The search for AI stocks is on. Indeed, artificial intelligence is no longer just a buzzword. This disruptive sector is a rapidly growing space, transforming how we live and work. Indeed, from self-driving cars to personalized healthcare, AI stocks are disrupting traditional industries and creating new investment opportunities. This article will highlight three high-growth AI stocks that investors should consider adding to their portfolios. 

These companies have strong fundamentals, innovative technologies, and solid growth prospects. That makes these stocks attractive investment options for those looking to capitalize on the AI revolution. Whether you’re a seasoned investor or just starting, these AI stocks offer a compelling investment opportunity that you won’t want to miss.

C3.ai (AI)

First on this list of AI stocks is C3.ai (NYSE:AI), a company that is lucky enough to hold the “AI” ticker symbol. C3.ai is a company that specializes in enterprise AI, offering its clients an extensive suite of applications through its robust software-as-a-service (SaaS) model. Notably, the company’s suite of applications is broad, which allows its users to speed up their AI transformations. The tailored applications provided by C3.ai help its clients with various tasks, such as data analysis, risk management, optimization, and more. Impressively, it’s estimated that the AI platform will experience revenue growth of more than 33% over the next three years.

C3.ai reported impressive financial results in its previous fiscal quarter. The company’s revenue increased 7% year-over-year, reaching $64.2 million. Additionally, subscription sales grew by 26% to $59.5 million. Although C3.ai currently operates on a smaller scale, its gross margins are already above 65%. Accordingly, a number of analysts are calling for the company’s margins to increase to more than 85% as the platform scales up. Furthermore, the company’s AI solutions are applicable across multiple industries, which gives it an advantage and makes it a promising long-term investment option. 

Despite being in the early stages of its growth, C3.ai’s potential for scalability and versatility in the AI industry makes it an exciting opportunity for investors.

Microsoft (MSFT)

OpenAI, which developed ChatGPT, is not publicly traded, so investors cannot purchase its shares directly. However, investors can invest in Microsoft (NASDAQ:MSFT), which has invested over $10 billion in OpenAI and integrated ChatGPT into its Bing search engine.

Microsoft’s recent advancements in AI technology have positioned the company as a frontrunner in the ongoing AI arms race within the tech sector. Therefore, investing in Microsoft is the closest alternative to investing in OpenAI for those looking to capitalize on the growth of AI technology.

Microsoft finalized its acquisition of Nuance Communications for $19.7 billion in March 2022. Nuance is recognized as a top voice recognition software provider and conversational AI technology. Microsoft’s acquisition of Nuance, announced in April 2021, gives the company a more substantial presence in the healthcare industry.

While my current analysis suggests Microsoft stock may be overvalued after its recent run, this is a stock to watch. I think a new base should be established, with more favorable market conditions, before this stock makes sense to add to. However, on any significant pullbacks, this is among the top AI stocks worth buying shortly.

Upstart (UPST)

Upstart Holdings (NASDAQ:UPST) leverages artificial intelligence to assist banks in improving their lending decisions. The innovative fintech firm impressed investors by delivering a series of consecutive quarters with triple-digit revenue growth in 2021. Consequently, its share price skyrocketed more than 10x within the ten months following its IPO at the end of 2020. However, the situation took a negative turn afterward.

Upstart is currently facing myriad economic challenges. Its attempts to replace the traditional credit score system with AI technology are being met with resistance from lenders who are hesitant to change during an already tumultuous period.

Nevertheless, the company’s current stock valuation at 1.8 times sales could be considered a bargain if it generates significant revenue growth. As a result, investors willing to take on some risk may want to invest in this growth-oriented stock, albeit with caution. Thus, investors may want to start small in building a position to play it safe. I believe a 2% or 3% stake should be enough to capture significant upside with one of the most beaten-down AI stocks.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.