From Nasdaq, Inc.:

The stock market faced significant challenges in 2022, with high inflation and rising interest rates, resulting in its worst performance in a decade. However, the Nasdaq Composite has surged ahead by 44% in 2023 after a 35% drop in 2022, with signs pointing to further upside potential. This rally has largely been driven by a resurgence in investor interest in artificial intelligence (AI).

Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) is a compelling stock for investors interested in AI. With strong dominance in internet search and digital advertising, plus a growing cloud computing presence, Alphabet has a robust portfolio of products and services reaching over 1 billion users each and integrating AI into many offerings. At roughly 5 times next year’s sales, the stock is historically cheap and has potential for significant growth.

Amazon (NASDAQ: AMZN) is another solid pick for those interested in AI, boasting a dominant position in e-commerce and cloud computing, as well as a strong presence in digital advertising. With new generative AI tools and a platform that helps cloud users build customized AI applications, Amazon is well-positioned in the AI market. The stock is selling for just 2 times forward sales, a discount to its historical price-to-sales ratio of 3.5.

Analysts predict significant growth in AI-related spending by the end of the decade, offering a substantial opportunity for companies like Alphabet and Amazon. With established, industry-leading businesses and strong potential for AI upside, these stocks are worth considering for investors interested in the AI market.



Read more: History Says the Nasdaq Will Surge in 2024: 2 Artificial Intelligence (AI) Growth Stocks to Buy Before It Does