advanced can also be accessed on Android and iOS devices.
3. Amazon (NASDAQ:AMZN)
Market cap: US$1.78 trillion; current share price: US$170.98
Amazon subsidiary and cloud-computing platform Amazon Web Services (AWS) evolved out of Amazon’s transition from an online retailer to one of the world’s largest technology companies. AWS’s wide range of services includes computing, storage, databases, networking, analytics, machine learning and AI.
AWS has many AI business tools on offer across four verticals: AI services, AI platforms, AI frameworks and AI infrastructure. Generative AI is nothing new to Amazon, as the technology forms the basis of conversational experiences with Amazon’s all-too-familiar Alexa.
On September 28, 2023, AWS introduced Bedrock, a service that enhances software with generative AI capabilities such as turning text into images or creating text for blog posts, emails and documents. On November 29, the latest models from Anthropic, Cohere, Meta and Stability AI were added to Bedrock, along with the latest capabilities from Amazon Titan, which improves search results to deliver only the most contextually accurate results.
4. NVIDIA (NASDAQ:NVDA)
Market cap: US$1.83 trillion; current share price: US$739.00
NVIDIA is a pioneer and global leader in graphics processing unit (GPU) technology. The company designs these specialized chips used to train AI and machine learning models for laptops, workstations, mobile devices, notebooks, PCs and more. Its business model primarily focuses on gaming, automotive electronics, mobile devices and AI. The company also offers supercomputing processing capabilities to scientific researchers around the world.
Generative AI's explosive growth is driving the market for chips designed by companies like NVIDIA and Marvell (NASDAQ:MRVL), another chip-making giant, and Micron (NASDAQ:MU), a company that makes memory chips, which are another important component to training generative AI systems.
NVIDIA supported Meta Platforms in putting together its own AI supercomputer called the Research SuperCluster, which reportedly uses a total of 16,000 of NVIDIA's GPUs. NVIDIA is also working with Dell Technologies (NYSE:DELL) on AI applications for enterprises, ranging from language-based services to speech recognition and cybersecurity.
On February 12, the tech giant introduced its newest chip, the NVIDIA RTX 2000 Ada Generation, which offers faster performance, more memory and other advanced features.
5. Meta Platforms (NASDAQ:META)
Market cap: US$1.21 trillion; current share price: US$473.28
The giant behind Facebook, Instagram and WhatsApp is one of the most influential companies in tech, sharing ranks with the likes of Microsoft and Alphabet.
The company's platform, Meta Advantage, has a suite of generative AI products that use machine learning to streamline ad campaign generation and help businesses reach the right consumers.
In May 2023, the company introduced AI Sandbox, a virtual testing center for developing Meta AI products, some of which were later introduced at the Meta Connect Conference, like the image-generating Emu. At the event, the company also introduced a new updated version of its open-source language model, Llama 2, which was designed using fewer resources than ChatGPT.
Many of its generative AI products are still in their early stages, but the company has expressed its commitment to continued research within the generative AI sphere with an open-source approach to its software developments. In December, Meta unveiled a series of new AI-powered features for its products, including Ray-Ban Meta smart glasses with advanced AI functionality, as well as several new ways to enhance the user experience with Facebook.
6. Tesla (NASDAQ:TSLA)
Market cap: US$601 billion; current share price: US$188.71
The automotive company that brought self-driving cars out of sci-fi and into reality is now on a mission to develop advanced, generative autonomous vehicles using the massive amounts of data collected from its cars. Tesla's main goal is to develop a fully self-driving vehicle, but the company is also working on other AI initiatives like a bi-pedal autonomous Tesla Bot.
In July, the company said it was spending "north of a billion dollars" from mid-2023 until the end of 2024 on Dojo, a supercomputer that collects the data and uses it to train generative AI models that Tesla vehicles use to operate.
That same month, Tesla announced the formation of xAI, a new entity separate from X and Tesla, formed with the intent of using generative AI to "understand the meaning of the universe." The coalition is currently working on an LLM called Grok that can "answer almost anything" and even prompt users to ask specific questions.
