Best ChatGPT Stocks of April 2024

ChatGPT from OpenAI is all over the news — there are stories about how this is the latest innovation that will change how we live and work. But what is ChatGPT, and more importantly, how can investors capitalize on this disruptive opportunity?

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Here’s what you need to know about this technology and the best ChatGPT stocks for 2024.

Can I Buy Stock in ChatGPT?

OpenAI is not a publicly traded company, so you cannot buy shares of it or ChatGPT. It is private, but it is funded by some public tech giants. So while you cannot invest in OpenAI directly, you can invest in some of the companies that have invested in it and will therefore reap the benefits of this technology once it is monetized.

Another strategy to consider is investing in companies that stand to benefit from leveraging generative AI technology. That way, your investment is less reliant on a single company than it is on the technology behind AI and the AI market overall.

Here are some of the top stocks poised to benefit from AI.

1. Microsoft (MSFT)

Microsoft is a big investor in OpenAI, having invested as early as 2019 and as recently as January 2023. Microsoft recently announced its own AI-powered search engine and browser, which hopes to take market share from Google and Chrome.

As an investment, Microsoft no longer has the millionaire-making power it had in its early days, since it has just gotten too big and mainstream for that. On the other hand, the technology juggernaut is also far less risky these days, making it a solid choice for buy-and-hold investors.

2. Alphabet (GOOG)

Alphabet has introduced its own AI-powered chatbot, called Gemini. By piggybacking on its ubiquitous search engine, Google is poised to capitalize on the AI business almost by default.

3. Nvidia (NVDA)

Artificial intelligence and machine learning require huge amounts of processing power. Nvidia develops and manufactures high-end chips that can power these applications and the supercomputers needed to run them.

As it has done in the not-so-distant past with cloud computing, gaming and data centers, Nvidia should also benefit from other technology disruptions, like the metaverse.

4. Amazon (AMZN)

E-commerce juggernaut Amazon has been using AI in its operations for some time. Alexa has been serving up human-like responses to questions and commands — “Alexa, tell me a joke” — for roughly 10 years, and it’s easy to see how Amazon’s algorithm learns your preferences when you search.

And the company uses AI in its own operations, from warehouses to customer service.

5. IBM (IBM)

While IBM may no longer be the first company that comes to mind when thinking of technology disruptors, IBM has been developing AI applications for years. Watson, the first AI supercomputer, famously beat Ken Jennings, the all-time “Jeopardy!” champion, in 2011, but even before that, IBM’s Deep Blue defeated world chess champion Garry Kasparov.

And IBM has not been resting on its laurels since then, so watch for the company to continue to innovate in AI.

6. C3.ai (AI)

C3.ai develops AI applications for large enterprises, like the U.S. Department of Defense, with which it made a five-year deal worth $500 million.

Primarily focusing on custom AI applications for manufacturing, healthcare, finance, life sciences and other industries, C3.ai is young and not yet profitable, which makes it a stock to consider for those investors who are not risk averse.

7. Palantir (PLTR)

Palantir has already benefited from the hype around ChatGPT and generative AI technology, surging over 183% in the last year. The company has its own AI platform, aptly named AIP, for Artificial Intelligence Platform. Palantir’s website documents dozens of use cases in functions like customer service, finance and accounting, human relations and supply chain and logistics, to name just a few.

Some think the hype has pushed Palantir shares up too far. A 255.67 P/E ratio suggests they might be right. But Wedbush and BofA Securities both express optimism, Wedbush by maintaining an “outperform” rating and BofA Securities by maintaining its “buy” recommendation.

8. Shopify (SHOP)

Shopify store owners have a number of AI tools at their disposal. The platform gives users free access to Shopify Magic, an integrated suite of AI features that provides support for store building, marketing, customer support and back-office management. There’s also a chatbot that uses generative AI powered by ChatGPT to recommend products, answer questions and help move customers toward a purchase.

After a 16-month rough patch that began in November 2021, Shopify has regained some ground. Improved sales for itself and its clients and further development of AI technologies it might eventually license could keep it on an upward trajectory.

9. JPMorgan Chase (JPM)

JPMorgan Chase, America’s largest commercial bank, has implemented an AI research program to advance AI, machine learning and other technologies for use in a number of different areas. For example, it’s looking into using AI to:

• Predict and manage economic systems

• Identify financial crime before it happens

• Securely share data

• Observe clients’ behavior to create a superior experience

• Increase employees’ efficiency

• Monitor processes for compliance

• Ensure ethical and “socially good” AI

This early on, there’s no way to know where the research might lead. But few companies have the resources to explore it as fully.

