Investors, beware: There's plenty of buzz around artificial intelligence. Like adding dot-com to their name in the 1990s, more and more companies are labeling themselves AI stocks. Firms like Nvidia (NVDA), Microsoft (MSFT), Alphabet (GOOGL), Apple (AAPL), Adobe (ADBE) and countless others across a range of industries certainly qualify. Even human-resources leader Workday (WDAY) has deeply embedded AI and machine learning into its platform.

Simply jumping on that bandwagon, many companies use older data analytics tools and simply label them as AI for a public-relations boost.

Identifying which companies are really AI stocks and actually getting material revenue growth from artificial intelligence can be tricky. For example, is Palantir stock a buy on its Artificial Intelligence prospects?

What Is Artificial Intelligence? Who Uses AI?

AI uses computer algorithms to replicate the human ability to learn and make predictions. Remember, AI software needs computing power to find patterns and make inferences from large quantities of data.

The two most common types of AI tools are called "machine learning" and "deep learning networks."

Tech titans like Nvidia, Microsoft, Apple and Alphabet certainly qualify as AI stocks.

Amazon has also thrown its virtual hat into the ring. Yet, the e-commerce and cloud giant finds itself playing catch-up in generative AI.

Other such artificial intelligence stocks to watch include Advanced Micro Devices (AMD), Accenture (ACN) and Salesforce (CRM) — just to name a few.

Find The Best AI Stocks To Buy And Watch

As noted, Nvidia is one company that can lay claim to AI-driven growth. Internet and tech companies buy its processors for cloud computing. Nvidia's AI chips also help guide some self-driving cars in early trials.

Startups are racing to build AI chips for data centers, robotics, smartphones, drones and other devices. The rising AI trend has certainly swept up tech giants like Apple, Alphabet, Microsoft and Facebook parent Meta Platforms (META). They are applying AI software to speech recognition, internet search, image classification and an ever-expanding array of applications. Amazon has already established an integral foothold in AI through cloud-computing services and voice-activated home digital assistants. Just ask Alexa.

Then there are tech companies embedding AI tools in their own products to make them better. Video streamer Netflix (NFLX) and payment processor PayPal (PYPL) fit that bill.

Customers of tech companies are expected to increase spending on AI to get productivity gains or a strategic edge on rivals. Applications span banks and finance, health care, energy, retail, agriculture and other sectors.

LeackStat 2023