The artificial intelligence boom has generated many winners like these three stocks

Artificial intelligence (AI) can increase global productivity and help businesses generate more revenue. Those two outcomes and others have captivated investors who seek to beat the market.

Its hard to find an industry that performed as well as AI last year. It may also be challenging to find a sector that can keep up with artificial intelligence stocks in 2024. These stocks wont go parabolic and will have good years and bad years.

However, many of the catalysts that fueled 2023s rally are still in play this year. Its possible for these three AI stocks to soar higher as they capitalize on the artificial intelligence boom.

Source: sdx15 / Shutterstock.com

Nvidia(NASDAQ:NVDA) put investors on notice last year as artificial intelligence caused revenue to surge.Quadruple-digit year-over-year net income growthmade the valuation easier to justify.

Even now, it can be argued that Nvidia is still an undervalued stock. The companys continued growth, business opportunities, 28 forward P/E ratio, and 0.56 PEG ratio form the foundation for this argument.

This company has been one of the best performers in the stock market. Shares are up by 241% over the past year and have gained 1,328% over the past five years. The company has even notched a 19% year-to-date gain. Most indexes have eked out low-single-digit gains this year, if that.

The firm is in a class of its own and has the potential to become the worlds most valuable company. It has grown the most out of the top artificial intelligence players and leads by a wide margin.

Source: The Art of Pics / Shutterstock.com

If Nvidia wants to become the worlds most valuable publicly traded company, it will have to contend with heavyweights:Microsoft(NASDAQ:MSFT) andApple(NASDAQ:AAPL). The two stocks have been jockeying for the top spot with Microsoft having a slight edge at the time of writing.

A 70% gain over the past year and a 268% gain over the past five years make Microsoft stock look appealing for long-term investors. The companys artificial intelligence initiatives can fuel more gains and reward investors who accumulate shares.

Microsofts Azure has anAI platformthat helps developers build apps at enterprise scale. The company has built-in tools to help developers create more effective AI and construct AI workflows.

The company also benefits from the rise of AI through its investment in OpenAI and Microsoft Copilot. Copilot is a new feature that has been built into Microsoft Office Products to increase productivity. The firm is a leading AI stock that continues to deliver double-digit year-over-year revenue and earnings growth.

Source: Benny Marty / Shutterstock.com

Alphabet(NASDAQ:GOOG, NASDAQ:GOOGL) is well-known for its search engine. Google is the worlds most popular website with its own YouTube right behind it. These platforms rely on artificial intelligence to provide consumers with relevant search results. YouTube also recommends videos similar to the one the viewer is currently watching to increase the amount of time people spend on the website.

Attention is money for any company, and Alphabet has demonstrated that it can keep attention for several hours in a given day. While ad revenue is still growing, the company is diversifying into other areas, such as cloud computing, to achieve higher growth rates.

Google Cloud offers severalAI and machine learning productsto help people use generative AI, gather data, and perform other tasks. Alphabet is also at the forefront ofquantum computingthrough AI which can become the next megatrend. Quantum computing is still in its early innings, but artificial intelligence is heating up right now.

Alphabet stock gives you exposure to those sectors, the companys vast advertising business, and other business segments.

On this date of publication, Marc Guberti held long positions in NVDA and MSFT. The opinions expressed in this article are those of the writer, subject to theInvestorPlace.comPublishing Guidelines.

Marc Guberti is a finance freelance writer at InvestorPlace.com who hosts the Breakthrough Success Podcast. He has contributed to several publications, including the U.S. News & World Report, Benzinga, and Joy Wallet.

Go here to see the original:

3 Stocks Capitalizing on the Artificial Intelligence Boom - InvestorPlace