3 AI Stocks to Buy as Biden Doubles Down on Artificial Intelligence
Artificial intelligence (AI) is already taking over as the defining market trend of 2023. Late in 2022, OpenAI took the world by storm when it released ChatGPT, a free chatbot that quickly captured public fascination as it disrupted many industries. Now companies are rushing to procure a piece of the fast-growing market as AI stocks skyrocket and political leaders are taking notice. On Jan. 27, the White House announced a historic agreement between the United States and European Union. Under it, experts from the U.S. and Europe will work together to develop AI tools, including computing and technologies in the privacy protection space. Per the statement from National Security Advisor Jake Sullivan:
“This collaborative effort will drive responsible advancements in AI to address major global challenges with a joint development model and integrated research to deliver benefits to our societies through five key areas of focus: Extreme Weather and Climate Forecasting, Emergency Response Management, Health and Medicine Improvements, Electric Grid Optimization, and Agriculture Optimization.”
This news has been excellent for AI stocks, as positive speculation mounts. An AI-centric collaboration between two economic superpowers could boost AI companies on truly global levels. That would be particularly true for those already producing technology with applications for the areas of focus outlined by Sullivan. The area of electric grid optimization is particularly important, as the growth of the electric vehicle (EV) sector depends on it. But companies across many sectors will have the opportunity to benefit as the Biden administration prioritizes AI and the innovators behind it. Let’s take a look at the tech players most likely to come out ahead as the AI boom prepares for a new stage.
AI Stocks to Buy: C3.ai (AI)
This leader among AI stocks has already benefited from news of the U.S.-EU agreement. C3.ai (NYSE:AI) surged 15% following the White House announcement last week. A few days later, the company experienced another stock bump when C3 reported it would be launching an innovative new produce suite in March 2023. As InvestorPlace assistant news writer Eddie Pan notes, this represents a major step forward that will bring it closer to offering the same services as ChatGPT. The company has given investors plenty of reasons to bet on it, surging 86% in just the past month.
With the coming collaboration between the U.S. and EU, though, it stands to benefit even more. C3.ai is one of the tech sector’s leading AI innovators, producing an enterprise-focused software platform. Using it, customers are able to build in-depth tools for processing and visualizing data. Before the AI boom, the company worked primarily with sectors such as oil & gas. However, it has since branched out, winning a 5-year contract with the Department of Defense worth $500 million. Companies with a pre-established relationship with government agencies will have a clear advantage as the government shifts focus to helping AI companies grow.
Splunk (SPLK)
One of C3’s AI competitors has been growing quickly and expanding its impressive client list. Splunk (NASDAQ:SPLK) recently announced layoff plans but it is still rising. That could be because positive sentiment toward AI stocks is high. But Splunk has a demonstrated ability to grow, even in less prosperous times. In December 2022, it extended its partnership with Amazon (NASDAQ:AMZN) Web Services (AWS) for an additional five years. But as InvestorPlace contributor Muslim Farooque reports, its client list includes 90% of the Fortune 100 list. Under the new AI boom, that list could easily expand even further. As Farooque notes:
“Splunk is a juggernaut in Big Data, providing AI-driven insights to thousands of companies worldwide. It’s grown its customer base at a rapid pace and has quickly become one of the industry-leading data providers.”
These wide-ranging implications put Splunk in an excellent place to benefit from the new AI collaboration. Its AI-powered insights have already allowed it to service a diverse portfolio of clients, which is likely to grow as more companies turn to AI. Demand for AI insights can only grow as governments look toward the industry to help address more problems.
AI Stocks to Buy: Palantir Technologies (PLTR)
This former cybersecurity winner is still recovering from a very difficult 2022. But that doesn’t mean that investors should write it off. Quite the opposite, in fact. As InvestorPlace contributor David Moadel argues, there is a strong bullish case to buy Palantir (NYSE:PLTR) as a way to play the AI boom. As he sees it, the company’s use of data-science integrations makes it a clear choice among AI stocks to buy. InvestorPlace senior investment analyst Luke Lango has also hailed PLTR in a similar light, describing it as “using AI to bring Batman-like technology to the real world.”
Despite its difficult year, Palantir has a long history of working with the U.S. Armed Forces. It has provided software to the U.S. Air, Space and Cyber forces and partnered with the U.S. Army’s Program Executive Office for Enterprise Information Systems (PEO EIS) multiple years in a row as part of the Army Vantage program. The U.S. government has issued guidance on introducing autonomy in weapons and defense technology, indicating that it is preparing to start relying further on AI technology. When it does, Palantir will be among the winners as government agencies turn again to their former partner.
On the date of publication, Samuel O’Brient did not hold (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.
Samuel O’Brient has been covering financial markets and analyzing economic policy for three-plus years. His areas of expertise involve electric vehicle (EV) stocks, green energy and NFTs. O’Brient loves helping everyone understand the complexities of economics. He is ranked in the top 15% of stock pickers on TipRanks.
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