Tech stocks are heating up on the promise of AI.
The technology sector needed something new and exciting to reinvigorate investor interest, and it got exactly that with the introduction of artificial intelligence chatbots.
In the last six months, AI has dominated the technology industry, along with discussions about education, the future of work, and life as we know it. Suddenly, people can write an essay, compose a song, draw a picture, and code a video game using a simple voice command.
Life as we know it is changing fast, with more disruptions in store. Some tech stocks are already benefitting immensely from the AI revolution, with their share prices hitting new highs, and, sometimes, more than doubling in price.
As we look to the future, here are three tech stocks that will reign supreme in the new world.
All this after NDVA crushed its first-quarter earnings and said that it is seeing “surging demand” for its chips from companies involved in artificial intelligence. Nvidia seems to be the stock of the moment as AI chatbots revolutionize life as we know it.
Specifically, Nvidia reported Q1 earnings per share of $1.09 versus 92 cents expected among analysts who cover the company.
Revenue in the quarter totaled $7.19 billion versus the forecast of $6.52. Perhaps most impressive, Nvidia said it expects sales of about $11 billion, plus or minus 2% in the current second quarter. That’s more than 50% higher than Wall Street estimates.
Nvidia CEO Jensen Huang said the company is seeing incredible demand for its microchips that enable generative AI.
Following the latest earnings, more than two dozen analysts revised up their price targets on NVDA stock.
Also integral to the AI revolution that is now underway is Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL). GOOGL has been working overtime since last fall to bring a host of new AI products to businesses and consumers.
The company held off on releasing powerful generative AI products to the public. That all changed when rival OpenAI unleashed ChatGPT on the world.
After initially slumping to start the year, GOOGL stock has taken off over the last month as the company has unveiled new AI products.
Year to date, Alphabet’s share price is now up 40% and trading near a 52-week high. At its latest I/O developer conference in early May, Alphabet showed off a host of new AI products. They included the PaLM 2 large language model, AI writing tools for email, enhanced translation features and a more immersive Google Maps.
The stock jumped sharply following the event.
Rounding out the tech companies that are likely to power us into a new AI world order is Microsoft (NASDAQ:MSFT). The software giant was quick to jump on the AI bandwagon.
It invested $10 billion in OpenAI and integrated artificial intelligence into its Bing search engine. While the rollout has not been without incident, but Microsoft is currently leading in the AI arms race.
It’s well-positioned to capitalize on the technology into the future.
While also slow out of the gate to start the year, MSFT stock has been galloping ahead in recent weeks and is now up 36% ytd and trading at a fresh 52-week high.
On the date of publication, Joel Baglole held long positions in NVDA, MSFT and GOOGL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.