AI Everywhere: 7 AI Stocks to Buy as Adoption Skyrockets

AI adoption has skyrocketed in 2023. Generative AI applications like ChatGPT gained serious attention in early 2023, sparking a trend. That resulted in skyrocketing AI stocks, but adoption began well before that.

Rates of AI adoption vary by industry and function, but overall growth rates were likely somewhere in the high teens in 2022. Those rates are rising rapidly and affecting companies everywhere. Early gains were tech-centered, but adoption elsewhere will lead to opportunities across stocks in all sectors.

Further, hot AI tech stocks have already slowed as investors have become leery of  the rapid gains. Now, investors are actively exploring AI opportunities that they may have initially overlooked in the concentrated investment flurry. Here are seven such options to buy right now, as adoption picks up.

Marvell Technology (MRVL)

Investors know that semiconductor stocks like Marvell Technology (NASDAQ:MRVL) continue to hold massive promise in relation to AI. Among AI chip firms, Nvidia (NASDAQ:NVDA) has garnered the lion’s share of attention and investment capital thus far. It had cooled some, settling around $400 following its stellar earnings report. However, Nvidia has recently seen another price spike higher, meaning that cooling period may indeed prove to be short-lived. What that means is that a new paradigm shift may be underway in this sector. I think Marvell Technology represents one of the best ways to play this surge.

I say that because Marvell is one of several chipmakers confident that AI will boost its business. In late May, management forecast that AI revenue is expected to double in 2023.

When that news came out, the company’s share price jumped more than 15%. But Marvell Technology still doesn’t receive much in the way of AI chipmaker headline space. We’ve seen chip stocks blow past their valuations in 2023. Currently, MRVL hasn’t yet reached its target price. That means there’s probably a lot more room to run with this chip maker.

Advanced Micro Devices (AMD)

Advanced Micro Devices (NASDAQ:AMD) is another chipmaker that’s proven to be very difficult to judge this year. Investors were very leery of this stock when the firm released soft earnings in early May.

It was then that the firm reported negative net income (a year-over-year decline), and weak Q2 guidance. Net income was particularly concerning, having plunged from $786 million a year prior, to -$139 million. The $5.3 billion Q2 revenue projection it gave then would represent a 19% decline over the past year.

Unsurprisingly, this resulted in shares dropping precipitously on the news. At that time, AMD stock had already appreciated from $64 to above $80. It would have been reasonable to guess that AMD might trade sideways for some time. However, AMD stock has surged quickly on AI projections. CEO Lisa Su’s comments about an AI push providing secular growth opportunities is largely responsible for this move. That, and Nvidia’s monster projections for Q2 some weeks later.

The point here is that investors are moving into AMD in the hope that it too can provide news that shocks the stock higher. I think any positive hints, no matter how important, will result in big price jumps from here.

Palantir (PLTR)

Palantir (NYSE:PLTR) is another firm that is showing how AI has changed funadmantal valuations for stocks. What I mean is that firms that have adopted AI have become unmoored from Wall Street expectations.

Palantir proves as much, as the company’s share price has surged past $16 recently, while Wall Street values it at under $10. While some of these gains have come in, there’s reason to believe that more upside could be on the horizon.

I don’t think Palantir is worth investing in simply because it has bucked Wall Street expectations. Instead, I think the company is worth investing in because it serves a defense industry rife with opportunity, and because the company has moved into positive net income territory on a GAAP basis. In fact, Q1 was its second consecutive quarter of providing positive net income.

The company is fundamentally improving. That ought to impress investors. It isn’t simply a company that provides growth, although its revenue growth rate of 18% is nice to see. It’s also a well-run firm. That should bode well for the company’s growth prospects moving forward, considering its in-demand Artificial Intelligence Platform (AIP). Palantir has a chance to carve out a significant position as a major AI software provider to the U.S. military. That is a bet worth making right now.

Cerence (CRNC)

Cerence (NASDAQ:CRNC) is an AI stock that doesn’t get much attention. However, the company operates in a sector brimming with AI opportunity, and may gain a lot more attention soon.

Cerence engineers automotive cognitive assistance solutions that connect automobiles, drivers, and passengers in the digital world. In a time when consumers are demanding greater connectivity, Cerence has a chance to utilize AI to forge a real name for itself.

Cerence provides conversational AI products that provide drivers and passengers with increased safety, comfort, and information. Its voice-powered AI interactive platform is the way of the future. Drivers are demanding greater interactivity from their vehicles, and Cerence provides just that. Its platform is available for automobiles and two-wheeled vehicles, so it’s easy to see the company’s opportunity in spaces like urban delivery, as an example.

That said, Cerence has seen weaker performance of late. The company posted losses during its most recent quarter after providing net gains a year earlier. That said, a bullish stock market paired with a Fed rate pause give investors reason to believe in the narrative surrounding Cerence.

Snowflake (SNOW)

Snowflake (NYSE:SNOW) has seen its fortunes rise and fall with the tech collapse of 2022. Snowflake, like so many other tech firms, was riding high in 2021, nearly reaching $400 per share. Then, inflation fears peaked in late-2021, catalyzing a precipitous drop that hammered tech and growth stocks in particular.

Snowflake wasn’t spared. The company’s share price fell to the mid-$100s and stayed there throughout 2022. But the opportunity in cloud and AI means that Snowflake is again a stock to watch. The Fed’s rate pause only strengthens that narrative, as bullishness around growth stocks abounds.

Snowflake’s cloud is built on top of the three dominant cloud infrastructures: AWS, Azure, and Google Cloud. The software is built to leverage these networks, and those three platforms are AI-heavy. Snowflake is heavily focused on this key area, while many of its competitors look to diversify. Thus, Snowflake has an outsized opportunity, should cloud AI firms suddenly see a surge of market investment.

GitLab (GTLB)

GitLab (NASDAQ:GTLB) is an up-and-coming AI stock that looks to be catching on currently. The software firm hosts a platform for code management, integration, and development.

My colleague Larry Ramer recently wrote about GitLab and its surge higher. He noted that the company’s shares spiked, as social media attention and investors’ focus has shifted toward GitLab being among the next AI stocks to consider.

The reason that investors are so focused on GitLab is clear. The company has rapidly added AI features to its platform (10 recently), and posted revenue that was $9 million above analyst expectations, at $127 million. GitLab’s CEO Sid Sijbrandij was resolute in his belief that AI will help GitLab to make software for organizations faster than it could prior.

That increase in productivity is central to the promise of AI overall. If GitLab can harness those AI-led productivity gains earlier than other software makers, it will rise dramatically. Chatter suggests that GitLab is in position to do so and that’s why investors should watch GTLB stock now.

Berkshire Grey (BGRY)

Berkshire Grey (NASDAQ:BGRY) is an AI enterprise robotics firm with a stock that trades for less than $1.50. It focuses on providing AI-enabled robotics that fulfill ecommerce orders.

So, Berkshire Grey is operating in a sector that expects to grow at roughly 13% annually through 2030. Companies like Amazon (NASDAQ:AMZN) and those operating other fulfillment centers are looking to reduce labor costs, giving Berkshire Grey a huge field in which to play.

SoftBank, known for big bets on emerging tech, has long been an investor in the firm. SoftBank is planning to take Berkshire Grey private in Q3. That has caused shares to trade flat since the news announced in late March.

For now, Berkshire Grey is touting impressive productivity increases, including a 70% reduction in overhead costs and 90% faster truck unload times for its customers. Shares have fluctuated slightly since the merger announcement, and offer potential for traders who want to try to take advantage of those minor dips.

On the date of publication, Alex Sirois 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.