Move Over Microsoft: 2 AI Stocks to Consider Investing in

Interest in artificial intelligence (AI) soared after the launch of ChatGPT by OpenAI in November 2022. The industry is growing rapidly and is expected to expand at a compound annual growth rate of 37% through at least 2030, potentially reaching close to $2 trillion by the end of the decade.

This excitement over AI has led to significant increases in various tech stocks. One notable winner is Microsoft (NASDAQ: MSFT), with its shares rising 56% in the past 12 months. Microsoft, as one of the largest investors in OpenAI, has exclusive access to some of the start-up’s most advanced AI models, making it an exciting AI investment option. However, companies at earlier stages in their AI endeavors, like Advanced Micro Devices (NASDAQ: AMD) and Amazon (NASDAQ: AMZN), may have greater long-term growth potential.

Based on future earnings estimates, Microsoft’s stock may rise by 35% by fiscal 2026. However, companies like AMD and Amazon, with higher forward price-to-earnings ratios and substantial growth potential, could be more attractive AI investment options.

1. Advanced Micro Devices

AMD’s stock has already seen a 111% increase this year, reflecting the company’s potential in AI. AMD aims to challenge Nvidia in the AI chip market and is also focusing on AI-powered PCs, which are expected to see a considerable increase in demand according to industry reports.

2. Amazon

As a leader in e-commerce and cloud computing, Amazon has numerous applications for AI that can enhance its business. The company has been expanding its cloud platform, AWS, to provide a variety of AI tools. Additionally, Amazon is well-positioned to leverage AI for improved customer experience and product recommendations on its retail platform.

With significant growth potential in earnings per share and a strong financial position, Amazon presents an attractive investment opportunity in the AI sector, potentially outperforming Microsoft in the long run.

For more information and detailed stock recommendations, please visit the original article on The Motley Fool’s website.