The artificial intelligence (AI) world is evolving so fast that it can be hard to keep up. This is true for both tech enthusiasts and investors who are seeking the best AI stocks to buy. Since the launch of ChatGPT in November 2022, the technology has quickly demonstrated an impressive ability to change how humans do many things, from writing computer code to conducting research. ChatGPT has demonstrated a limited ability to pick stocks. But the power of this new phase of tech evolution is much bigger than any one sector. InvestorPlace senior investment analyst Luke Lango has described it as the “everything revolution.” His colleague Louis Navellier provides further context on the power of AI as a driving market force. In his words:
“What’s becoming unmistakably clear is that not every stock will share in this wave of prosperity. The chasm between tech stocks and the broader market is widening at an unparalleled rate. And the remarkable performance of tech stocks today echoes a similar pattern from the past – the dawn of the internet-fueled bull market of the early 1990s.”
In that, we see how identifying the best stocks to buy for the AI revolution can be difficult. Some experts have touted Tesla (NASDAQ:TSLA) for its use of AI in its quest to perfect autonomous driving. However, a closer look at the tech behind the driverless race reveals that there are better ways to gain exposure to the lucrative market. Meanwhile, other companies that might not be considered “AI stocks” are leveraging this new technology to transform their already impressive products and platforms.
Let’s dive into a few of the companies in the best position to become the next big thing in AI. If you think Nvidia (NASDAQ:NVDA) is overvalued or that it’s too late to take profits from Apple (NASDAQ:AAPL), consider these smaller-cap companies with ample room to run.
Best Stocks to Buy: GitLab (GTLB)
If you work in tech development, you likely know all about GitLab (NASDAQ:GTLB). If you don’t, you’ve probably heard its name in passing. Tech developers widely use this DevOps platform for both professional and personal projects. It isn’t necessarily the first company that comes to mind when the topic turns to AI stocks. However, GitLab recently reported stellar Q1 earnings, and Wall Street knows why; it is being recognized as a promising AI play. As Chief Financial Officer Brian Roberts states:
“Against a backdrop of macroeconomic uncertainty, customers are looking to our AI-powered DevSecOps platform to drive efficiencies, increase productivity, and accelerate their pace of innovation. We are poised to make the most of the estimated $40 billion total addressable market opportunity before us.”
This puts GitLab in an excellent position to keep rising as investors continue the search for the next big thing in AI. The company beat analyst expectations on both top and bottom lines and provided promising Q2 revenue guidance. More importantly, though, it highlighted its plan for a generative AI add-on. This is the ideal time to double down on AI offerings, especially for tech companies already giving investors reasons to bet on them. GTLB is a top stock to watch as the AI revolution continues to unfold.
Luminar Technologies (LAZR)
This lidar technology company reminds investors why Tesla may not be the best bet for autonomous driving market exposure. Luminar (NASDAQ:LAZR) is producing the type of technology that Elon Musk has dismissed, likely to his own company’s detriment. Not only that, but it is using that exact tech to beat Tesla to the front of the driverless race, repeatedly proving that lidar is the linchpin needed to perfect self-driving technology. As InvestorPlace has reported, multiple experts have praised Luminar’s tech and noted that lidar is becoming increasingly affordable.
Auto giants such as Volvo (OTCMKTS:VLVLY) and Mercedes-Benz (OTCMKTS:MBGAF) have opted to use Luminar’s tech in their electric vehicles (EVs). But more recently, the company partnered with Plus to bring AI-based software to large-scale commercial trucking. As more and more companies opt to use this revolutionary technology, it becomes increasingly hard to ignore the fact that it is transforming an entire industry. AI is going to take us to the next phase of driving, and LAZR stock is the best bet for investors who want to cash in on this exciting trend.
Best Stocks to Buy: Stem (STEM)
Some investors may initially dismiss a company like Stem (NYSE:STEM). After all, it trades at a low price point and doesn’t garner much media coverage. But to do so would be to overlook an undervalued AI stock with more potential than some experts realize. Stem is often ranked among clean energy stocks, but that doesn’t mean it doesn’t have significant AI applications. As InvestorPlace contributor Larry Ramer notes, it is well known for its Athena platform, which maximizes “energy asset performance and investments” through AI. This includes growing areas of clean tech such as solar energy, EV charging systems and energy storage.
The rising costs of electricity are creating a highly favorable economic landscape for Stem. As more and more companies invest in clean energy solutions, programs like Athena will become necessary for management and efficiency purposes. Stem’s revenue has been rising steadily this year, but the company is posed to soar in the coming years as it plays a critical role in both the green and AI revolutions. Like LAZR, it currently trades at a low price point, making this a key opportunity for investors seeking undervalued AI stocks to buy with high growth potential.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
