artificial intelligence (AI) One of the fastest growing technologies internationally. Experts believe its evolution will be an important part of how people function.
Some expect AI to be similar to other big world-changing technologies like cloud computing, electric cars, and iPhones.
In this article, we’ll look at how AI stocks can be analyzed and traded on a daily basis, with a small list of the best companies to watch out for.
What is artificial intelligence and how does it work?
Artificial intelligence is a large-scale technology that simplifies how people work and interact with technology. Refers to technology that deals with things that humans do in a simple way.
IBM defines artificial intelligence as a field Combines computer science with powerful data sets to enable problem solving. Artificial intelligence is all around us. Good examples of common AI activities are Google Maps, face detectors, social media, and more.
The way AI works is relatively complex since most of it Artificial intelligence models are different. In most cases, AI works by feeding large blocks of data into a model and then using complex mathematical calculations to process it.
For example, well-known AI services such as ChatGPT and IBM Watson are fed large amounts of data, which can be processed.
Why should traders and investors care about AI companies?
There are many reasons why investors and traders are interested in AI companies. First, those Companies are expected to achieve significant growth in the coming years. In most cases, emerging technology companies tend to grow faster than traditional companies. We’ve seen that with other major industries like cloud computing and streaming.
Secondly, for traders, AI companies They tend to be more volatile from other companies. This volatility is usually a good thing for traders as it creates more opportunities.
Moreover, AI companies are set to dominate major markets and industries in the future. For example, car companies like Tesla and Lucid have a lot of AI features On major things like cruise control. Similarly, companies like TikTok, Instagram, and Google are using AI in a variety of ways.
How to trade AI stocks
there Two main ways Where you can trade AI stocks. First, you can Focus on AI stocks directly. As you will see below, there are several types of AI companies in the industry today. As such, you can invest or trade in these companies.
Second, you can day trade AI ETFs. In the past few months, many financial services companies have created ETFs that track some of the leading AI companies.
The largest of these funds is the Global X Robotics & AI ETF, which holds more than $1.35 billion in assets. Other AI ETFs are Robo Global Robotics Automation ETF, iShares Robotics, AI ETF, and First Trust Nasdaq AI ETF.
Related » What are ETFs?
Types of AI stocks
There are several types of AI stocks that you can trade or invest in daily. First, there Companies that make artificial intelligence software. A good example of this C3. aiwhich provides companies with software that they can use to develop their own tool.
Secondly, there Companies that use artificial intelligence to complement their services and products. For example, Google and microsoft bing Using artificial intelligence to improve their search offerings.
Similarly, social media companies like Meta Platforms and TikTok are using AI to improve how people interact with their platforms. For example, they use artificial intelligence to recommend videos and photos.
Third, there companies that provide the infrastructure This is required for the AI to function properly. A good example of this nvidiawhich provides the chips required to process AI models.
There is, too Cloud computing companies Such as Microsoft and Google Cloud that offer back-end storage solutions.
Moreover, there are industry-specific AI companies. For example, there are companies that exist in industries such as cyber security, customer support, and automobiles.
Best artificial intelligence stocks for trading
As mentioned, there are many AI stocks for day trading today. Most of these companies are in the United States. Here are some of the top AI stocks you can consider today:
C3. ai
C3. ai It is an artificial intelligence company It provides tools for companies that want to build AI products. It is used by companies across all industries such as Baker Hughes, Shell, Engie, Koch Industries, and others.
The company has a market capitalization of more than $2.3 billion. It generates more than $266 million annually. But they also cause great losses. In 2022, the company posted a net loss of more than $262 million.
nvidia
Nvidia is one of the largest Semiconductor companies In the world. It designs some of the most powerful graphics chips in the world. They are used across all industries, including automotive, healthcare, gaming, and bitcoin mining.
nvidia, therefore, It is an artificial intelligence indirect company In that it provides the solutions required in the industry.
Microsoft
Microsoft It is a good AI stock to trade or invest in because Provides both AI and infrastructure solutions.
Its Bing search engine is gaining market share against Google. At the same time, her I visit The product is the world’s second largest cloud computing platform after AWS.
Therefore, you will benefit as the industry sees strong growth in the future.
CrowdStrike
This is a company Provides cyber security solutions. Unlike other companies that offer antivirus software, the company uses artificial intelligence to predict and prevent cybercrime activities.
Other companies working in the field of cyber security are DarkTrace, Cyclance, and others.
the alphabet
the alphabetGoogle’s parent company, It is one of the largest artificial intelligence companies in the world. Think of how Google AI can help the world. For example, Google Maps uses AI to provide directions while Search uses AI to provide answers to complex questions.
Day trading strategies for artificial intelligence stocks
Ideally, AI stocks should be trading daily In a similar way How to trade other companies. In this, you must Do the fundamental analysis To identify the main catalysts for these stocks. This can include looking at news, earnings, and other macro events.
After looking at the basics, you should next Transfer to The next one, where you are Focus on technical analysis. This is an important analysis that allows you to do a good analysis of the charts. It involves using technical analysis to predict whether a stock will go up or down.
A good example of this is in the C3.ai stock chart below. As you can see, the stock has formed a double top pattern, which indicates that it will continue to decline in the coming weeks.
summary
In this article, we have looked at what AI stocks are and how to invest and trade them. We’ve also looked at the different types of AI companies.
The rule we always recommend is that you must Avoid investing in companies just because they make headlines. For your long-term portfolio, you should always focus on profitable companies with a wide moat.
Useful external sources
- Chinese AI Stocks Jump on Growing Interest in ChatGPT, State Media Warns of Risks – CNBC