How to Invest in AI in 2023: Best Stocks & ETFs to Explore, Pros + Cons

Artificial Intelligence (AI) continues to revolutionize industries, and it presents an intriguing investment opportunity that savvy investors cannot ignore! 

It's important to demystify the AI investment landscape and get a clear perspective on this high-tech arena.

We’ll give you expert tips on how to invest in AI in 2023, 10 AI stocks and 4 AI ETFs to explore, tips for choosing AI companies to invest in, and the pros and cons of investing in AI. 

(We’ll also show you why investing in a stable alternative like fine wine could offer high returns, and how to invest in fine wines through Vinovest.)

How to Invest in AI in 2023 (4 Different Methods)

The best ways to invest in artificial intelligence are:

1. Direct Investment via Stocks
2. Indirect Investment via AI-Based ETFs
3. Venture Capital and Private Equity Opportunities in AI
4. Crowdfunding

1. Direct Investment via Stocks

This investment strategy involves buying shares of individual companies involved in the AI industry. This could include artificial intelligence application development companies, robotics manufacturers, or companies that use AI for data analytics.

Before investing in stocks, conduct thorough research, analyze financials, and stay informed about AI market trends. 

2. Indirect Investment via AI-Based ETFs

ETFs are investment funds that trade on stock exchanges. They track the performance of a specific index, sector, commodity, or asset class while offering diversification.

By investing in artificial intelligence-based ETFs, you gain exposure to a diversified basket of tech stocks without the need to select individual companies. In essence, this investment strategy offers the benefit of spreading investment risk across multiple companies in the AI industry.

3. Venture Capital and Private Equity Opportunities in AI

Artificial intelligence-based Venture Capital (VC) firms invest in promising AI startup firms in exchange for an equity stake. By investing in these VC companies, you can potentially realize significant returns if they grow significantly.

Meanwhile, AI-based private equity (PE) companies invest in more mature artificial intelligence companies with an established track record. Investing in PE firms reduces the potential risks associated with early-stage investments (such as lack of liquidity).

4. Crowdfunding

Crowdfunding is a method of raising capital by collecting small contributions from many individuals (typically through online platforms) to fund a project, venture, or initiative.

Through crowdfunding platforms, AI companies or AI projects present their ideas, technologies, or products to potential investors. Meanwhile, investors can choose to back AI projects they find promising, typically in exchange for rewards, equity, or future products/services.

Now, let’s look at some artificial intelligence stocks worth adding to your portfolio.

10 Best AI Stocks to Invest In (2023)

If you’re planning to invest in an individual stock, here are the best AI-based companies to explore in 2023:

1. Microsoft Corp (NASDAQ: MSFT)
2. Meta Platforms Inc (NASDAQ: META)
3. Alphabet Inc Class A (NASDAQ: GOOGL)
4. Amazon.com, Inc. (NASDAQ: AMZN)
5. Tesla Inc (NASDAQ: TSLA)
6. NVIDIA Corp (NASDAQ: NVDA)
7. Apple Inc (NASDAQ: APPL)
8. C3.ai Inc (NYSE: AI)
9. Qualcomm Inc (NASDAQ: QCOM)
10. TechnologyOne Ltd (ASX: TNE)

1. Microsoft Corp (NASDAQ: MSFT)

Microsoft Corp is a multinational technology company known for its software products and services. This includes the popular operating system Windows and productivity tools like Microsoft Office.

It also offers various artificial intelligence services, including Azure AI, Cognitive Services, and a conversational AI tool like Microsoft Bot Framework. Over the years, the firm has been heavily invested in AI development and generative AI research. 

• Market Cap: $2.56 trillion
• Average Volume: 29.21 million
• P/E Ratio (TTM): 37.36
• EPS (TTM): 9.23
• Yield: 0.81%

2. Meta Platforms Inc (NASDAQ: META)

Meta Platforms Inc is a social media and technology conglomerate that offers messaging, advertising, and virtual reality services.

The company uses artificial intelligence and machine learning in areas like facial recognition, content recommendation AI algorithms, and natural language processing for its social media platforms. 

It has also explored applications of generative AI models for tasks such as image and video generation.

• Market Cap: $720.13 billion
• Average Volume: 23.09 million
• P/E Ratio (TTM): 33.45
• EPS (TTM): 8.40
• Yield: N/A

3. Alphabet Inc Class A (NASDAQ: GOOGL)

Alphabet Inc is the parent company of Google and other subsidiaries. It’s involved in various technology-related businesses, including internet search, online advertising, and cloud computing. 

