Today, when looking for some of the best sectors to invest your funds in, Artificial Intelligence is an industry that could not be missed. With new and revolutionary solutions almost every month, AI is proving to be one of the most fruitful innovations of mankind. This is also why the global AI technologies market is expected to reach a valuation of USD 1.8 trillion.
This makes it a ripe time to invest in AI and benefit from its growth. However, determining the best AI stocks can become challenging. Therefore, this article will cover some of the best AI stocks you should consider investing in 2024.
Best AI Stocks in India 2024 as per Analyst Ratings
Various stock analysts judge and compare stocks to determine the most promising ones. Based on analyst ratings, here is a list of some of the best Indian AI stocks.
|
Company Name |
Analyst Ratings | ||
| Buy (%) | Hold (%) | Sell (%) | |
| Affle (India) | 67 | 22 | 11 |
| Zensar Technologies | 50 | 50 | 0 |
| Persistent Systems | 46 | 33 | 21 |
| Bosch | 25 | 25 | 50 |
| Oracle Financial Services Software | 100 | 0 | 0 |
Affle India
Affle (India) Ltd is a mid-cap stock specialising in marketing consulting services. It uses a consumer intelligence platform to drive user engagement and transactions through mobile advertising. As of May 30, 2024, the company’s market capitalisation stood at Rs. 162.65 billion, with a stock price of Rs. 1,160.65.
This stock has demonstrated a strong one-year return of 24.03% and a net profit margin of 20.96%. These indicators of profitability and growth suggest a promising outlook for continued price appreciation.
Zensar Technologies
Zensar Technologies is a company specialising in software and infrastructure services. It offers a range of information technology solutions. As of May 30, 2024, Zensar Technologies had a market capitalisation of Rs. 143.46 billion and a stock price of Rs. 632.85. The company’s one-year return stands at 16.69%, with an impressive net profit margin of 30.12%.
This small-cap AI stock demonstrates promising profitability. Its debt-to-equity ratio of 13.48% supports it, which is slightly below the industry average of 13.64%.
Persistent Systems
Persistent Systems is a software service provider that offers comprehensive product life cycle services. As of May 30, 2024, the company had a market capitalisation of Rs. 538.63 billion and a stock price of Rs. 3,536.00.
In one year, this stock has given its holders a return of 23.34% and a net profit margin of 64.65%. Moreover, the company is demonstrating strong profitability, with its market share rising significantly from 11.78% to 15.08% over the past five years.
Bosch
Bosch is a large-cap company that specialises in the manufacturing and trading of automotive products. As a leading supplier of technological services, Bosch operates in mobility solutions, industrial technology, consumer goods, and energy and building technology sectors. As of May 30, 2024, the company had a market capitalisation of Rs. 906.78 billion and a stock price of Rs. 30,764.40.
This company has also posted a one-year return of 35.82% and maintains a net profit margin of 28.08%. In fact, over the past five years, it has sustained a debt-to-equity ratio of 0.5%, significantly lower than the industry average of 73.51%.
Oracle Financial Services Software
Oracle Financial Services Software is a mid-cap AI stock that provides comprehensive solutions for the financial services industry. Its products are devised for corporate, retail, investment banking, and treasury operations. As of May 30 2024, the company had a market capitalisation of Rs. 649.28 billion and a stock price of Rs. 7,491.90.
Oracle Financial Services Software Ltd boasts a one-year return of 21.05% and a net profit margin of 23.58%. Notably, this AI stock achieved an impressive return of 156.53%, with a debt-to-equity ratio of 0.97%. This ratio is also significantly lower than the industry average of 11.01%.
Top Artificial Intelligence Stocks in India in 2024 as per Market Capitalisation
Market capitalisation, also known as market cap, is the total value of a company’s outstanding shares of stock. To calculate it, multiply the current share price by the total outstanding shares.
Market capitalisation is a figure that measures the company’s size based on its stock market valuation. Companies are often grouped according to their market capitalisation into:
- Large-cap: Organisations with a market cap of Rs. 200 billion or more.
- Mid-cap: Companies with a market cap between Rs. 50 billion and Rs. 200 billion.
- Small-cap: Companies with a market cap below Rs. 50 billion.
