Artificial intelligence (AI) isn’t just a buzzword anymore; it’s a transformative technology set to disrupt industries and boost global economic growth, according to Goldman Sachs. With its potential in mind, let’s explore some of the best AI chatbot stocks to buy right now, which could offer multi-year growth opportunities.
What are AI chatbots?
AI chatbots are computer programs powered by artificial intelligence that simulate human conversation, allowing businesses to interact with users in a natural and efficient way. These chatbots can understand and respond to queries, provide customer support, and even execute tasks, all without human intervention.
The AI chatbot industry
The AI chatbot industry is witnessing rapid growth and adoption across various sectors. Primarily, AI-driven chatbots are streamlining customer service operations and automating routine tasks such as data entry, thereby reducing labor costs and enhancing productivity.
For instance, Klarna recently revealed that its AI chatbot is effectively performing the workload equivalent to 700 customer service agents. Moreover, AI is driving innovation in fields like medicine, autonomous driving, and finance by enabling tasks such as molecule discovery, fraud prevention, and more.
Top 3 AI chatbot stocks to buy this year
After thorough research, we’ve come up with the top 3 AI chatbot stocks to watch out for this year. These three include:
| Company | Stock symbol | Potential upside |
| Arista Networks | ANET | Multi-year growth due to AI networking demand |
| Dell Technologies | DELL | Robust AI revenue projections, driven by server solutions and AI-capable PCs |
| Oracle | ORCL | Strong AI infrastructure and application offerings, poised for continued growth |
Arista Networks (NYSE: ANET)
Arista Networks is a leading player in the AI space due to its provision of essential networking hardware and software crucial for AI implementation. Its solutions are pivotal for powering AI data centers, making it a core holding in the AI landscape.
With the onset of generative AI, a multi-year upgrade cycle in data centers has begun, with over $1 trillion expected to be spent in the next four years, as per Nvidia CEO Jensen Huang. Arista Networks stands to benefit significantly from this trend, as its networking equipment is integral for successful AI workflows.
Notably, Arista Networks aims for $750 million in AI networking revenue by 2025 and is gaining market share against competitors like Cisco Systems. Its collaboration with the Ultra Ethernet Consortium further underscores its commitment to enhancing AI workloads. Thus, investing in ANET stock offers exposure to the burgeoning AI and cloud networking markets.
Arista Networks stock price today
Dell Technologies (NYSE: DELL)
Renowned for its computer hardware, Dell Technologies has emerged as a notable player in the AI domain. Its GPU-based server solutions are in high demand, with AI server orders accounting for 25% of server revenue in fiscal year 2024.
In Q4 FY2024, Dell recorded $800 million in AI shipments, with a 40% increase in AI-optimized server orders quarter-over-quarter. Analysts project robust growth in Dell’s AI revenues, with expectations ranging from $5 billion to as high as $15 billion by FY2026.
Moreover, the increasing adoption of AI-capable PCs, forecasted to reach 60% of all PCs shipped by 2027, further expands Dell’s market potential. With AI poised to become integral to computing, investing in DELL stock presents an opportunity to capitalize on this trend.
Dell Technologies stock price today
Oracle (NYSE: ORCL)
Oracle stands out as a prime AI investment with its forward-thinking approach to AI infrastructure and applications. The company provides infrastructure for training AI models and has redesigned its industry-specific applications to harness generative AI effectively.
For example, Oracle’s reengineered Ambulatory Clinic System features a Clinical Digital Assistant capable of voice interactions, streamlining healthcare processes. Its Cloud Infrastructure (OCI) experiences accelerating revenue growth driven by AI demand, surpassing competitors with superior capabilities.
Additionally, OCI’s growth momentum, particularly in Q3 FY2024 with a 49% increase in cloud revenue, underscores Oracle’s position as a key AI beneficiary. With its continued focus on integrating AI into its offerings and securing significant infrastructure contracts, investing in ORCL stock presents a compelling opportunity in the AI landscape.
Oracle stock price today
Pros and cons of buying AI chatbot stocks
Investing in AI chatbot stocks offers the potential for substantial returns driven by the growing adoption of AI technologies across industries. However, it’s essential to consider the risks associated with this investment, such as market volatility, regulatory challenges, and technological advancements impacting company performance.
Pros
- Exposure to a high-growth sector with significant potential for innovation and disruption;
- Opportunities for revenue growth driven by increasing adoption of AI technologies;
- Potential for long-term returns as AI becomes increasingly integrated into various aspects of business operations.
Cons
- Market volatility and uncertainty surrounding regulatory frameworks may impact stock performance;
- Technological advancements and competition could affect the market share and profitability of AI chatbot companies;
- Dependency on AI adoption rates across industries, which may vary based on factors such as budget constraints and organizational readiness.
Summary: Are AI chatbot stocks a good investment?
All things considered, AI presents compelling investment opportunities, particularly in the realm of chatbots. In fact, companies like Arista Networks, Dell Technologies, and Oracle are well-positioned to capitalize on the growing demand for AI-driven solutions across industries.
While investing in AI chatbot stocks offers the potential for significant returns, it’s essential to conduct thorough research and consider both the opportunities and risks associated with this investment. With careful consideration, investors can harness the transformative power of AI to drive long-term growth in their portfolios.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