7. Oracle (NYSE:ORCL)
Market cap: US$314.09 billion; current share price: US$114.26
Oracle is a tech company that's been around since the 1970s. In the early 2000s, it began buying up other software companies, and today it is one of the leading providers of cloud-based database management software. Its Oracle Cloud Infrastructure (OCI) Generative AI service was released on January 23.
The software uses Cohere’s platform to allow businesses to incorporate large language models (LLMs) into software they're already using. Oracle and Nvidia have been involved in a strategic partnership that would bring NVIDIA's full computing stack to Oracle OCI, accelerating AI innovation by bringing powerful generative capabilities to businesses across a broad range of industries.
8. Adobe (NASDAQ:ADBE)
Market cap: US$273.31 billion; current share price: US$604.66
Adobe has a suite of design software that makes up its Creative Cloud platform and began rolling out AI-powered software with machine-learning capabilities in 2022. In March 2023, the company launched its newest generative AI iteration, Adobe Sensei GenAI, which features a list of services designed to improve marketing and content creation workflows.
In March 2023, Adobe introduced Adobe Firefly, a new generative AI extension that enhances Adobe's creative programs with text-to-image generation, image editing and design capabilities. In October, generative AI capabilities were integrated with Adobe Express, a lightweight version of the company's advanced design tools.
9. Cisco Systems (NASDAQ:CSCO)
Market cap: US$204.31 billion; current share price: US$50.28
Multinational digital communications firm Cisco Systems is a leader in IT and communications networks. The company has a large portfolio of multi-cloud products and applications, alongside strong relationships with Azure, AWS and Google Cloud.
Cisco’s AI and machine learning offerings encompass a wide range of computing solutions for enterprises, including a focus on cybersecurity. Cisco has also brought to market new generative AI tools for IT professionals, including the AI Policy Assistant.
As previously stated, the company has fostered working relationships with several industry leaders, including NVIDIA, particularly in the area of AI infrastructure. On February 6, Cisco and NVIDIA announced a new partnership to build secure Ethernet-based infrastructure that will be sold through Cisco's channel.
10. SAP (NYSE:SAP)
Market cap: US$203.39 billion; current share price: US$177.47
SAP SE is a software company out of Walldorf, Germany, with a line of generative AI products that aid companies in resource planning. In September 2023, the company released Joule, a natural language generative AI assistant designed to streamline tasks and improve workflow. Joule is available in SAP’s complete cloud portfolio and can be seamlessly integrated into the company's entire line of business AI offerings.
To further research how cloud technology can support AI applications, SAP SE will be collaborating with UC Berkley's Sky Computing Lab, the company announced on January 30.
11. Intel (NASDAQ:INTC)
Market cap: US$186.84 billion; current share price: US$44.19
Intel produces microprocessors that power many of the world’s PCs and mobile devices. A household name, Intel continues to advance semiconductor design and is one of the world's largest semiconductor chip manufacturers in the world by revenue. Intel's Meteor Lake is the company's first consumer chip with a built-in neural processor for machine learning tasks.
Intel says its Trusted Media team is building generative AI “that improves people’s lives, limits harm and builds tools to make other technologies more natural.” One such example is an app developed in collaboration with the Taiwanese company Far EaseTone Telecom and a handful of Taiwan hospitals, which could detect laryngeal cancer.
12. IBM (NYSE:IBM)
Market cap: US$167.62 billion; current share price: US$183.57
IBM reportedly has one of the world’s largest AI research programs. The multinational tech company offers various AI solutions for cloud computing, IT operations, customer service, business automation, natural language processing and more. The MIT-IBM Watson AI Lab, a collaborative effort between the two establishments, works to advance research in healthcare, security and finance.
IBM has also been working with the Defense Advanced Research Projects Agency to build tools capable of defending AI models from cyberattacks.
