Top 3 AI Stocks for 2024: Amazon, Alphabet, LSEG Insights

2024 AI Stock Picks: Amazon, Alphabet, LSEG Analysis

3 highly advanced artificial intelligence stocks to consider for the year 2024

Artificial Intelligence is expected to continue being a prominent topic in the stock market this year. Here, Ed Sheldon identifies three AI stocks that he is fond of for 2024.

You are reading a complimentary article with viewpoints that may vary from The Motley Fool’s Premium Investing Services. Join the Motley Fool membership today to immediately get our top analyst recommendations, comprehensive research, investment resources, and many benefits. Discover other information.

Artificial intelligence (AI) was the most popular investment trend of 2023. Due to the growing interest in generative AI, such as ChatGPT, the stock prices of several technology companies surged. Considering the continuous progress in this area, I anticipate that AI will once again be a prominent topic this year. Considering that, here are three stocks to contemplate purchasing for 2024.

Amazon:

Amazon (NASDAQ: AMZN) is a large technology firm that hasn’t garnered much attention in the field of artificial intelligence. However, it is important to note that it is a significant participant.

Amazon has employed artificial intelligence (AI) in its operations for a considerable period of time. From customising shopping experiences to automating warehouse procedures, it has utilised the technology in many ways.

However, it is now stepping things up a level, with the introduction of some thrilling new products and features. An example is ‘Amazon Q’. This is an AI assistant powered by generative technology, designed exclusively for enterprises.

Another instance is the recent introduction of AI-driven image creation (refer to picture below) for businesses that sell on its marketplace. This is created to assist brands in providing an improved visual experience for customers.

Currently, Amazon is not an inexpensive stock. At present, it has a future-oriented P/E ratio of approximately 40. This increases the possibility of danger.

I’m fine with the valuation, though. This company has consistently traded at a premium price-to-earnings ratio, but that has not prevented it from generating impressive gains in the past.

Alphabet

In 2023, Alphabet, the owner of Google (NASDAQ:GOOG), was frequently perceived as a somewhat lesser competitor in the field of artificial intelligence. That’s because ChatGPT, which is owned by Microsoft, was the centre of attention.

The competition is still ongoing, but I anticipate that Alphabet will make a comeback in 2024.

The company just launched ‘Gemini’, which competes with ChatGPT 4. This is a highly advanced technology (it is the initial model to surpass human specialists in Massive Multitask Language Understanding (MMLU)).

At the moment, Google is implementing AI capabilities in all of its programmes (Gmail, Search, Maps, etc). These should simplify life for users in the future.

The concern is that ‘ChatGPT’ has started to be used as a verb. This may pose continuous difficulties for Alphabet.

Considering that the stock is trading at a P/E ratio just above 20 (in comparison to Microsoft’s ratio of 33), I see the risk/reward situation favourable as we enter 2024.

London Stock Exchange Group

At last, a British stock – London Stock Exchange Group (LSE: LSEG).

Now, this company might appear to be an unusual choice for AI exposure. But listen to me. Due to its purchase of Refinitiv a few years ago, LSEG is now a major participant in the financial data industry (it provides data to banks, investment managers, hedge funds, etc).

And lately, it partnered with technology giant Microsoft to create personalised generative AI models for banks. The goal of these models is to assist companies in extracting additional insights from their data.

LSEG has announced that consumers will start experiencing the advantages of the Microsoft relationship in 2024. I believe we may soon receive updates on some intriguing advancements in AI.

There is a potential risk in terms of valuation in this situation. The current P/E ratio of the stock is approximately 25. I don’t believe that’s an excessive multiple, considering the company’s focus on data and AI.

Stay Updated about the latest technological developments and reviews by following TechTalk, and connect with us on Twitter, Facebook, Google News, and Instagram. For our newest video content, subscribe to our YouTube channel.