Top 3 AI Stocks Demonstrating Lasting Worth for Investors

Published November 21, 2023

As we grapple with the advancements of 2023, AI has become a buzzword, capturing the imagination and focus of the corporate world. Amidst the whirlwind of claims surrounding AI's benefits, investors are on a quest to uncover stocks that not only ride the AI wave but can sustain growth and yield long-term benefits. A practical way to assess such stocks is by their proven track records where AI has not just been a flashy addition but has driven real progress within the company.

The crux of these three companies' investment appeal lies in their intrinsic use of AI technology to augment their operations. Amazon, Alphabet, and UiPath are the front-runners, having integrated AI into their systems successfully and evidencing how it can enhance their business models.

1. Amazon

Amazon's operational efficiency owes much to AI, with robotic helpers populating its warehouses. These robotic assistants, numbering over 750,000, are vital in ensuring Amazon maintains its dominant 38% hold of the US e-commerce market by facilitating rapid shipping, sometimes even on the same day.

This AI technology isn't limited to warehouse robots. Amazon aids third-party sellers in crafting their product listings on its platforms, bolstering sales significantly. Additionally, Amazon's lucrative cloud computing arm, AWS, extends AI tools to its users, allowing them to harness AI's power, thereby cementing customer loyalty even as rivals like Alphabet's Google Cloud vie for market share.

2. Alphabet

Alphabet takes a holistic approach, imbibing AI into its multitude of services—ranging from Google search and ads to YouTube and Google Cloud. With CEO Sundar Pichai acknowledging AI's paramount importance, it's no wonder Alphabet leads in AI adoption, with a staggering 80% of advertisers employing one of its AI products. These services played a pivotal role in Alphabet's $59.6 billion ad revenue for Q3, making up a significant portion of the company's total revenue.

Further, Google Cloud's focus on incorporating generative AI models marks the company's commitment to staying at the forefront of AI-based cloud services, an area of substantial growth as seen in its Q3 revenues.

3. UiPath

UiPath has carved its niche by leveraging AI to scrutinize and optimize business processes. For example, UiPath's AI might automate a bank's loan processing, thereby enhancing operational efficiency. This resonates well with the market, as reflected in their customer growth from under 3,000 in 2019 to nearly 11,000 in 2023.

Revenue growth follows suit, with noticeable jumps in their financial reports. While yet to turn a profit, UiPath's drop in losses and improvement in free cash flow offer signs of a company closing in on profitability, riding on the back of AI innovation.

In the grand scheme, the future looks bright for AI, with projections of extensive market growth. Amazon, Alphabet, and UiPath are set to capitalize on these trends, giving investors solid opportunities to partake in AI's fruitful journey.

Amazon, Alphabet, UiPath