Not too long ago, cryptocurrencies looked like one of the best investment opportunities, as bulls thought the digital system could eventually replace traditional payment methods. But the decentralized aspect of crypto has made it challenging to rely on its growth, with prices fluctuating sporadically.
Investors seem increasingly apprehensive about cryptocurrencies, with Bitcoin's price down 4% in the last six months and Ethereum's down 10%. Meanwhile, tech stocks have been on the rise. The Nasdaq-100 Technology Sector index is up 15% in the same period as Wall Street has grown bullish on the prospects of booming markets like artificial intelligence (AI).
AI has the potential to boost countless industries, including cloud computing, manufacturing, education, healthcare, and more. As a result, it's not a bad idea to invest in the high-growth market and profit from its long-term development. The sector will likely offer more reliable gains than the crypto market.
So, here are three AI stocks with more potential than any cryptocurrency.
Amazon's (NASDAQ: AMZN) stock has soared 66% year to date and has shown little sign of slowing. After experiencing repeated profit declines in its retail business in 2022, the company has come back strong this year.
Its North American segment reported more than $3 billion in operating income in the second quarter of 2023, a stark improvement from its $627 million in losses the year before. The company is massively benefiting from various restructuring moves and easing inflation.
In addition to an expanding e-commerce business, Amazon is investing heavily in AI. The company already has an edge as the home of the world's largest cloud platform, Amazon Web Services (AWS). Its clients include Netflix, Meta, and Sony.
Meanwhile, AWS' expanding library of AI tools could help it retain its lead in the cloud market and see the company significantly profit from the industry's long-term development.
Furthermore, Amazon is expanding its position in AI by venturing into chip development and investing in high-growth regions like India. The company is on a promising trajectory and could offer far more gains than any cryptocurrency.
2. Advanced Micro Devices
As a leading chipmaker, Advanced Micro Devices(NASDAQ: AMD) has massive potential in AI. The tech giant has lost ground to Nvidia this year as it beat most companies to the market with its lead in graphics processing units (GPUs). However, AMD will begin shipping what it describes as its most powerful GPU ever next year and has immense support across tech.
Many AI-minded companies have been calling for increased competition in the chip market to lower the cost of hardware, which is crucial for developing AI models. As a result, AMD has caught the eye of some of the world's biggest tech companies, including Microsoft(NASDAQ: MSFT). The company is reportedly backing AMD's chip expansion by providing engineering and financial resources.
Moreover, AMD acquired AI software firm Mipsology last month. The purchase is another tool that could bolster its long-term position in AI and help it create products to match Nvidia.
AMD's annual revenue has risen 265% in the last five years, with operating income up 180%. And its stock has skyrocketed 420% in that period. With the power of AI, there's no telling how far AMD could go in the next five years. Its stock is a better buy than any crypto option right now.
Microsoft has emerged as one of the most promising companies in AI this year. Its 2019 investment of $1 billion in ChatGPT developer OpenAI gave it a significant head start in the industry. It has since increased that investment by $10 billion, granting it a 49% stake in the start-up.
The tech giant has used OpenAI's technology to introduce AI updates to many of its digital products, such as Word, Excel, Azure, and Bing. The company is competing against Amazon in the cloud market.
However, it has nearly unrivaled dominance in productivity software, another lucrative area of AI. As more consumers and businesses seek AI tools to boost efficiency, Microsoft is well-positioned with a growing range of options.
The company will soon launch a variety of AI services in its 365 Office suite. The subscription-based platform has been a promising growth area for the company in recent years, with 365 revenue jumping 15% year over year in the fourth quarter of 2023. Introducing AI services could easily make Microsoft the go-to for anyone looking to increase productivity with the technology.
Shares have risen nearly 900% over the last decade. As the world's second most valuable company by market cap, the tech firm has proved its resilience time and time again. Its solid venture into AI has only strengthened the reliability of its stock, making it a screaming buy compared to any cryptocurrency.
10 stocks we like better than Amazon.com
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Dani Cook has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Amazon.com, Bitcoin, Ethereum, Meta Platforms, Microsoft, Netflix, and Nvidia. The Motley Fool has a disclosure policy.