The market cap provides a clear picture of a company’s size and investment value, making it a key investor metric. Some of the top Indian AI stocks as per market capitalisation are:
Tata Consultancy Services (TCS)
With a market cap of around Rs. 13.53 trillion, TCS is a leading global IT services, consulting, and business solutions organisation. This company has been using AI and machine learning across its services and solutions, significantly contributing to its growth.
Infosys
Infosys is a major player in the IT services industry, focusing heavily on AI and automation to drive digital transformation for its clients. The company has a market cap of Rs. 5.93 trillion. It invests substantially in AI research and development, which enhances its service offerings.
Wipro
Wipro is known for its strong emphasis on AI to provide cutting-edge solutions in IT services and consulting. The company has a market cap of Rs. 2.29 trillion. When it comes to AI, it has a dedicated division, Wipro HOLMES, which is a comprehensive suite of AI tools and solutions.
HCL Technologies
HCL Technologies has a market value of Rs. 3.61 trillion. It incorporates AI and machine learning into its service delivery to boost efficiency and client satisfaction. The company has been investing in AI-driven solutions to enhance its IT and business services.
Tech Mahindra
Tech Mahindra has a market capitalisation of Rs. 1.22 trillion. It focuses on leveraging AI to deliver innovative telecom, IT, and BPO solutions. The company’s AI solutions aim to enhance customer experience and operational efficiencies.
Why Consider Investing in AI Stocks in the USA?
Investing in AI stocks in the USA presents a compelling opportunity due to numerous key factors. Read on to learn more.
Global Leadership in AI
The United States is a global leader in AI development and innovation, driven by its significant investments in research and development, strong technological infrastructure, and a thriving ecosystem of tech companies and startups. The US is home to some of the world’s most influential AI companies, including:
- Alphabet (Google): Through its subsidiary Google, Alphabet has made substantial advancements in AI, particularly with its deep learning and natural language processing technologies. Check share price of Google.
- Microsoft: With initiatives like Azure AI, Microsoft is at the forefront of AI research and development. This AI tool provides cloud-based AI services to businesses globally. Check share price of Microsoft.
- NVIDIA: NVIDIA has made crucial advancements in AI hardware. It is known for its powerful graphics processing units (GPUs). Such NVIDIA AI products are essential for AI computations and deep learning applications. Check share price of NVIDIA.
These companies are leading AI innovation and setting global standards for AI applications across various industries.
Higher Growth Potential
When comparing market sizes and growth rates, the AI market size in the USA is expected to reach USD 50.6 billion in 2024. Meanwhile, the Indian AI market is valued at USD 6.26 billion. These numbers depict a huge gap in growth potential in both countries’ AI sectors.
In addition, the US AI market is projected to grow exponentially, driven by substantial investments from the private sector and government initiatives to maintain its leadership in AI. In contrast, while India’s AI market is growing, it is still in an earlier stage of development and needs to match the scale and pace of the US market.
Success Stories of US-based AI Companies
The success stories of US-based AI companies further underscore the attractiveness of investing in this sector. For instance:
- Alphabet (Google): Google’s AI-driven products, such as Google Assistant and Google Translate, have revolutionised how we interact with technology. Further, leading to significant revenue growth and market expansion.
- Microsoft: Microsoft’s AI innovations have enhanced its product offerings, such as integrating AI in Microsoft Office and developing advanced analytics tools in Azure, resulting in robust financial performance.
- NVIDIA: NVIDIA’s GPUs are essential for AI and machine learning tasks, making the company a critical supplier in the AI supply chain. This has led to remarkable stock performance and substantial market capitalisation growth.
These companies highlight the potential for significant returns on investment and demonstrate the transformative impact of AI technologies on global industries.