It offers AI-driven services like Google Assistant and Google Cloud AI. The firm has also been involved in generative AI research and has explored applications like image synthesis and natural language processing.

• Market Cap: $1.57 trillion
• Average Volume: 34.54 million
• P/E Ratio (TTM): 27.21
• EPS (TTM): 4.54
• Yield: N/A

4. Amazon.com, Inc. (NASDAQ: AMZN)

Amazon.com, Inc. is an eCommerce giant that offers a wide range of products and services. This includes online retail, cloud computing with Amazon Web Services (AWS), and digital streaming through Prime Video.

It uses AI and blockchain technology in various ways, such as powering its voice assistant Alexa, enhancing customer recommendations, and developing AI-driven products like Amazon Echo and Ring.

In fact, Amazon is committed to AI development and has a dedicated AI research division called Amazon AI.

• Market Cap: $1.29 trillion
• Average Volume: 62.14 million
• P/E Ratio (TTM): 291.84
• EPS (TTM): 0.43
• Yield: N/A

5. Tesla Inc (NASDAQ: TSLA)

Tesla Inc (co-founded by Elon Musk and other entrepreneurs) is an electric vehicle and clean energy company that incorporates artificial intelligence in its autonomous driving technology. The company also develops energy storage solutions.

It has a market share of 54% in the electric vehicle market.

• Market Cap: $825.78 billion
• Average Volume: 133.98 million
• P/E Ratio (TTM): 77.77
• EPS (TTM): 3.35
• Yield: N/A

6. NVIDIA Corp (NASDAQ: NVDA)

NVIDIA Corp is a leading technology company specializing in graphics processing units (GPUs) used in gaming, artificial intelligence, and data centers.

It also offers AI-powered platforms like NVIDIA CUDA and NVIDIA Deep Learning SDK. The company holds a dominant market share position of 83.7% in the GPU market.

• Market Cap: $1.05 trillion
• Average Volume: 48.03 million
• P/E Ratio (TTM): 221.20
• EPS (TTM): 1.93
• Yield: 0.04%

7. Apple Inc (NASDAQ: APPL)

This reputed tech company is known for its consumer electronics, including iPhones, iPads, Mac computers, Apple Watch, and Apple TV. It also offers services such as the App Store, iCloud, Apple Music, and Apple Pay.

It employs blockchain technology and artificial intelligence in various products and services, including Siri (voice assistant) and facial recognition technology (Face ID).

• Market Cap: $2.91 trillion
• Average Volume: 58.30 million
• P/E Ratio (TTM): 30.97
• EPS (TTM): 5.97
• Yield: 0.52%

8. C3.ai Inc (NYSE: AI)

This AI company provides various solutions, including predictive analytics, machine learning, and IoT (Internet of Things) applications. The solutions of this AI startup focus on predictive maintenance, fraud detection, and energy management.

• Market Cap: $5.07 billion
• Average Volume: 28.50 million
• P/E Ratio (TTM): N/A
• EPS (TTM): -3.02
• Yield: N/A

9. Qualcomm Inc (NASDAQ: QCOM)

This global semiconductor and telecommunications equipment company is known for its AI-powered mobile processors and wireless technologies. It develops and licenses advanced technologies used in smartphones, wireless networks, and other connected devices.

• Market Cap: $136.67 billion
• Average Volume: 7.95 million
• P/E Ratio (TTM): 13.08
• EPS (TTM): 9.38
• Yield: 2.59%

10. TechnologyOne Ltd (ASX: TNE)

This Australian tech company specializes in the development of software solutions for sectors such as government, education, health, and utilities.

Its products include integrated business management software, financial management systems, and enterprise resource planning (ERP) solutions.

• Market Cap: $3.55 billion
• Average Volume: 959,385
• P/E Ratio (TTM): 52.97
• EPS (TTM): 0.30
• Yield: 0.97%

You’re probably wondering:

Can you invest in the OpenAI stock (or ChatGPT stock)?No (or at least, “not yet”).

OpenAI is not a publicly traded company, which means there’s no OpenAI stock or ChatGPT stock available on any stock exchange.

Now, if investing in an individual stock sounds complicated for you, then you might want to explore ETFs.

