Investors should exercise caution, conduct thorough research, and consider long-term trends when investing in this sector. The company has not shared much detail about its intentions, but said on its website that its team would be joining a Twitter Spaces call on July 14 to take questions. (Musk is the owner of Twitter.) The AI company will work closely with Twitter, now called X Corp., and Tesla, as well as other companies “to make progress towards our mission,” xAI said on its website.
Its applications span numerous industries, and proponents say it will significantly transform how businesses operate and deliver services. The price of Tesla stock increased considerably last year, growing by +85% from a low of $113 in January 2023 to $209 in January 2024. While the broader market rallied in the past year in general, Tesla way outperformed the S&P 500 Index in the time period (S&P 500 gained +21.5% YTD). Buying Tesla stock might be the best option for gaining exposure to xAI at the moment. According to Musk, xAI will work with Tesla in multiple ways (for example, Tesla’s self-driving capabilities will be improved due to xAI). That means that the price of Tesla shares will likely, at least in part, mirror the success and progress made by xAI.
About xAI Stock
X.AI Corp. (“xAI”) is not a publicly traded company, which means that you cannot invest in the company like you would in Tesla or Microsoft, for example. However, with xAI being founded by tech billionaire Elon Musk, there are other potential opportunities that you can explore to gain exposure to xAI. Shareholders can sell their xAI stock through EquityZen’s private company marketplace.
Arista Networks makes the ultrafast network switches that accelerate communications between racks of AI servers. These switches must to be upgraded as cloud-based applications such as ChatGPT become more popular. Investors should focus on the companies that sell foundational equipment required to get useable products to the market. When ChatGPT launched in December 2022 its popularity shocked executives at big technology firms.
- Regarding the retail industry, AI has long analyzed consumer behavior to present personalized shopping suggestions.
- The industry’s reliance on continuous technological advances and a changing regulatory landscape relating to data use and privacy add further complexity.
- Then, you should deposit some funds into your account to prepare to buy xAI stock alternatives.
- Arista Networks makes the ultrafast network switches that accelerate communications between racks of AI servers.
The company has a join pro or pro plus and get lifetime access to our premium materials B financial health rating and trades at a P/E of 41.3. The stock is still up over the last year but trades well below its 52-week high. The stock price has averaged returns of 27.5% over the last 10 years. The stock price is up over the last year, but the company hasn’t produced positive earnings yet. Despite the recent earnings dip, AMD stock has performed strongly over the last year and the last decade. It has a “B” financial health rating and a buyback yield of 0.4%.
Tips for Investing in Artificial Intelligence (AI) Stocks
Over the last decade, the stock has averaged returns of 27.1% per year. Analysts project 11.8% EPS growth next year, slightly below the longer-term forecast for future years. The stock has been a great long-term performer, averaging 25.0% returns per year over the last decade. Meta operates Facebook, Instagram and WhatsApp, as well as many other companies.
Guide to Selecting the Best Artificial Intelligence (AI) Stocks
While none of these companies are working on the exact same problems as xAI, they either benefit from or are themselves investing heavily in artificial intelligence. Here’s a list of other AI-related investment opportunities you may be interested in. This is a fairly small position, but the Venture Fund also has stakes in a number of other private companies that may be of interest. SpaceX, Epic Games, Anthropic, Figure AI, and OpenAI are all part of the fund’s top 10 holdings.
Investing in AI stocks could bring significant growth, given the transformative influence of artificial intelligence across many industries. However, it’s important to recognize the unique characteristics of this sector. While signs suggest some elements of the AI industry could be overvalued, there are also strong fundamentals supporting the growth and sustainability of AI as a transformative technology.
What Are AI Stocks?
Indications of a bubble include high valuations, a plethora of speculation, rapid investment growth, and extreme positive market sentiment (hype) that leads to irrational investment behavior. Investing in AI stocks requires understanding the technical aspects of AI technologies and assessing the traditional financial metrics. It is important to keep up with the latest developments in the AI field, as the technology and market dynamics can change rapidly. Judging by Musk’s past business history, xAI likely won’t go public, at least not anytime soon.
In July 2023, Musk held a Twitter Space in which he discussed xAI, its goals, and its team. Analysts at New Street Research estimated in February that the cost of delivering ChatGPT to Microsoft Bing users required an initial $4 billion infrastructure investment. That price tag will grow as the product is rolled out to more users, according to a report at CNBC. Elon Musk held a Twitter Spaces event in early July to reveal X.ai, his newest AI business. X.ai researchers will focus on science, while also building applications for enterprises and consumers.
Analysts project 14.4% growth next year, which is below the 5-year average expected. Arista Networks provides products and software for data center and cloud computing. It creates networks that can grow and adapt with the evolution of technologies used on those networks. The company has an “A” financial health rating from Morningstar, and it is expected to grow EPS by 21.9% next year. Nvidia is known for its graphics cards, but the company also produces microchips for autonomous driving cars and AI applications. The company’s CEO, Ginseng Huang, is positioning Nvidia to be at the forefront of bringing AI to every industry.
Once an investor has sufficient knowledge of the industry and companies, they should determine which stocks they believe have the greatest long-term potential. Finally, once a decision has been made, the investor can purchase AI stocks from their stock broker. In addition to the above requirements, all stocks have at least a $1 billion market capitalization, a price above $5 and daily average volume of at least 500,000 shares. The stock began trading in 2020, so it doesn’t have a long track record. But it makes the list because it is up handsomely over the last year and analysts project 50.9% yearly EPS growth over the next five years.
Prior to buying any xAI stock alternatives, you have to gain access to the stock market. In May 2024, xAI raised $6 billion in series B funding, reaching a valuation of $24 billion according to Reuters. He also filed a lawsuit against Sam Altman (which has since been withdrawn), his co-founder and the current CEO of OpenAI, claiming Altman breached their contract by abandoning their not-for-profit mission.
Collectively our team contributed some of the most widely used methods in the field, in particular the Adam optimizer, Batch Normalization, Layer Normalization, and the discovery of adversarial examples. We further introduced innovative techniques and analyses such as Transformer-XL, Autoformalization, the Memorizing Transformer, Batch Size Scaling, μTransfer, and SimCLR. We have worked on and led the development of some of the largest breakthroughs in the field including AlphaStar, AlphaCode, Inception, Minerva, GPT-3.5, and GPT-4. Invest in or calculate the value of your shares in xAI or other pre-IPO companies through EquityZen’s platform. In addition to trading and investing he’s widely published and coaches individual clients on the finer points of gaining an edge in the market. As with any sector, there’s no definitive way to choose which AI stocks you should invest in.
The Financial Times reported in April that Musk’s departure was also due to clashes with other board members and staff over OpenAI’s approach to AI safety. Elon Musk wants to “understand the true nature of the universe.” At least that’s what his new AI company, xAI, said on its website as he announced its formation on Wednesday. You can, however, gain indirect exposure to xAI by investing in Tesla or buying AI-focused ETFs. Our community is about connecting people through open and thoughtful conversations. We want our readers to share their views and exchange ideas and facts in a safe space.
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