The 10 best AI stocks and why I’m not ‘focused’ on NVIDIA Corp (NASDAQ:NVDA)

Are you hunting Best stocks to invest in Artificial Intelligence (AI)? Alike NVIDIA Corporation (NASDAQ: NVDA)? Or Tesla Company (NASDAQ: TSLA)? Or looking for some tech ETFs to gain exposure to AI?

NVIDIA Corp (NASDAQ: NVDA) Stock Price

This article breaks down how I invested in AI and why I’m in no rush to do so.

Why am I NOT ‘focused’ on WHO

• Artificial Intelligence (AI)
• ChatGPT
• Machine learning
• Sophia
• NVIDIA

After years of fiddling in the background, AI tools are finally in the hands of ‘everyone’.

And investors suddenly called it a “paradigm shift.”

Microsoft Powerpoint Slides that usually take 5 hours can be created in 15 minutes.

Printed circuit boards are designed in minutes with AI.

You can use Canva to create a business logo – in seconds!

Free copywriting to prove this email? Finished!

While I believe these tools are exceptional and will change our lives (mostly for the better), I think some investors may have risk surpass yourself…

If we’re not careful, we could enter a new era, like Dotcom boom And 90s/2000s bustwhere stocks like NVIDIA or Tesla have continuously increased in price for many years.

I’ve been around long enough to see this story told before.

Do you remember pets.com? Yes, me too.

But take inventory…

Have non-tech companies started inserting “AI” into their financial statements? Check.

An Uber driver (without asking) told you to invest in NVIDIA? Check.

WHO is among the top 3 questions I get on Rask Roadshow? Check.

Have stock valuations skyrocketed? Check!

ETFs: how to invest in AI (without disappointing yourself)

Besides ‘couples and money’, the most popular topic at Rask Roadshows is ‘what about investments in AI?’

I agree that companies like NVIDIA, who make the best products in the world Graphics Processing Unit (GPU), is special. But that is not the only way to demonstrate the rise of ‘machine-assisted productivity’…

You can use broad market ETFs in your core portfolio – like iShares S&P 500 ETF (ASX: IVV), the company owns 500 US shares incl Apple Inc (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), NVIDIA, etc

You can tweak the Core ETF portfolio a bit in direction Betashares Nasdaq 100 ETF (ASX: NDQ), which includes the top 100 stocks on NASDAQ.

Betashares Nasdaq 100 ETF

Or you could put a magnifying glass on the top of the technology sector, pushing your Satellite portfolio towards something like Global X Fang+ ETF (ASX: FANG). This includes just 10 tech stocks, making it a narrow bet but focused on big tech.

(Note for transparency: Betashares & Global X are long-term advertisers on the Rask podcast. I don’t get paid to mention them.)

You can also look at individual stocks, trying to identify the winner(s). Here’s how I think about these…

If you want to ‘pick a winning AI stock’, here’s my advice: Don’t make it ‘all or nothing’.

Bring your mind back to any bubbles…

For example, imagine you invested with great conviction and bought a cryptocurrency a few years ago. If you invest ‘all’ in one currency, you could end up with nothing.

So, if you are here, reading this article and thinking that AI is a real game-changing topic, try applying the shopping cart method.

I like to buy 1-2 high quality ETFs for themes like these. But I would also consider buying very small shares in some companies.

I would wait a few years, evaluate the industry, then sell the losing companies and merge them into winners.

This way I get some exposure (via the ETF) and can scratch the itch of trying to find winners, find out who is leading the field, and double down on the industry This is mature.

Finally, I want you to remember this quote from the former fund manager and author Peter Lynch:

“During the Gold Rush, most wannabe miners lost money, but the people who sold them picks, shovels, tents, and blue jeans (Levi Strauss) made a decent profit.”

Like I said, I think the easiest way to play the AI ​​theme is to hold a (good) ETF. But another way is to simply invest in a company that benefits from this trend.

Levi Strauss & Co (NYSE: LEVI) sold jeans to miners hoping to get rich from it.

Google sells ads to people trying to access the Internet (real technology).

Microsoft will let you upgrade to the AI ​​version of Microsoft Office (of course, additional fees apply).

Design companies such as Altium LLC (ASX: ALU) and Cadence Inc design system (NASDAQ: CDNS) are two examples.

Social media companies like Meta Inc platform (NASDAQ: META), through their better algorithms.

These aren’t exactly ‘AI stocks’, but they’re benefiting nonetheless.

List of popular AI stocks

Here is a list of popular AI stocks and ETFs:

1. NVIDIA Corporation (NASDAQ: NVDA) – the world leader in GPUs
2. Advanced Micro Devices, Inc. (NASDAQ: AMD) – another world leader in semiconductors
3. Microsoft Corporation (NASDAQ: MSFT) – through a partnership with OpenAI
4. Alphabet Inc Grade C (NASDAQ: GOOG) – for ownership of Google Bard and Search
5. Tesla Company (NASDAQ: TSLA) – self-driving technology
6. Meta Inc platform (NASDAQ: META) – global advertising network, social media and technology metaverse
7. Altium LLC (ASX: ALU) – multinational software platform used to design Printed Circuit Boards (PCBs), used to create ‘smart devices’
8. Betashares Global Robotics and Artificial Intelligence ETF (ASX: RBTZ) ~42 global robotics and technology-focused companies
9. Global X Fang+ ETF (ASX: FANG) – 10 big tech-focused stocks
10. iShares S&P 500 ETF (ASX: IVV) – Top 500 US shares, including major technology and industrial companies

AI: buy, hold or sell?

Aside from diversified and low-cost ETFs, plus some tech stocks that could benefit (but they aren’t AI companies), I don’t invest directly in “AI stocks.”

I think there is a real risk that many investors get caught up in the AI ​​bubble without realizing that they could be taking a big risk with their money.

Sure. There is some exposure through ETFs.

But don’t drink the AI ​​Kool-Aid.

Owen Rask

Founder & Investment Director
Rask group

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