4 AI ETFs to Diversify Your Investment Portfolio

Some of the potentially profitable AI ETFs are:

1. ROBO Global Robotics and Automation Index ETF (NYSE: ROBO)
2. Global X Robotics & Artificial Intelligence ETF (BVMF: BOTZ)
3. iShares Exponential Technologies ETF (NASDAQ: XT)
4. ARK Autonomous Technology & Robotics ETF (BATS: ARKQ)

1. ROBO Global Robotics and Automation Index ETF (NYSE: ROBO)

This AI ETF invests in a diversified portfolio of AI companies, including those engaged in areas such as industrial automation and autonomous vehicles. The fund aims to track the performance of the ROBO Global Robotics and Automation Index.

• YTD Daily Total Return: 27.05%
• Net Assets: $1.38 billion
• Net Expense Ratio: 0.95%
• Average Volume: 133,573
• P/E Ratio (TTM): 30.83
• Yield: 0%

2. Global X Robotics & Artificial Intelligence ETF (BVMF: BOTZ)

This fund gives you exposure to the growing field of robotics and AI, which includes areas such as industrial automation and advanced machine learning algorithms. 

It’s designed to track the investment performance of the Indxx Global Robotics & Artificial Intelligence Thematic Index.

• YTD Daily Total Return: 44.62%
• Net Assets: $2.12 billion
• Net Expense Ratio: 0.69%
• Average Volume: 1.08 million
• P/E Ratio (TTM): 40.84
• Yield: 0.17%

3. iShares Exponential Technologies ETF (NASDAQ: XT)

This AI ETF invests in companies driving technological advancements across various sectors, including robotics, AI, big data, and genomics. The fund tracks the performance of the Morningstar Exponential Technologies Index.

• YTD Daily Total Return: 19.85%
• Net Assets: $3.23 billion
• Net Expense Ratio: 0.46%
• Average Volume: 121,750
• P/E Ratio (TTM): 23.43
• Yield: 0.69%

4. ARK Autonomous Technology & Robotics ETF (BATS: ARKQ)

This ETF invests in autonomous vehicles, robotics, 3D printing, and energy storage. It aims to track the performance of the ARK Autonomous Technology & Robotics Index.

• YTD Daily Total Return: 27.05%
• Net Assets: $934.66 million
• Net Expense Ratio: 0.75%
• Average Volume: 100,150
• P/E Ratio (TTM): 30.04
• Yield: 0%

So, how do you decide on which artificial intelligence stocks to invest in?

We’ll take you through everything you need to consider before making an investment decision.

4 Tips for Choosing AI Companies to Invest In

Here’s what you need to do before investing in an AI stock:

1. Evaluate the AI Technology and Competitive Advantage
2. Research the Track Record, Reputation, and Goals
3. Assess the Leadership and Technical Expertise
4. Analyze the Financial Stability and Growth Potential

1. Evaluate the Company’s AI Technology and Competitive Advantage

Look for an AI company that has developed innovative and scalable AI technology. Also, ensure that these solutions have the potential for wide adoption across various industries.

Evaluate the company’s AI algorithms, AI models, data collection capabilities, and its ability to deliver accurate and actionable insights.

2. Research the Company’s Track Record, Reputation, and Goals

Look into the company’s past performance and achievements in the AI field, such as successful deployments or partnerships. Assess its reputation within the industry and among customers to gauge its credibility and trustworthiness. 

Also, research the company’s long-term goals and vision to ensure they align with your investment objectives.

3. Assess the Company’s Leadership and Technical Expertise

Evaluate the qualifications, industry knowledge, backgrounds in AI research, and expertise of the company’s leadership team.

Why?

Because strong leadership with a deep understanding of AI can drive innovation and guide the company toward success. 

Also, analyze the technical expertise of the company’s workforce. An experienced team can enhance the company’s ability to develop a cutting-edge AI solution. This, in turn, helps the company maintain a competitive edge

4. Analyze the Company’s Financial Stability and Growth Potential

Review the company’s financial statements (including revenue, profitability, and cash flow) to assess its financial health. Aim for companies with consistent revenue growth and positive earnings forecasts.

Additionally, examine the company’s annual reports to gain insights into its strategy, market positioning, future plans, and growth potential. This will make it easier to determine whether the AI stock is worth investing in or not.

Now, what are the advantages of AI investing?

3 Benefits of Investing in AI

Putting your money into AI comes with these benefits:

• Potential for High Returns on Investment: As AI technologies continue to advance, companies at the forefront of AI innovation can experience substantial growth. The scalability and disruptive nature of an AI solution can lead to significant market opportunities and revenue generation.

