Key points to remember
- A number of products have been launched in the artificial intelligence (AI) space that are considered game changers (ChatGPT for example).
- Although the year has been filled with innovations in the field of AI, we cannot ignore that many stocks in this industry have seen their value decline due to macroeconomic factors.
- Companies like Lemonade and C3.ai have seen their stocks fall, but they could come back in 2023 if the economy avoids a recession.
Many would describe 2022 as a breakthrough year for AI stocks. We’ve seen new technology that lets you create AI-generated art from a text prompt. You can have the AI create a poem for you or write a summary of any topic under the sun.
That said, artificial intelligence stocks suffered in 2022 as the economy struggled with runaway inflation and aggressive rate hikes designed to counter it.
The year 2022 has also seen a wave of layoffs in the technology sector and has seen the value of some of the world’s biggest companies drop significantly. We’ll be looking at AI stocks to see if they can rebound in 2023.
What’s going on with artificial intelligence?
We recently wrote about ChatGPT and DALL-E 2, two innovative launches that were considered groundbreaking for consumer AI. This will impact many industries in 2023 as we determine how best to proceed with these new tools from a legal and business perspective.
It almost feels like you can’t run a successful business without using some AI-related technologies. While there have been many breakthroughs in AI, the tech industry as a whole has struggled.
Will AI stocks rebound in 2023?
As we’ve seen, 2022 has been a turbulent and challenging year for many tech companies. We have seen some of the biggest companies in the world lose value. There are a few factors to consider when it comes to AI stocks.
Fears of a recession
We cannot ignore the impact of soaring inflation and fears of a recession due to constant rate hikes which make the cost of money more expensive in the economy. These macroeconomic forces have even impacted companies that reported strong financial results in 2022. If there is an officially declared recession in 2023, then it would be difficult for companies in the AI sector to raise the bar. .
There are no publicly traded companies that only focus on AI innovations like Google focuses on search engines or Tesla on electric vehicles. Various companies are investing in the space and deploying AI across their business operations. For most companies, AI is a substrate within a larger technology stack.
Industries that have relied on AI range from oil companies to financial services, so your returns on AI investment will depend on the industry you invest in, as you cannot ignore the importance of AI. machine learning in all fields.
It will be fascinating to see how the power of AI technology will be used in our daily lives in the future. Fortunately, there are plenty of ways to invest in AI. According to Zion Market Research, the global AI industry is expected to reach $422.37 billion by 2028, from $59.67 billion in 2021.
Best companies in AI
Here are some top companies that have made progress using AI technology. These five companies are involved in other industries, but they have used AI to grow their respective businesses. We’ll be looking at stock prices at the close of December 28, 2022 to see how these companies have fared this year.
Microsoft Corp. (MSFT)
Microsoft recently launched Microsoft Designer, a graphic design application that uses AI to create social media graphics and images. Microsoft also manages Azure, which is a portfolio of AI-related services. The company even announced a partnership with Meta to deliver the workplace of the future. Microsoft shares are trading at $234.53, down about 28% for the year.
The parent company of Google and YouTube uses AI in virtually every aspect of its business. Alphabet also owns DeepMind, which is working on many spectacular innovations that might even read your mind one day.
We see the power of Alphabet in our daily lives, from the Google Home smart speaker to navigation maps to the precision with which our photos are organized on our phones. Alphabet shares are currently trading at $86.02, down about 39% for the year.
You can’t write about investing in AI without talking about the company hosting its own annual AI Day designed to attract the best talent in the industry. With the promise of a humanoid robot and a robotic taxi service, the electric vehicle manufacturer is betting on AI. Tesla shares are currently priced at $112.71, down 69% for the year.
Nvidia Corporation (NVDA)
This technology company, based in Santa Clara, Calif., is one of the leading AI platform companies because its new Volta technology is designed for deep learning. Big tech companies like Google and Meta use Nvidia’s GPUs. NVDA shares are currently trading at $140.36, down about 52% for the year.
Amazon.com, Inc. (AMZN)
The power of AI technology is found in every aspect of Amazon’s business, from the personalized shopping experience to the Alexa speaker many people have in their homes. Amazon shares are currently trading at $81.82, down nearly 52% for the year.
Artificial intelligence stocks to invest in for 2023
There are AI stocks worth investing in or keeping an eye on as we enter the new year. These companies are investing heavily in the AI space, but have seen stock prices fall in this turbulent year in the markets.
Lemonade is the first almost entirely AI-powered insurance company. While insurance companies have traditionally been known for slow claims filing and everything else, Lemonade relies on AI for everything from customer service to claims handling. The company has rigorously trained AI to improve the customer experience.
Shares of Lemonade currently trade at $12.91, with the stock price down about 69% for the year. However, according to third quarter financial results, the company has more than 1.77 million customers with an average premium per customer of $343. This company is worth watching because no matter what is happening in the economy, people always need insurance.
C3.ai Inc. (IA)
C3.ai delivers enterprise AI in the form of made-for-you and custom apps for clients looking to drive digital transformations. The company has basically created a new industry by providing customized solutions in different industries. They make money creating AI-powered solutions and software for companies looking to go digital or improve any aspect of business. For example, Shell has released more than 100 C3.ai AI applications every year. The power of AI has helped Shell perform predictive monitoring to accurately determine when to repair certain parts.
Shares of C3.ai are currently trading at $10.26, with the share price down around 68% for 2022. However, major tech companies like Amazon and Alphabet have partnered with C3.ai to boost cloud services. The company is also shifting to a consumption-based model to generate revenue to accelerate growth.
Upstart Holdings Inc. (UPST)
Upstart uses AI to analyze potential borrowers to determine their creditworthiness. The company does not lend money, but it works with banking partners capable of issuing loans.
Upstart is currently trading at $12.25, which means the stock is down around 91% for 2022.
Upstart’s revenue grew 264% from 2020 to 2021, and the company generated $849 million in revenue, but that figure is expected to drop to $830 million in 2022. If it turns out the economy can rebound in 2023, they could see its business recovery. Upstart has also seen many banks, credit unions, and car dealerships start using its services.
As always, it is important to do your due diligence before investing your money in any of these companies. With stock prices falling in 2022, now might be the time to start investing in these companies if you’re a fan of the power of AI.
Q.ai is Artificial Intelligence for investing
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