Three big artificial intelligence stocks to buy feature technology titans.
The three artificial intelligence stocks to buy put the spotlight on industry icons that have rallied so far in 2023 as the technology sector has soared into bull-market space after a poor performance in 2022. Investors who can accept the ups and downs of volatility may be best suited for purchasing stocks that are gaining a lift from artificial intelligence advances.
Aside from investors, governments are gaining interest in artificial intelligence with some of them exploring how to regulate the industry. Technology entrepreneur Elon Musk, the owner and CEO of Twitter, Inc. (NYSE: TWTR), CEO of Tesla Inc. (NASDAQ: TSLA) and founder and CEO of privately held SpaceX, told listeners of a recent podcast with presidential candidate Robert F. Kennedy Jr. that China is looking into regulating artificial intelligence.
Despite inflation, a tight Fed money supply and a brewing banking crisis after several recent financial institution failures, the NASDAQ Composite’s tilt toward technology has led to a 29.4% year to date, as of June 20. For those who define a bull market as one that jumps at least 20%, the technology sector has passed the threshold and keeps climbing.
Skousen Champions Artificial Intelligence Investments in 2023
An avowed advocate of technology stocks involved in artificial intelligence is Mark Skousen, PhD, an economist who serves as a Presidential Fellow at Chapman University and leader of the Forecasts & Strategies investment newsletter. Skousen, who is a descendant of founding father, diplomat and inventor Benjamin Franklin, also is accomplished forecaster who recommended Technology Select Sector SPDR Fund (NYSE: XLK) in Forecasts & Strategies. That fund has jumped 38.54% so far in 2023 through June 20.
Mark Skousen, head of Forecasts & Strategies, meets with Paul Dykewicz.
The Technology Select Sector SPDR Fund offers a current dividend yield of 0.8%. Professor Skousen shared its secret: the fund’s holdings are heavily weighted toward some of the most successful technology stocks so far in 2023, such as Microsoft (NASDAQ: MSFT), climbing 40.83%; Apple (NASDAQ: AAPL), soaring 42.68%; and NVIDIA (NASDAQ: NVDA), zooming 192.19%.
Skousen, who also heads the TNT Trader advisory service that recommends both stocks and options, instructed his followers to take a profit on May 25 of 323.96% by selling call options in Nvidia Corp. that he recommended on May 2. The stock rose 34% in just a few months during the time Skousen recommended it, while the options sold in parts at varying levels to produce an average gain during the same time of 196%.
Microsoft Heads Three Big Artificial Intelligence Stocks to Buy
AI is starting to drive revenue growth at Redmond, Washington-based Microsoft and is boosting use of the company’s many apps, company officials said. One example is that Microsoft’s Bing web browser has quadrupled its downloads since Microsoft added an AI-aided chatbot.
Microsoft reported better-than-expected results for its fiscal third quarter, with its Microsoft Cloud up 25%. Now in its fiscal fourth quarter, Microsoft faces pressure from the macro environment, according to the Chicago-based investment firm William Blair. Microsoft’s management seemed more upbeat compared to prior earnings calls, the investment firm added.
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Though growth of Microsoft Azure is expected to keep slowing, it still should reach mid-20% growth in the fourth quarter, with demand for AI infrastructure proving to be a tailwind, William Blair wrote in a recent research note. Microsoft’s tool consolidation sales pitch is “resonating” with cost-conscious customers who want to reduce the number of products and vendors they use in areas like collaboration, software development, security and workflow management, the investment firm wrote.
“While the company is not yet out of the woods in terms of a slowing demand environment, as it laps tougher comps from fiscal 2022 and as demand for AI-based services becomes a more material tailwind, we continue to see healthy growth ahead and upside potential for the stock,” William Blair wrote.
Intel Joins Three Big Artificial Intelligence Stocks to Buy Gradually
Skousen recommends Flying Five stocks in his Forecasts & Strategies investment newsletter each year and the top performer so far in 2023 is chipmaker Intel (NASDAQ: INTC), of Santa Clara, California. In the August issue of his newsletter each year, Skousen chooses five Dow stocks that have the lowest price from a list of the 10 highest-yielding Dow stocks.
Intel’s share took off last week when it zoomed 16.1%, after announcing deals in Germany and Israel. It marked the stock’s best week since July 17, 2009, when shares rose 17.1% in that five-day period after the chip maker reported a better-than-expected quarter and outlook, according to FactSet data. The stock has leaped 34.28% since the start of the year through June 20.
Last Friday, Morgan Stanley analyst Joseph Moore raised his price target on Intel to $38, up from $31, while keeping an equal weight rating on the shares.