15 Top Performing AI Stocks in the USA
For Indian investors, investing in a particular industry, like the US stock market, can be challenging. So, here is a list of some of the most promising US AI stocks:
| Company Name | Ticker Symbol | 1-Year Return |
| Nvidia Corporation | NVDA | 180.58% |
| Arista Networks, Inc. | ANET | 79.80% |
| Meta Platforms, Inc. | META | 80.93% |
| Amazon.com, Inc. | AMZN | 48.85% |
| Advanced Micro Devices, Inc. | AMD | 31.59% |
| Palo Alto Networks, Inc. | PANW | 42.60% |
| ServiceNow, Inc. | NOW | 35.14% |
| UiPath, Inc. | PATH | 11.08% |
| SoundHound AI Inc | SOUN | 66.33% |
| AeroVironment Inc. | AVAV | 114.69% |
| Symbotic Inc | SYM | 12.59% |
| Faro Technologies Inc. | FARO | 24.19% |
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Factors to Consider Before Investing in AI Stocks
Before investing in AI stocks, it is essential to assess numerous key factors that can influence their performance and potential for growth. These include:
Company Financial Health
You must analyse the financial stability and performance of the AI company you are considering investing in. Look at revenue growth, profitability, debt levels, and cash flow metrics. A healthy financial foundation can indicate resilience and potential for future growth.
Industry Competition
You should evaluate the competitive market within the AI industry. Identify key players, their market share, and any emerging competitors. Understanding the competitive dynamics can help you assess a company’s ability to maintain or gain market leadership.
Technological Innovation
Assess the AI company’s technological capabilities and its ability to innovate. Look for companies developing cutting-edge AI technologies, as this can drive long-term growth and competitive advantage. Also, evaluate factors such as research and development investments, intellectual property portfolio, and partnerships with academia or other industry leaders.
Regulatory Environment
Take the regulations governing AI technologies into consideration. Any changes in them can significantly impact the growth prospects of AI companies. So, stay informed about any regulatory developments or policy changes that may affect the industry domestically and globally.
FAQs on AI Stocks
What are AI stocks?
AI stocks refer to publicly traded companies that develop, deploy, or use artificial intelligence technologies. These companies may specialise in AI software, hardware, or services and trade on various stock exchanges.
Why invest in AI stocks?
A key reason behind investing in AI stocks is that the Indian AI market is predicted to increase by 20% over the next five years. Moreover, since 2023, AI-related stocks have outperformed both US and global indexes, providing returns that are 30% higher. A major reason for this is AI technologies continue to mature and find more diverse applications beyond automation and cost reduction.
Investors are bullish on AI stocks, perceiving a sustained growth trajectory in demand for the technology. Since 2023, AI-related stocks have outperformed both US and global indexes, providing returns that are 30% higher. A major reason behind this is AI technologies continue to mature and find more diverse applications beyond automation and cost reduction.
How to choose the best AI stocks?
To select the best AI stocks, research companies with strong financials, technological innovation, and competitive AI industry positions. Moreover, factors like revenue growth, profitability, R&D investments, intellectual property, partnerships, and regulatory compliance should be considered.
Should I invest in US AI companies or Indian?
Deciding between investing in US or Indian AI companies depends on your risk tolerance, investment goals, and market outlook. US companies often offer established players with strong R&D and market presence. However, Indian companies may provide exposure to emerging markets and potentially higher growth opportunities. It would be advisable to diversify across both markets for a balanced portfolio.
Can Indian investors buy US AI stocks?
Yes, Indian investors can buy US AI stocks. You can do so through various international brokerage platforms that offer access to global stock markets. However, you must comply with regulations governing international investments and may encounter currency exchange and tax implications.
What are the risks associated with AI stocks?
Risks associated with AI stocks include technological limitations or failures, regulatory challenges, cybersecurity threats, ethical concerns, and market volatility. Additionally, dependency on data quality and privacy issues can impact performance and investor sentiment.
Conclusion
As per the recent breakthrough in the industry, AI companies and their stocks are deemed to experience exponential growth. However, choosing the ideal ones is crucial for making wise decisions. This becomes even more difficult when it comes to US AI stocks. But with quality research, you make this possible!
If you want a platform facilitating investments in US AI stocks, consider signing up with Appreciate. It is a brokerage platform that allows you to invest in US stocks and provides you with the necessary insights for making fruitful choices. So, trust Appreciate to help you maximise your portfolio profits!
Disclaimer: Investments in securities markets are subject to market risks. Read all the related documents carefully before investing. The securities quoted are exemplary and are not recommendatory.