On February 6, the company announced that a cluster of its AI chips will be installed at the University at Albany, the first step in one of many to further research in AI. This makes the first use of IBM chips on a university campus
Other generative AI stocks to watch
The following companies have not yet reached the market capitalization of our top 12, but are each worth tens of billions of dollars and have made some amazing achievements in generative AI technology in their own right, making them interesting prospects for investors.
In descending order, they are:
- Juniper Networks (NYSE:JNPR), a company that develops and markets routers, switches, network management software, network security products and software-defined networking technology. In 2021, the company introduced AI services to its networking technology, and on January 29 the company unveiled the industry's first AI-Native Networking Platform.
- CrowdStrike (NASDAQ:CRWD), a cybersecurity provider that monitors and analyzes Internet activity, detecting threats and blocking attacks with its generative AI-powered security analyzing software, Charlotte AI. This service is available to every Falcon user and provides real-time feedback on a company’s risk landscape.
- Palantir (NYSE:PLTR), a data-mining platform for government agencies. On October 10, the company issued a press release announcing a two-year contract with the US Department of Defense to continue its research and development of generative AI and machine learning technology used for national defense.
- DynaTrace (NYSE:DT), a data-analysis company that provides real-time feedback on IT infrastructure for various companies using its generative AI assistant, Davis. The company recently released its Q3 results, which beat revenue expectations by 2.1 percent and profit forecasts by 40 percent.
- C3.ai (NYSE:AI), a company providing software as a service product to the financial and oil and gas industries. Its partnership with Alphabet allows C3.ai generative AI applications to be available on Google Cloud.
- UiPath (NYSE:PATH), a software company with roots in Romania and headquarters in New York. UiPath designs robotic process automation software to reduce or eliminate boring or repetitive tasks like data extraction and file management, saving companies in a wide range of industries hundreds of hours thanks to its AI and generative AI software.
- MicroStrategy (NASDAQ:MSTR), a data warehouse that uses generative AI to provide companies with analytical reports to help them make more informed and lucrative decisions.
FAQs for generative AI
What is generative AI?
Generative AI is an emerging AI technology based on deep learning models and algorithms that can generate text, images or sounds in response to prompts given by users.
What are generative AI examples?
Some of the most notable examples of generative AI are ChatGPT, DALL-E 2, Midjourney, Stable Diffusion, Bard and Bing AI.
OpenAI's DALL-E 2 is an AI system that can create realistic images and art from a description in natural language. Similar to DALL-E 2, Midjourney generates images from prompts. Stable Diffusion is a latent text-to-image diffusion model capable of generating photo-realistic images given any text input. Microsoft's Bing AI is a feature of the Bing search engine that leverages the same technology as ChatGPT.
What are the hottest generative AI startups?
According to technology and business magazine e-Week, in addition to ChatGPT creator OpenAI, some of the other leading generative AI startups include Hugging Face, Synthesis AI, Jasper and Cohere.
This is an updated version of an article first published by the Investing News Network in 2023.
Don't forget to follow us @INN_Technology for real-time news updates!
Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.
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Meagen moved to Vancouver in 2019 after splitting her time between Australia and Southeast Asia for three years. She worked simultaneously as a freelancer and childcare provider before landing her role as an Investment Market Content Specialist at the Investing News Network.
Meagen has studied marketing, developmental and cognitive psychology and anthropology, and honed her craft of writing at Langara College. She is currently pursuing a degree in psychology and linguistics. Meagen loves writing about the life science, cannabis, tech and psychedelics markets. In her free time, she enjoys gardening, cooking, traveling, doing anything outdoors and reading.
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Meagen moved to Vancouver in 2019 after splitting her time between Australia and Southeast Asia for three years. She worked simultaneously as a freelancer and childcare provider before landing her role as an Investment Market Content Specialist at the Investing News Network.
Meagen has studied marketing, developmental and cognitive psychology and anthropology, and honed her craft of writing at Langara College. She is currently pursuing a degree in psychology and linguistics. Meagen loves writing about the life science, cannabis, tech and psychedelics markets. In her free time, she enjoys gardening, cooking, traveling, doing anything outdoors and reading.
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