ChatGPT shares: best AI stocks to watch in Q2 2023

OpenAI’s ChatGPT has taken the world by storm. It’s creating ultrafast copy, cash flow models, workout plans, and even developing software from scratch.

It’s been close to impossible for internet-connected individuals to ignore the launch of the AI interface. It garnered over 1 million users in just five days; for context, it took Facebook 10 months, and Netflix three and a half years to hit the same milestone.

Now boasting over 100 million users, it’s clear that the next stage of AI development is here. In the past few weeks alone, the chatbot has been used to successfully contest a parking fine and passed a variety of higher-level exams. Similar software created headlines when it was used to create a viral ‘photo’ of the Pope wearing a white Balenciaga-style jacket.

Last week, Elon Musk alongside a consortium of luminaries co-signed an open letter calling for a global six-month moratorium on testing advanced AI models. While this is very unlikely to happen, it goes to show the breakneck pace of technological transformation. For context, Italy has banned ChatGPT over privacy concerns, and Germany may soon follow.

It’s worth noting that people often underestimate the pace of technological change. Horses were the main mode of transportation until 1908 — and then 15 million Ford Model Ts were sold over the next twenty years.

The Wright Brothers’ first flight was in 1903, and we landed on the moon in 1969. And the internet only opened up to the public in 1991 — now it’s hard to find anyone without a smartphone in their pocket.

Naturally, the question is how investors can profit from this next potential revolution.

ChatGPT stocks: investment ideas

The first port of call would clearly be investing in OpenAI directly. The ChatGPT owner currently operates under a capped-for-profit model (100 times the investment amount), with the aim of ‘building safe and beneficial artificial general intelligence for all humanity’. Sadly, the AI developer is not yet publicly listed.

However, computing titan Microsoft announced a $10 billion investment into the company in January 2023. For retail investors looking to invest in ChatGPT, Microsoft is perhaps the best current option until OpenAI launches its IPO.

The second-most popular choice may be Google and YouTube owner, Alphabet, which has invested heavily in artificial intelligence, including not only ChatGPT competitor Bard and the Cortana virtual assistant, but also DeepMind Technologies, a British AI research lab found in 2010. It’s worth noting that OpenAI was only found in 2015, so Alphabet has had a five-year starting advantage.

A third AI stock to watch is Amazon. The world’s largest e-commerce retailer has invested heavily in multi-device voice assistant Alexa, and its Amazon Web Services cloud computing business is comfortably the sector’s market leader. Amazon is notable for its machine learning capabilities on AWS, such as SageMaker, a fully-managed service that helps developers deploy ML models.

Another investment that could see huge growth is Amazon Rekognition, a cloud-based video analysis service that could have important functions in the security and advertising spaces.

The final AI stock that investors might consider is IBM. While not as flashy, its Watson platform for data analysis and natural language processing has been in operation since 2010, and now boasts over 100 million users.

Picks and shovels

Some analysts consider that a ChatGPT-powered Bing could soon usurp Google’s search dominance. However, the truth is that whenever there’s a rapid advance in technology, it can be hard to know who will eventually dominate.

Happily, instead of picking individual AI stocks investors can utilise the picks and shovel approach. Nvidia makes many of the most advanced computer chips that will be needed for continued AI progress, and the near-term ARM IPO may also represent an opportunity as it is responsible for the designs of 95% of computer chips in smartphones worldwide.

For those looking for a little diversification, the Global X Robotics & Artificial Intelligence ETF (NASDAQ: BOTZ) is a popular choice. The ETF seeks to invest in companies that stand to benefit from the increased adoption of robotics and AI, including autonomous vehicles.

And as AI continues to develop, the best AI stocks could become an increasingly important portfolio addition.

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