10. Advanced Micro Devices (AMD)

Nvidia competitor Advanced Micro Devices hasn’t seen gains on the level of Nvidia’s — 241% over the last year vs. AMD’s 90.87%. But industry developments that benefit Nvidia also benefit AMD.

As Investor’s Business Daily recently noted, it wouldn’t be the first time AMD found success playing second fiddle, as was the case with its turf war against Intel for personal computer and server chips. By all accounts, AMD is likely to continue to be a strong second choice and backup for companies leery about relying on Nvidia alone for its chips and graphics processing units.

AMD also provides a viable alternative to Nvidia’s AI accelerator — a special processor that helps to expedite machine learning for AI applications.

11. Broadcom (AVGO)

Broadcom is another semiconductor company capitalizing on AI opportunities. The company made its AI mark with accelerators and network hardware that scale AI data centers. It recently expanded its capabilities with the acquisition of VMware, a software company capable of creating cloud-based data centers for enterprises and private clouds for their customers, Forbes reported.

While Broadcom doesn’t have the name recognition of Nvidia and AMD, it does have 60 years of experience as a leader in global infrastructure technology.

12. Adobe (ADBE)

Adobe is one of a number of enterprise software stocks that have faltered lately, in part because investors are getting impatient to see a return on the companies’ monetization of AI. It could simply be that their expectations are unrealistic.

Adobe and its Creative Cloud platform are unlikely to lose their dominance as the leading software for graphic designers, web designers, photographers and, to a lesser degree, filmmakers, as there are no rivals for most of its apps.

In addition to helping to forge a technical path for generative AI, Adobe is also setting standards for ethical AI generation. The generative features of its software use its own Adobe Stock collection exclusively, for example, to avoid copyright infringement.

13. Apple (AAPL)

Apple was caught off guard by the rapid rise of ChatGPT and generative AI, according to Bloomberg, but now it’s working on its own version and exploring ways to integrate AI and machine learning into every product it builds. The world’s second-largest company certainly has the resources to throw into its efforts, and it’s actively recruiting new staff in a variety of areas, including applied research, deep and reinforcement learning, natural language processing and machine learning infrastructure.

All told, the company is prepared to spend $1 billion per year on AI initiatives, Bloomberg noted.

So what does that mean for Apple products? For one, AI plays a major role in Apple’s newest product — $3,499 Vision Pro augmented reality goggles. Looking ahead, expect practical improvements like more accurate iPhone autocorrect, automatic shut-off of AirPods Pro noise canceling when you speak and 3D modeling to create avatars for videoconferencing, according to a CNBC report. The company is even looking into enabling iPhones to identify users’ pets so that pet photos can automatically be filed in their own folder.

Apple products’ AI integrations will be unique in that they’ll generate their own AI, avoiding the need for cloud servers. What’s more, that technology will be Apple’s because the company designs its own chips.

What Is ChatGPT?

ChatGPT is an artificial intelligence-driven chatbot that answers questions and responds to prompts based on available information. What differentiates ChatGPT from search engines like Google is its ability to learn and respond to queries using natural language.

You can enter a query into ChatGPT as you would into Google, but instead of getting a list of websites to explore, you’ll get a more detailed answer. You can also refine your query, and ChatGPT will provide you with additional information.

AI Apps

Note that ChatGPT is one of many generative AI apps that perform similarly. ChatGPT is a product of OpenAI, and the name has become synonymous with AI chatbots in the same way that “Google” has become synonymous with “search” and “Kleenex” has become synonymous with “facial tissue.”

Is ChatGPT Traded Publicly?

So far, there’s no indication that OpenAI, the company that owns ChatGPT, is planning to go public. The company has raised money by offering existing shares in tender offers, which the Securities and Exchange Commission defines as a solicitation by a company to purchase a large percentage of its securities. The offer is open for a limited time, and it allows employees to cash out their shares, but it doesn’t put them on the open market. In the most recent tender offer, Thrive Capital purchased the shares. Thrive, Sequoia Capital, Andreessen Horowitz and K2 Global bought shares, Reuters reported.

Is AI Trading Profitable?

As with any disruptive technology, those who get in on the ground floor can often profit handsomely if the idea takes off as expected. There is risk, however, with any unproven concept, so be sure to do your due diligence.

Final Take

Artificial intelligence and machine learning are some of the hottest developments in technology right now, making them ripe for investors hoping to make a big profit quickly. While there is certainly money to be made, be sure to understand what you’re buying and do your homework.

Karen Doyle contributed to the reporting for this article.

Data was compiled on March 29, 2024, and is subject to change.

This article originally appeared on GOBankingRates.com: Best ChatGPT Stocks of April 2024