• Growth Opportunities: The demand for AI technologies and solutions is skyrocketing. That’s because businesses seek to enhance efficiency, improve decision-making, and gain a competitive edge. So, investing in AI exposes you to the growth opportunities in this rapidly expanding industry.

• Portfolio Diversification: If you already have an established portfolio, then investing in AI can be excellent for diversification purposes. In fact, adding various AI-related assets to your portfolio (like tech stocks or ETFs) can reduce your overall investment risk.

Let’s now check out the potential risks of this investment decision.

3 Downsides of Investing in AI

Here’s why you might have to think twice about AI investing:

• Regulatory and Ethical Considerations: As AI technologies evolve, governments implement rules to address concerns such as data privacy and algorithmic bias. Adhering to these regulations can be challenging for companies — potentially resulting in legal risks and financial penalties. As an individual investor, this can hurt your returns.

• Technological Obsolescence: As AI evolves, newer and more innovative solutions may emerge — rendering existing AI technologies less competitive or even obsolete. So, there’s a high chance that some artificial intelligence companies you invest in today could end up losing their competitive edge.

• Market Volatility: Like most investments (such as a stock or mutual fund), an AI investment can be subject to market fluctuations and volatility. Changes in market conditions or shifts in investor perceptions of AI can lead to significant price swings and uncertainty in the market.

So, is there an easy way out? 

Investing in fine wine can be an excellent idea for professional or retail investors!

Fine Wine: A Rewarding Alternative Investment

Here are the various reasons why you might want to consider investing in wine over AI:

• Stability and Predictability:Fine wines tend to appreciate over time, often at a slow and steady rate. This makes them relatively predictable investments — offering an appealing alternative to the highly volatile tech sector. According to the Knight Frank Wealth Report, fine wine delivered 16% returns in 2021 and an average of 10%-14% annual returns for the past 30 years.

• Hedging Against Economic Downturns: The value of wine is often uncorrelated with the broader financial markets — making it a good hedge against economic downturns. In times of market turbulence, fine wine can retain its value or even appreciate, which could help stabilize your investment portfolio. For instance, fine wine produced about 26% returns on investment during the 2008 Great Recession, while the stock market dropped by 52%.

• Inflation Protection: Tangible assets like wine can offer protection against inflation because their value often rises when the cost of living increases. For instance, The price of fine wine witnessed an average growth of 23% in 2021, while the annual inflation rate in the US was around 5%.

• Limited Supply and Growing Demand: Fine wines have a limited supply, especially those from renowned wineries and exceptional vintages. When the bottles are consumed, the remaining ones become rarer — potentially increasing their value. Moreover, the demand for fine wine keeps growing (especially in emerging markets), and this drives their prices up.

• Passion Investment: Investing in wine allows professional and retail investors to engage with your investment on a personal level. It’s not just about monetary returns — you can also derive pleasure from learning about different vineyards, regions, and vintages.

• Tax Advantages: Depending on your location, there may be tax advantages associated with investing in wine. In some regions, wine is classified as a “wasting asset” and is exempt from certain capital gains taxes.

Now, it’s time to explore the easiest way to invest in fine wine.

How to Invest in Wine Through Vinovest

Vinovest is an incredible AI-powered platform that helps any individual investor buy, store, and sell the world’s finest wines easily. 

Here are some benefits of investing through the platform:

• Vinovest stores your wines in climate-controlled bonded warehouses that don’t charge excise duty or VAT.

• It charges a 2.5% annual fee (2.15% for a portfolio over $50,000). This covers wine buying, authentication, storage, a full insurance policy at market value, portfolio management, and selling.

• If you want to uncork your bottle, it can be shipped straight to your doorstep — whether you’re in San Francisco, Paris, or Rome. Also, you get 100% ownership of your wines. (You don’t get such benefits when investing in the AI market or the stock market.)

Build a Diversified Portfolio Comprising AI & Wine

While AI can seem like an exciting investment avenue, it’s important to remember the importance of portfolio diversification. A balanced portfolio often includes a mix of different asset classes, including a mutual fund or tangible assets like fine wine.

If you’re ready to add the finest wine bottles to your portfolio, Vinovest is your best bet. Vinovest experts will also offer you the best investment advice in case you don’t know where to start.

So, sign up with Vinovest today and start investing in extraordinary wines from France, Italy, San Francisco, and all over the world.