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“The bears are on the run,” Skousen quipped to his Forecasts & Strategies subscribers. As they say on Wall Street, “Bull markets climb a wall of worry,” wrote Skousen, quoting his own “Maxims of Wall Street,” book (www.skousenbooks.com).
“Monetarists like Steve Hanke and Timothy Congdon are predicting a severe recession in 2023-24 due to the Fed’s tight money policy,” Skousen opined. “The broad-based money supply (M3) is actually declining.”
Skousen, a proponent of the Gross Output (GO) indicator of economic growth that includes intermediate stages of production, said recent data have shown slowing growth in the United States and the global economy. First-quarter GO will be released on Thursday, June 29.
A recession is quite possible, Skousen conceded, but the technology bull market is still intact, aided by “robust corporate earnings” and a gradual decline in price inflation, especially gasoline prices.
Tech Wave Lifts Three Big Artificial Intelligence Stocks to Buy
“When a tech wave like this is roaring into shore, it behooves investors to jump on it early,” said Jim Woods, who heads the Intelligence Report investment newsletter and the Bullseye Stock Trader advisory service that offers both stock and option recommendations.
Paul Dykewicz meets with Jim Woods, head of Bullseye Stock Trader.
Woods has amassed a quick track record of success in recommending profitable stock and option trades in artificial intelligence stocks. For example, he recently reaped rewards from the rapid rise of C3.ai Inc. (NYSE: AI) and Rambus, Inc. (NASDAQ: RMBS). He produced a 167.20% gain on AI July 21 $25 call options in just 31 days. Woods also achieved an 83.10% profit in RMBS Aug. 18 $50 call options in only 13 days. Both recommendations came in his High Velocity Options trading service. That service only recommends options aimed at producing quick profits.
Connell Chooses Oracle as One of Three Big Artificial Intelligence Stocks to Buy
Michelle Connell, who heads the Dallas-based Portia Capital Management, commented on a TDAmeritrade Network program aired Monday, June 12, about Oracle (NYSE: ORCL), a computer technology company headquartered in Austin, Texas. Connell commented about the company’s latest earnings report when it handily beat projections.
The AI “performance train” continues and Oracle wants to be the “Netflix of AI,” Connell opined. Intel’s stock is now up 54.37% year-to-date and 27.69% in just the past month
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“Two-thirds of Oracle’s revenues come from their cloud infrastructure products,” Connell commented. “Companies that use AI or make AI software review millions of pieces of data. Having the ability to store that data in the cloud is critical and companies are bulking up on their capacity. Oracle is thought to have the most economic cloud infrastructure platform for AI.”
Michelle Connell heads Portia Capital Management.
Since the stock reported results on June 12, several Wall Street analysts increased their estimates and price targets. However, the new average price target is $120 per share while the stock hovers around $125. Thus, it seems overvalued — especially over the next several months, Connell counseled.
The stock is getting pretty expensive here, Connell cautioned. Its current price-to-earnings (P/E) ratio is 41, even though its average P/E is 26, she added.
“But now, it’s a case of what we do not know,” Connell said. “And what we do not know is ORCL’s potential in the AI arena. It could be huge.”
The stock looks compelling from a long-term view, Connell continued. Its estimated revenue for 2026 is in the $65 billion range. That’s a 50% increase from the 42 million it produced in 2022, Connell added.
Investors should consider buying Intel shares on pullbacks, Connell counseled.
“When the Federal Reserve stops ratcheting up interest rates, I would expect strong growth stories to continue to profit,” said Connell. “On the other hand, forecasts that the Fed may raise rates further later this year warrant caution for technology investors, if those increases occur.”
With Russia’s invasion of Ukraine spurring a budding counteroffensive by the country under attack, the ongoing war adds political risk for investors. Nonetheless, investors eyeing the three big artificial intelligence stocks to buy have a path to profit if they choose to pursue it sooner or later.
Paul Dykewicz, www.pauldykewicz.com, is an award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal omf Commerce, Crain Communications, Seeking Alpha, Guru Focus and other publications and websites. Paul can be followed on Twitter @PaulDykewicz, and is the editor and a columnist at StockInvestor.com and DividendInvestor.com. He also serves as editorial director of Eagle Financial Publications in Washington, D.C. In that role, he edits monthly investment newsletters, time-sensitive trading alerts, free weekly e-letters and other reports. Previously, Paul served as business editor and a columnist at Baltimore’s Daily Record newspaper and as a reporter at the Baltimore Business Journal. Plus, Paul is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The uplifting book is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many other sports figures. To buy signed and specially dedicated copies, call 202-677-4457.
