It is simple to understand why artificial intelligence (AI) is a popular investment theme right now. Thanks to ChatGPT, AI is experiencing its “iPhone moment,” in which we all realize that the technology will have a significant impact on our lives.
It is currently impossible to invest directly in ChatGPT because it is owned by OpenAI, which is not publicly traded. Nonetheless, numerous equities provide exposure to the technology. In light of this, here is how I’m investing in the AI revolution led by ChatGPT.
Fueling artificial intelligence technology
My top pick for exposure to artificial intelligence is Nvidia (NASDAQ: NVDA). It creates high-performance computation hardware intended to accelerate computer processing periods.
To function, AI requires an enormous quantity of computing capacity. And currently, nearly all of the industry’s major companies, including OpenAI, use Nvidia products to operate their applications. Therefore, the company is truly at the forefront of the AI revolution.
Nvidia’s downside is that its stock is extremely volatile. In the past year, it decreased by approximately 50%. This year, it has roughly doubled. As a long-term investor, I am unconcerned by this degree of volatility. However, it will not be suitable for everyone.
I would not purchase Nvidia stock today, given its enormous run-up this year, I will note. The current valuation is quite substantial.
Nonetheless, I anticipate a pullback at some point. I will then attempt to strengthen my position.
ChatGPT expenditures
Microsoft (NASDAQ: MSFT) is another essential AI holding for me. It provides a comprehensive AI platform with robust developer tools and services. It is also a co-owner of ChatGPT, having invested over $10 billion in the technology.
Microsoft has benefited from its investments in ChatGPT by integrating the technology into its Bing search engine platform. This is resulting in enhanced platform usage.
Some analysts believe that Bing could theoretically acquire a sizeable portion of Google’s market share thanks to its powerful new features. However, it is difficult to predict if this will occur.
This stock has also experienced a tremendous run this year. Year-to-date, it is up approximately 30%. I intend to increase my position eventually, but I will wait for a retracement before doing so.
An AI superpower
Lastly, we have Alphabet (GOOG: NASDAQ). This entity owns Google.
In the last few decades, Alphabet has made dozens of AI-related acquisitions, including the United Kingdom’s DeepMind. As a consequence, it is currently one of the largest participants in the AI industry.
Some investors believe Alphabet is falling behind ChatGPT in the AI contest. However, I believe it is still early days.
Bard, Alphabet’s own AI-powered messaging platform, was published recently. Now accessible in more than 180 countries and territories.
And this week, the company informed investors that it is integrating potent new AI features into its search product to simplify complex inquiries by combining results from multiple sources.
Now this is an AI asset that I would gladly purchase today. Currently, it is considerably below its all-time high, and I find the valuation quite attractive.
If I did not already hold a substantial position in the company, I would invest immediately.
The article How I’m Investing in the AI Revolution Led by ChatGPT appeared first on The Motley Fool UK.
